Major financial regulators are set to hold an urgent virtual meeting today, April 1, to evaluate if existing regulations on transaction reporting, order record-keeping, and clock synchronisation need revisions in light of climate change's impacts on Earth's rotation and timekeeping systems.
Trading venues and participants must align their business clocks with Coordinated Universal Time (UTC) to the millisecond or finer for recording reportable events. This synchronisation is crucial for accuracy in timestamping events sent to the central repository.
Recent scientific findings highlight global warming's significant effect on Earth's rotation speed, necessitating periodic adjustments to UTC. These adjustments ensure atomic clocks, which are far more precise, remain in sync with the slight variations in Earth's rotation and prevent the discrepancy in day length from increasing.
A recent study in the journal Nature attributes the accelerating melting of polar ice due to human activities as a new contributing factor to these distortions, effectively slowing Earth's spin and impacting our timekeeping adjustments.
Historically, to match the day's length with atomic time, leap seconds were added when Earth's rotation lagged behind caesium clocks. For instance, in 1972, the "rotation day" extended 0.025 seconds longer than the "atomic day", leading to a cumulative 0.7 seconds delay over a year. This delay was corrected by incorporating an extra second at the year's end. Such adjustments were standard until recent shifts in Earth's interior began to speed up its rotation, suggesting the possible need to subtract a leap second in 2026 for the first time.
This potential change in UTC adjustment raises concerns among regulators about the implications for market abuse judgments, which legal experts could challenge.
Avril Feuilherade, spokesperson for the Council of Regulators, emphasised, "Timing is everything."
