SEC Preparing US Securities Markets for 24-Hour Trading: What Are the Overnight Risks?

The U.S. Securities and Exchange Commission (SEC) is preparing to bring traditional markets closer to the seamless trading cycle seen in cryptocurrencies.

The SEC discussed plans to extend the trading hours of traditional securities markets during a roundtable meeting held at its Washington headquarters. The agency’s efforts do not mean that U.S. exchanges are starting 24-hour trading just yet; however, it is noted that some of the necessary infrastructure and oversight preparations are underway.

SEC Chairman Paul Atkins stated that actionable developments are not limited to market hours. He noted that extending trading hours could allow investors to react more quickly to corporate news and economic developments.

The seamless trading model carries new risks

In addition to the advantages, the possibility of wider bid-ask spreads and higher price volatility was also raised during the meeting. SEC Commissioner Hester Peirce stated that companies might have less time to intervene in technology issues and oversee transactions while extending trading hours.

Peirce also warned that rumors spreading on social media while corporate offices are closed could sharply affect stock prices. Maintaining market surveillance during overnight hours, when human intervention is limited, emerged as one of the most important operational topics of the plan.

On the same day, Atkins also brought up a five-year exemption regulation for companies wanting to offer tokenized securities trading. However, this decision is considered a separate development from the preparations to extend trading hours for traditional markets.