Ops teams will need to mull IT, workflow, and risk mitigation upgrades to accommodate the additional trading hours.
Without any fanfare, global post-trade infrastructure provider the Depository Trust & Clearing Corp. (DTCC) has begun an industry-wide testing phase for 24×5 trading in U.S. equity markets. At the same time, a new DTCC and EY report diving into the operational impacts of 24×5 trading finds that this major industry move is likely to lead to pricey technology and risk mitigation upgrades.
Grygo is the chief content officer for FTF & FTF News.
In addition, the shift to longer trading hours will happen as securities firms grapple with the disruptions and innovations of A.I., the rise of digital asset operations and related tokenization concerns, and the ongoing shocks to the system, such as the rollercoaster ride of tariffs.
“As of January 11, DTCC’s industry-wide testing phase for 24×5 trading in U.S. equity markets has officially commenced,” according to a recent statement from DTCC officials. “This phase is a critical step toward enabling near-continuous trading, which will expand global market access, improve responsiveness across time zones, and strengthen market resiliency.”
As the New York Stock Exchange (NYSE), Nasdaq, and CBOE transition to “near-24-hour equity trading,” the DTCC and its equities clearing subsidiary must act to support the change.
“The transition to 24×5 trading represents a structural evolution for the industry —but it also introduces new operational and risk considerations. Testing ensures firms are ready to process trades seamlessly during overnight sessions, maintain robust risk controls, and support resiliency ahead of DTCC subsidiary National Securities Clearing Corp.’s (NSCC’s) transition to a 24×5 schedule on June 28, 2026, and ahead of the national exchanges’ adoption of 24×5 trading, subject to all necessary regulatory approvals,” according to the update.
The regulatory approval process is well underway, and many securities firms want the change to happen yesterday. However, almost 60 percent of them say that they will have to plan IT and risk management upgrades, according to the research paper sponsored by the DTCC and consultancy EY, “The Shift to 24×5 Trading: What It Means for U.S. Equity Markets.” The paper is based on interviews with “95 market participants on anticipated volume shifts, operational challenges, risk management, and membership standards required in support of 24×5 trading … Findings show that most firms expect a gradual increase in overnight trading volume over the next several years.”
The report also made the following predictions:
- “Up to 10 percent of total equity volume is projected to shift to overnight sessions by 2028, driven by global demand;”
- “Retail investors are expected to initially drive overnight trading, with institutional participation assumed to rise during market stress and as infrastructure develops. Over half of survey respondents foresee greater institutional activity in volatile periods;” and
- “Extending trading hours requires aligning market safeguards, such as circuit breakers and surveillance, and updating SIP data feeds to a 24×5 model for real-time accuracy and market stability.”
To avoid mayhem, DTCC officials say in their latest statement that they are “fully prepared to support the industry throughout this process” and they will “collaborate closely with market participants, regulators, and exchanges to ensure readiness. Our goal is to help firms adapt their systems, strengthen operational resilience, and prepare for the future of global trading.” The DTCC has set up a 24×5 readiness hub that can be found here: https://www.dtcc.com/dtcctransformation/24×5
Given the need for new safeguards that the longer trading hours will require, it will be interesting to see how much of an appetite for new rules and regulations the Securities and Exchange Commission (SEC) — among other regulators — will have for the new rules of a much more complex road.
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