SEC Prepares US Stock Markets for 23-Hour Trading

The Securities and Exchange Commission is holding a roundtable on preparations for 24-hour stock trading, covering overnight liquidity, settlement and closing-price processes, according to a report from Coinpaper.

NYSE has already proposed an expanded model running roughly 23 hours a day, five days a week. The gap between crypto's continuous markets and equities' trading-day structure runs deeper than exchange hours, however.

Bitcoin moves on a Sunday morning without waiting for a bell. Apple cannot trade on Nasdaq at the same time. The reason is not that stock exchanges cannot stay open. The harder part is the infrastructure behind each trade: brokers, market makers, clearinghouses, custodians, banks and corporate-action systems.

Crypto was built around continuously operating networks. U.S. equities were built around defined trading days. Transactions on Bitcoin settle whenever the network is operating, and crypto exchanges match buyers and sellers around the clock. Stocks work differently. The main U.S. session still runs from 9:30 a.m. to 4 p.m. ET, with pre-market and after-hours trading around it.

Even if trading becomes nearly continuous, markets still need an official reference price. The 4 p.m. close is used to calculate fund values, index levels, portfolio performance and many derivatives. That is why the SEC is also examining closing-price processes, not just longer exchange hours.

Corporate actions create another issue. Dividends, stock splits and mergers need clear dates and ownership records. A nonstop exchange does not eliminate those operational requirements.

Overnight markets generally have fewer buyers, sellers and market makers, which can mean wider spreads and bigger price moves on smaller trades. Nasdaq has noted that overnight trading can come with higher costs and thinner liquidity.

U.S. stocks settle on a T+1 basis, meaning cash and securities normally change hands the next business day. Continuous trading therefore requires brokers, custodians and clearing infrastructure to remain synchronized for much longer periods.

Tokenization could eventually simplify some of this. The structural differences between tokenized stocks and direct equity mirror the gap between crypto and traditional trading hours, as explored in Tokenized AMAT: Structural Risks vs Direct AMAT Equity. NYSE is also exploring a tokenized securities venue built around continuous trading, the report said.

The SEC roundtable has no scheduled date yet. No firm proposal has been submitted for a vote. The roundtable will inform the commission's approach to extending trading hours, the report said.