Is 2027 the new 24-hour trading target?

Slew of technical issues and dearth of SEC staff compound exchanges’ reluctance for round-the-clock equity trading

02 Sep 2025

Division among US equity exchanges will likely cause delays to the much-heralded 24-hour trading paradigm, as government job cuts and a phalanx of operational issues add to the list of factors making proposed timelines look ambitious at best.

Four exchanges – 24X, the New York Stock Exchange, Nasdaq and Cboe – have expressed their intent to debut round-the-clock trading before the end of 2026. Yet even the most bullish participants are cautious in their optimism about this timescale. Alongside operational issues, the potential technical hurdles include the data collection required for best bid/offers. 

But these may be mere complications relative to the knotty question of the exchanges’ own appetite.

Central to the issue are the exchange-owned Securities Information Processors, or Sips, that collect and consolidate the data required to calculate national best bid/offer (NBBO) quotes from US exchange trades. For round-the-clock exchange-trading to go ahead, these three operating committees need to submit plans to the Securities and Exchange Commission that would expand their operating hours to accommodate the objective.

Crucially, the Sips are struggling to get the exchanges to approve their applications to make the necessary changes for data collection. On May 6, the Sips said they would “soon” release their plan, but almost four months later, there is no more concrete announcement. 

Adding to the hurdles is the fact that significant staff turnover in the halls of the SEC means the expertise required to make these approvals is currently thin on the ground.

“Many of the SEC staff were turned over, so there’s new staff,” says Dmitri Galinov, chief executive officer of 24X’s National Exchange, a ‘challenger’ venue to the established exchanges that has stated its intent to launch round-the-clock equity trading by the end of this month. 

“These new people need to understand all the rules and regulations and how this application will change things. So that’s probably what [the exchanges] are facing right now.”

Others share the concern over timelines.

Brian Hyndman, chief executive of Blue Ocean Technologies, which runs an alternative trading system (ATS) that already operates overnight – from 8pm to 4am – says “there’s a lot of stuff that needs to be done” to enable overnight trading of equities on exchanges. “It’s not going to happen in 2025, [it’s] probably not going to happen in 2026. I’d be surprised if it happened in 2027.”

The Sips’ reticence to advance their plan is rumored to be rooted in some exchanges’ lack of appetite to open 24 hours; any changes to Sips’ operating times requires unanimous consent among the exchanges – and they are said to be divided on the proposal’s merits.

“That makes complete sense,” says Hyndman. “I don’t think the size of the overnight is big enough for them at this time.”

James Brady, a partner at law firm Katten, echoes Hyndman’s assessment and also “worries it gets pushed”. He says that within the Sips are “varying opinions that cut in multiple directions”. Some exchanges are “not overly enthusiastic” about being open 24 hours a day, he says, adding that it’s expensive for the Sips to expand the hours of the consolidated tape to overnight. 

“It’s been months since they said they’re going to announce the framework for the amended plan and that still has yet to be filed,” adds Brady. The way in which Sips are structured, with material decisions requiring unanimous consent, means it wouldn’t surprise him either “if it slipped into 2027”.

Two exchanges currently have existing SEC permission, granted under the Biden administration, to trade US equities on a 23-hours-by-five-days basis – which is effectively what 24-hour trading signifies for US equity trading. 24X National Exchange was first to be approved, followed by NYSE – though both are still waiting for the Sips to extend their hours.

Nasdaq has said it will enable 24-hour trading, pending regulatory approval, with an anticipated timeline in the second half of 2026. Cboe Global Markets made a similar announcement.

“I suspect that some of the exchanges did not really want this,” says Katten’s Brady. “But 24X pressed the issue and ultimately got the SEC to sign off on it. 24X has done a nice job pushing a lot of the other exchanges to eventually do this.”

He adds: “That said, the move to 24-hour trading is taking longer to implement than it probably should because the Sips are funded by the exchanges and the exchanges’ lives are arguably easier, maybe more cost-effective, if they’re not open overnight.”

Open questions, open goals

A number of sources attest to a lack of confidence that 24-hour equity exchange-trading will be achievable by next year.

Jon Fowler, chief technology officer at RQD Clearing, is part of the working group at National Securities Clearing Corporation – a subsidiary of the Depository Trust & Clearing Corporation – which includes extensive modernizations for the universal trade-capture product that exchanges and NSCC participants use to submit trades into the clearing house.

Fowler thinks it’s very possible that overnight trading on exchanges may have to wait until 2027 due to a number of “blockers” that have to be cleared before regulators give their blessing. “There are a lot of big, open items yet to be fully decided, much less implemented, tested and taken up by the industry,” he says.

He says these open questions, such as when corporate actions go into effect – an issue largely being spearheaded by the Securities Industry and Financial Markets Association (Sifma) – “haven’t been fully answered yet”.

For these reasons, ATSs – outfits like Blue Ocean, Bruce Markets and Moon ATS – are more likely to be the primary operators of overnight trading for the foreseeable future, he predicts, “given they have more flexibility on how they operate as broker-dealers”.

A key difference between ATSs and exchanges is that the former can shut down trading any time they want to deal with updates, such as corporate actions, so they don’t need to solve some of these issues in order to provide the service.

They are going to want to make sure they do adequate testing and to make sure these things all are working together well to not have operational challenges when they go live

Zachary Zweihorn, Davis Polk

As well as enabling real-time trade reporting, handling corporate actions tops Hyndman’s list of outstanding issues for the exchanges. Currently, corporate action changes take place between 8pm and 4am, and Hyndman is skeptical the work can be squeezed into just an hour’s system downtime, as is proposed.

“There’s a lot of financial adjustment that would need to be made and I think the industry, as they peel the onion back, have gone, ‘It’s quite complicated.’”

Steve Byron, head of technology, operations and business continuity planning at Sifma, says it “continues to work across the industry and its members on the operational impacts associated with a potential extension of US trading hours,” including work on corporate actions.

The NSCC plans to operate continuously from 8pm Sunday until the same time on Friday by the second quarter of 2026. Its rule book states that its hours of operation will be included in notices to members. When, a few months ago, it announced it will accept trades starting at 1:30am, a simple notice to members achieved this without having to go through the SEC rule-filing process. That may not be enough this time.

“It’s possible that going to full overnight would be sufficiently materially different to require SEC approval,” says Brady, who is nonetheless confident DTCC will deliver by its stated Q2 2026 deadline.

Galinov agrees DTCC is living up to its part of the bargain and will deliver on schedule. “They certainly are ahead of everybody,” he says. 

A spokesperson for DTCC says it continues to progress with its efforts to extend NSCC’s clearing hours to support extended trading: “We remain on track to deliver that in Q2 2026, subject to regulatory review and approval of any necessary rule changes.”

Both exchanges and Sips are also subject to Regulation Systems Compliance and Integrity, which requires that certain critical market infrastructure be robust and well tested.

“I think they are going to want to make sure they do adequate testing and to make sure these things all are working together well to not have operational challenges when they go live,” says Zachary Zweihorn, partner at law firm Davis Polk.

Incremental Sips

For their part, the Sips “are continuing to work on the plan for submission to the SEC”, according to a spokesperson for the operating committees, who adds: “I don’t have a timetable to share on that.”

The three Sips are the Consolidated Tape Association, which deals with NYSE data, the Unlisted Trading Privileges plan, which governs Nasdaq and OTC data, and the Options Price Reporting Authority, which deals with listed options. Funded by the revenue exchanges generate, these operating committees comprise the exchanges themselves and the Financial Industry Regulatory Authority (Finra).

There have been previous allegations that the Sip structure raises competitive issues and conflicts of interest, although these have primarily been concerns about conflicts of interest between exchanges and brokers. The claims were that since the Sips are essentially controlled by exchanges they didn’t have an incentive to improve as exchanges separately sell other, more expensive, market data.

The SEC in 2020 agreed and issued a governance order requiring that the market data plans expand their voting membership to include non-self-regulatory organization (SRO) voting members. But several exchanges sued and the DC Circuit agreed the SEC didn’t have statutory authority to require non-SROs with voting power over the Sips, striking down that aspect of the governance order.

As Risk.net sister title Waters Technology reported, the Sips have taken some time even to get to the current status. In March, four proposals for extended trading hours from 24X National Exchange, Nasdaq, Cboe and NYSE failed to reach unanimous consensus, with NYSE and Nasdaq voting against each other.

Sips’ operating committee members are bound by a confidentiality policy, but a source close to the issue says the bodies are in the process of implementing other non-24-hour trading priorities. These include reporting of fractional shares, changes to the definition of round lots, transparency of odd-lot quotes and the addition of a new half-cent tick size.

“Due to the associated increase in message traffic that will be caused by these changes, the Sips also need to pursue a parallel expansion in capacity,” adds the source. “Many of these projects – round lots, odd lots and tick size – are mandated by SEC regulation to occur on a set timeline, which imposes constraints on the resources that may be available for other consolidated tape initiatives.”

A second source close to the operating committees agrees with this analysis and says there are a lot of “non-discretionary changes on the Sips’ plate and it could be just a [question of] priority for an initiative that may not bring lots of revenue”.

This second source notes that 24-hour trading is “a big deal,” requiring capacity upgrades, disaster-recovery testing and onboarding of new exchanges, and adds that a Finra working group, the Financial Information Forum, “has regular meetings talking about the issues, many of which are not in Sip or even exchange control”.

Finra declined to comment.

Staff stuff

Following buyouts offered by the Trump administration, many SEC staffers left the building for good. Recent departures of SEC staff who review company filings, for example, could “lead to a loss of institutional knowledge”, a report from the US Office of the Inspector General warned on August 26.

In May, SEC chair Paul Atkins said the agency had lost 15% of its staff since the beginning of the current fiscal year. “These departures leave vacancies that in many cases need to be filled,” he said. “At our height a year ago, we had approximately 5,000 employees plus 2,000 contractors. Today we are at approximately 4,200 employees and 1,700 contractors.”

These job reductions could further contribute to delayed timelines as the exchanges are required to have regulatory reviews in order to press on with 24-hour US equities trading, say industry and legal sources.

Former SEC staffer Marlon Paz, a partner in the financial innovation and regulation practice at US law firm Steptoe, explains that the exchange filings will be dealt with under Rule 19b-4 of the Securities Exchange Act of 1934.

300

Number of days Sip plan amendments can be extended

Staff in the division of trading and markets will first review the filings and whether through delegated authority or subject to a vote by SEC commissioners, the requests will be approved or denied. Paz thinks that only if staff is inclined to deny, for any reason, would the review go to a commission vote. Staff would look to determine whether the rule change continues to promote orderly, efficient and transparent markets that afford investor protection, he adds.

Davis Polk’s Zweihorn notes that “certain people who used to be at the SEC who would have been involved in this” are no longer there.

“There were some pretty senior as well as down-the-line staff that look like they took the buyout offers and left,” adds Zweihorn.

Amending exchange rules “takes time because they need to file those amendments with the SEC and get the SEC to approve,” says Zweihorn. That process “can be dragged out as far as 240 days if the SEC uses every extension that it has available to it,” he adds.

Sip plan amendments, meanwhile, are National Market System plan amendments and can be extended up to 300 days.

In Hyndman’s view, the Republican administration is more focused on stable coins and crypto, rather than 24-hour equities trading, which “was never on their agenda”, he adds. “It was really being pushed by retail and then pushed by the exchanges.”

Could regulatory expectations of an on-time launch be reined in, given competing priorities for staff time at the SEC?

Hyndman thinks both the industry and regulators are “less focused on exchanges overnight” right now. “It seems like all that sizzle has come down a little bit because there’s a lot of thorny issues that need to be ironed out”.

Zweihorn nonetheless strikes a more hopeful note on potential roadblocks at the regulatory level. Yes, there are various ways in which the SEC can extend its default timeline, for good cause or for additional complexity, for example. And it’s possible that without the job cuts, the SEC might have otherwise been able to review the rule changes faster. It may now need the maximum timeline allowed.

“But there’s a statutory timeline the SEC has to work to on rule filings regardless of staffing levels,” says Zweihorn. And even if some of their market structure experts have left the organization, he says it will take the necessary action. “It may be tougher, but they’ll get it done.”

The SEC did not respond to a request for comment.

NYSE declined to comment and Cboe did not respond to requests for comment.

Nasdaq also wouldn’t comment for this story, but a source familiar with the exchange was not aware of any delays or indications that would suggest its timeline is impacted and believes it remains on track with its plans for extended trading hours.

Editing by Louise Marshall