On July 23, the SEC announced that it will host a public roundtable on September 17, 2026, to discuss preparations for potential 24-hour trading in the U.S. equity markets.
According to the SEC, the discussion will focus on supporting overnight trading, operations and resiliency in a 24-hour market, and opportunities and challenges for expansion.
While no rulemaking has been proposed, the announcement reflects a growing recognition that overnight equity trading is evolving from a niche offering into a potentially permanent feature of U.S. markets.
In announcing the September 17 roundtable, SEC Chair Paul Atkins stated that “We are moving towards a new day – and night – in the U.S. equity markets. With the expansion to overnight trading, I’m excited at the prospect of U.S. equity markets aligning with those markets that already trade continuously and look forward to balancing round-the-clock trading with all-important investor and customer protections.”
Potential Implications of 24-Hour Equity Markets
For many SEC-registered investment advisers who trade public equities in client portfolios, the prospect of continuous trading may initially appear to be simply an expansion of existing extended-hours trading. However, a shift to 24-hour trading would represent one of the most significant structural changes to U.S. equity markets in decades. The implications could extend well beyond traders and portfolio managers, as these expanded hours would also fundamentally affect compliance, operations, cybersecurity, risk management, valuation, and governance.
Some of the areas that could be materially affected include:
- Best Execution: Overnight trading may involve lower liquidity, wider spreads, fewer competing market centers, greater volatility and temporary pricing dislocations. Advisers may need to revisit best execution policies and consider whether execution quality during overnight sessions warrants separate or additional evaluation.
- Trading Supervision: Continuous trading raises practical questions about who monitors overnight activity, receives alerts, and has authority to respond to trading or operational events. Firms would need to ensure appropriate oversight outside traditional business hours.
- Trading and Market Abuse Risks: Thin overnight markets may create additional opportunities for potentially abusive activity. Advisers should assess whether existing trade monitoring, exception reporting, restricted-list controls, or escalation procedures adequately address unusual overnight activity.
- Valuation: Meaningful overnight trading could complicate traditional reliance on regular-session closing prices for valuation. Advisers, administrators, auditors, and valuation committees may need to consider how overnight events and continuously traded securities should be treated.
- Operational Resiliency: Continuous trading reduces traditional overnight windows for system maintenance, testing, and recovery from operational incidents. Advisers should consider the implications for business continuity, disaster recovery, third-party technology dependencies, and whether critical vendors can support extended market operations.
- Cybersecurity: Cyber incidents and third-party outages could occur while markets remain active, increasing the importance of continuous monitoring and effective after-hours incident response. The amended Regulation S-P requirements further underscore the importance of incident-response preparedness and service-provider oversight.
- Policies and Procedures: As extended-hours trading becomes more prevalent, advisers may need to revisit their current policies pertaining to the areas listed above, among others. Training and annual reviews should also address these potential risks.
Looking Ahead
The SEC’s announcement should not be interpreted as an indication that 24-hour equity trading is imminent. Rather, it reflects an acknowledgment that market participants are increasingly exploring expanded trading hours and that regulators are beginning to evaluate the corresponding operational and investor protection issues.
Nevertheless, firms would be well served to begin considering how continuous markets could affect their compliance infrastructure.
Among investment advisers that trade client assets in U.S. public equities, the firms that adapt most successfully are unlikely to be those with the fastest trading systems. Rather, they will be those whose compliance, operational, and governance frameworks evolve alongside the markets in which they participate.