The SEC is exploring 24/7 trading to enhance market responsiveness, coinciding with the approval of tokenized securities.
The SEC is evaluating the possibility of 24/7 trading following the approval of tokenized securities.
The U.S. Securities and Exchange Commission (SEC) is contemplating the introduction of around-the-clock trading, a concept that aligns with the existing practices in the cryptocurrency sector. This discussion took place during a recent roundtable meeting, which followed the SEC's approval of trading in tokenized securities.
SEC Chairman Paul Atkins emphasized the need for a continuous trading model, stating, "We're moving of course to a new day — and night," highlighting that trading shouldn't be confined to traditional hours. This initiative aims to empower investors to react promptly to market changes.
While discussing extended trading hours for traditional firms, Atkins also touched on the SEC's recent tokenization decision, which introduces a new exemption allowing companies to trade tokenized securities for five years without facing extensive regulatory hurdles.
Atkins expressed confidence that tokenization could enhance the securities landscape by enabling real-time inventory management, which would boost efficiency and mitigate risks like settlement failures and abusive short selling. He encouraged staff to pursue a regulatory environment conducive to growth while ensuring market protection.
Transitioning U.S. securities markets to 24/7 operations will require substantial adjustments, as noted by Atkins and fellow SEC officials. Commissioner Hester Peirce remarked that unlike traditional markets, "Crypto markets certainly don't sleep."
Peirce also raised concerns from firms regarding the ramifications of extended hours, such as wider spreads, heightened price volatility, and difficulties in managing technology and oversight during off-hours. She cautioned that "social media rumors could tank your stock while your corporate office slumbers."
Despite these potential challenges, the SEC is determined to advance this initiative, with Atkins indicating that "several needed preparations are already underway or in place."
