The pieces are falling into place for the US to move to 24-hour trading as major industry bodies prepare for the move. However, Citadel Securities has called on the SEC to introduce more consistent rules around the new operating structure.
Earlier this month, the transaction securities information processors (SIPs) Operating Committees announced that it plans to extend its operating hours to a 24-hour model. A ‘technical pause’ of less than an hour has been built into each 24-hour cycle, allowing all involved parties to refresh their systems at 8pm ET. As such, a new trading day will begin at 9pm ET – 4 pm in the UK.
Once submitted to the SEC, plans for the amendment will be accepted or rejected within 300 days.
In a recent letter to the SEC, Citadel Securities stressed that a number of regulatory and infrastructural issues need to be addressed before 24-hour trading can be effective. For the former, “handling requirements, execution quality disclosures and volatility controls must be clear, fit for purpose and consistent across venues,” it says.
On the infrastructure side, key players such as the Depository Trust & Clearing Corporation’s (DTCC) National Securities Clearing Corporation (NSCC) and services including SIPs and transaction reporting facilities must be reliably available during trading hours.
SIPs have highlighted three prerequisites for their extended hours to be adopted. The first of these, for DTCC to offer clearing over the 24-hour cycle, are already in motion. Earlier this year, the group announced that 24/5 clearing for the NSCC would be effective from Q2 2026.
READ MORE: DTCC prepares for 24-hour trading onslaught
Additionally, SIPs says, processors must be technically able to disseminate all quotes and trades during the operating hours. The group intends to ask the SEC whether the extension of trade reporting facility operating hours to allow this will be a prerequisite for its 24-hour model.
Finally, the group states that the listing markets must be able to support the 24-hour model as processors will need to change symbol directory messages.
Jeff Kimsey, chairman of the SIP Operating Committees, commented: “We know the industry is eager to move toward 24-hour trading, and the SIPs are determined to make the changes necessary to make available the market data that will facilitate that.”
Dates for the 24-hour implementation will be determined once regulatory and technical requirements have been met.
Citadel Securities also emphasised the need for trade date and settlement date assignments during overnight sessions to be consistent across the market.
The SIPs Operating Committees, Cboe and NYSE declined to comment on Citadel Securities’ statements.
The drive for institutional 24-hour trading is in part the result of growing competition from retail brokers like Robinhood and Interactive Brokers, which allow clients to access US stocks on a 24/5 basis, and a comfort with 24/7 cryptocurrency trading. International investors are also keen to access the US equity market outside of standard trading hours.
READ MORE: Stocks around the clock
In recent months, Cboe, NYSE and Nasdaq have all announced plans to extend their trading hours. Challenger exchanges like 24X National Exchange have built themselves with 24-hour trading in mind.
