The U.S. Securities and Exchange Commission is actively considering plans to introduce around-the-clock trading, coinciding with its approval of tokenized securities.
By Jesse Hamilton|Edited by Nikhilesh De57 min ago2 min readThe U.S. Securities and Exchange Commission (SEC) is exploring the implementation of 24/7 trading, a concept already familiar to the cryptocurrency world. This initiative was discussed during a roundtable event held on a Thursday, which came right after the SEC approved tokenized securities trading.
SEC Chairman Paul Atkins highlighted the move towards a continuous trading environment, stating, "We're moving of course to a new day — and night," emphasizing that trading should not be limited to traditional market hours. This expansion aims to enable investors to respond more swiftly to market events.
During the discussions on extending trading hours for conventional firms, Atkins also addressed the agency's recent decision concerning tokenization. The SEC has introduced a new exemption for firms seeking to engage in tokenized securities trading, allowing them a five-year window to operate without the burden of extensive securities regulations.
Atkins expressed optimism about the potential of tokenization to enhance the securities industry by facilitating real-time inventory management, which could improve efficiency, minimize settlement failures, and reduce the risks associated with abusive naked short selling. He urged the staff to explore steps to create a growth-friendly regulatory environment while ensuring market protection.
Transitioning the U.S. securities markets to operate beyond typical weekday hours will require significant changes, as acknowledged by Atkins and other SEC officials. Commissioner Hester Peirce pointed out that, unlike traditional markets, "Crypto markets certainly don't sleep."
Peirce also mentioned that firms might have concerns regarding the implications of extended trading hours, such as wider spreads, increased price volatility, and potential challenges in managing technology issues and transaction oversight. She noted, "These concerns are the real consequences of extending trading into hours when human involvement is limited," warning of scenarios like "social media rumors tanking your stock while your corporate office slumbers."
Despite these challenges, the SEC is committed to moving forward with the expansion, with Atkins stating that "several needed preparations are already underway or in place."