SEC Roundtable Highlights Key Considerations for 24-Hour Trading

On September 17, 2026, the U.S. Securities and Exchange Commission (SEC) held its “Roundtable on Preparations for 24-Hour Trading” to discuss the market’s transition toward expanded trading hours, including the planned December 6, 2026, expansion of the securities information processors (SIPs), the industry utilities that consolidate quotation and trade data from different markets and report the national best bid and offer (NBBO) and last-sale information. The SEC’s Division of Trading and Markets described the coming changes as substantial and potentially broad in impact while noting that further expansion to 24x7 trading remains a possibility.

Discussion at the roundtable indicated market participants’ belief that much of the infrastructure necessary to support expanded trading hours is already in place or under development. At the same time, SEC officials and panelists identified a number of regulatory and operational issues that market participants will need to consider, including best execution, short sale compliance and securities lending, supervision and surveillance, liquidity, market resiliency, price protections, corporate actions, and issuer disclosures. Commissioner Mark Uyeda observed that technology no longer appears to be the principal constraint; instead, the key questions increasingly concern readiness and risk management.

December 6 Will Mark a Significant Step Toward 23x5 Trading

Beginning December 6, 2026, the SIPs are expected to operate on a 23x5 basis, from 9 p.m. ET Sunday through 8 p.m. ET Friday, with a one-hour maintenance pause from 8 p.m. to 9 p.m. ET Monday through Thursday. The Financial Industry Regulatory Authority (FINRA) also plans to broaden the hours of its Trade Reporting Facilities, while clearing infrastructure already has moved toward 24x5 operations. The expanded market-data infrastructure will permit approved exchanges to offer trading during overnight hours. The transition also includes new market protections. The SEC has approved modifications establishing overnight price-band protections, and trading venues have developed standards addressing certain corporate actions during expanded hours. Commissioner Hester Peirce characterized these developments as evidence that the securities market is moving “decisively toward extended hours trading.”Certain core market conventions nevertheless will remain unchanged. The regular market will continue to open at 9:30 a.m. ET, and the 4 p.m. ET close will continue to establish the price used by mutual funds to

calculate net asset value. Speakers throughout the roundtable emphasized that firms will not be required to participate in expanded trading hours simply because the infrastructure permits it to occur.

Overnight Trading Is Growing but Remains Limited

SEC staff data showed that in August 2026, the overnight session accounted for 0.9% of total National Market System (NMS) share volume and 0.8% of total NMS dollar volume. Average daily overnight share volume increased 359% year over year to 144.6 million shares. Second-quarter 2026 consolidated audit trail data show that accounts classified as foreign represented the largest share of overnight share volume (37%), while institutional accounts represented only about 7%. Overnight trading also is concentrated in a relatively small number of securities.

Panelists generally expected institutional participation to develop gradually and to depend on liquidity, spreads, trading costs, and particular use cases such as hedging or responding to market events. Commissioner Uyeda similarly noted that expanded hours could either redistribute liquidity away from periods where activity is currently concentrated or spread liquidity too thinly, potentially affecting price discovery and execution quality.

Existing Broker-Dealer Obligations Continue to Apply Overnight

A recurring theme was that expanded trading hours do not create a separate regulatory environment. FINRA emphasized that best execution obligations apply regardless of when a customer order is received or executed while also noting that it has solicited comment on whether further guidance is needed with respect to best execution requirements during extended-hours trading.¹ FINRA described the requirement as principles-based, noting that market conditions are built into the best execution analysis itself. The analysis may vary based on overnight market conditions, including the number of available venues and the availability of pricing and quotation information, but the obligation itself continues to apply. Panelists separately identified FINRA Rule 2265, which requires risk disclosure for extended-hours trading, as continuing to apply.

Commissioner Peirce raised a question regarding how broker-dealers should satisfy best execution obligations when overnight liquidity is dispersed and spreads are wide and whether the SEC or FINRA should provide additional assistance. Panelists echoed that request, asking for more standardized guidance on how to construct a best execution analysis from different overnight data feeds. Panelists likewise emphasized that firms will need to extend existing market access controls, surveillance systems, supervisory procedures, and disclosures into overnight trading. The Securities Industry and Financial Markets Association noted that it is working with brokers on the treatment of net capital and margin requirements during overnight sessions.

Chairman Atkins Highlights Reg SHO Locate and Securities Lending Considerations

Chairman Paul Atkins noted that market activity may need to expand to increase incentives to offer services such as prime brokerage and securities lending that support market making and institutional participation. He also noted that firms have cited operational challenges in obtaining locates to support market making when spreads may be wide.

Chairman Atkins also discussed the potential for tokenization to facilitate real-time inventory management, which he said could increase efficiency, reduce settlement failures, and mitigate the risk of abusive naked short selling, “with the goal of eliminating that possibility altogether.” He stated that he had asked SEC staff to consider steps that could pair a growth-friendly environment with protections against harmful market behavior. For broker-dealers and market makers considering overnight participation, these comments highlight the importance of considering how existing locate processes and securities-lending infrastructure will operate across expanded trading hours.

Supervision, Staffing, and Resiliency Will Require Attention

Participants discussed a range of potential staffing models, including domestic overnight coverage and international “follow-the-sun” approaches. The discussion emphasized real-time monitoring, appropriately licensed supervision, escalation procedures, and the potential cross-border registration issues associated with using personnel outside the United States.

Operational resiliency was another significant focus. Commissioner Uyeda identified clearing, collateral, payment, settlement, default management, staffing, failover, cybersecurity, and resiliency as areas raising key questions for an overnight market. Commissioner Peirce similarly highlighted industry concerns about compressing batch processing and critical IT maintenance into a much shorter nightly window.

Price Protections and Issuer Considerations Remain Under Development

The initial overnight framework for managing market volatility is expected to use 20% price bands. These bands apply during the overnight session, from 9 p.m. to 4 a.m. ET, Sunday evening through Friday morning, and are set 20% above and below reference prices that are based on the official closing price and the consolidated last sale as of 7:45 p.m. ET.² Trading centers must maintain policies and procedures reasonably designed to prevent trades and quotations outside the bands. Trading within the bands continues, and there is no automatic trading pause. In practical terms, overnight quotations and trades, and therefore the overnight NBBO, must stay within 20% of those reference prices; if the market moves beyond the band, orders priced outside it cannot be executed or displayed, so trading is effectively capped at the band limit for the remainder of the overnight session. The primary listing exchange may, however, declare a regulatory halt where the bands are impeding price discovery, and a security halted overnight will not reopen during the overnight session. Panelists generally viewed those protections as a starting point but noted that static bands may present challenges when material news causes fair value to move significantly. Future work may consider more dynamic bands, trading halts, and reopening mechanisms.

The roundtable also highlighted potential implications for issuers. Commissioner Peirce questioned whether companies may need to reconsider longstanding practices for timing material announcements as trading expands beyond core hours and whether the SEC may need to modify EDGAR to ensure that corporate actions and material information can be disseminated in a timely manner during the overnight session. Chairman Atkins likewise encouraged issuer engagement regarding corporate actions, dissemination of material information, and SEC filings during EDGAR filing hours.

Looking Ahead

The December 6, 2026, expansion of the SIPs to 23x5 operation represents an important step toward broader extended-hours trading rather than the end of the transition. The Division of Trading and Markets staff stated that certain initiatives will continue to evolve after December 6 and that eventual expansion to 24x7 trading remains possible. As a backstop, the SEC has granted 24X temporary conditional relief to begin overnight trading on January 24, 2027, if the SIP extended-hours amendments have not been implemented by then.³

Broker-dealers and other market participants considering overnight trading should evaluate how their existing best execution, short sale compliance, supervisory, surveillance, market access, staffing, and resiliency frameworks will operate across expanded trading hours. Participation remains a commercial decision, and the roundtable indicated that institutional adoption may develop gradually as liquidity, market structure, and supporting services evolve.

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1 See FINRA Reg. Notice 26-15, Sec. 6.
2  See Exchange Act Release No. 106042, 91 FR 51515 (Aug. 10, 2026).
3  See Exchange Act Release No. 106061, 91 FR 52756, 52759 (Aug. 14, 2026).