During last week’s the SEC’s “Roundtable on Preparations for 24-Hour Trading,” panelists generally conveyed substantial confidence that the technical infrastructure for 23×5 trading will be ready by December 6th, but they noted that technical readiness is only the first chapter. The bigger question is whether overnight trading develops sufficient liquidity, execution quality, resiliency, harmonization and price stability to attract institutions and support issuers as well as retail and international investors.
For public companies in particular, the issues worth watching are overnight volatility protections, the timing of material disclosures, corporate-action procedures – and whether issuers should develop new monitoring and escalation practices for significant overnight events.
Thanks to Cooley’s Luci Altman, Liz Dunshee and Siana Lowrey, here are 11 things to note from the roundtable:
1. December 6 Is the Infrastructure Launch, Not a Fundamental Redesign of the Market: The roundtable reflected broad confidence that U.S. equity markets will be operationally ready to begin the transition to 23×5 trading on December 6, 2026. The regular 9:30 a.m.–4:00 p.m. session and traditional closing price will remain intact. The major changes involve overnight infrastructure: SIPs and FINRA trade-reporting facilities will expand their hours, exchanges will join ATSs in overnight trading, and overnight transactions will appear on the consolidated tape in real time.
A 20% LULD-styleovernight price band will provide an initial market-wide volatility protection, although comparable bands will not apply beginning with the 4:00 a.m. pre-market session.
2. Overnight Trading Is Growing Quickly But Remains Small and Concentrated: Overnight activity currently accounts for only about 1% of NMS trading volume, while extended-hours trading more broadly represented approximately 12.5% of volume in Q2 2026. Overnight participation remains relatively narrow and is disproportionately concentrated in low-priced securities, including sub-dollar stocks and some Asia-domiciled companies.
By dollar value, however, the most actively traded overnight securities overlap more closely with heavily traded daytime names. Participants expect the December changes to increase venue choice, transparency and potentially the breadth of participation.
3. Industry Readiness Is High and Coordination Has Been Extensive: Nasdaq, NYSE, Cboe, FINRA, DTCC, ATSs and other market participants expressed confidence in the December 6 launch. Industry groups have worked to harmonize trade dates, corporate actions, regulatory halts, market data and operating schedules. Particularly important are standardized protocols for overnight halts involving symbol and CUSIP changes, reverse splits and certain distributions.
The goal is to make an increasingly fragmented overnight market function seamlessly across exchanges and ATSs. The roundtable focused heavily on market participants and investors, with comparatively limited attention to public-company considerations.
The sessions heavily focused on the investor and market participant experience, with little mention of company perspective, despite Commissioner Peirce raising questions in her opening remarks about the impact on disclosure practices, issuer burdens and EDGAR operating hours.
4. The One-Hour Pause Works for 23×5; True 24×7 Is a Different Challenge: Market participants generally believe the one-hour nightly break can accommodate maintenance, corporate actions and necessary processing, particularly as infrastructure shifts from overnight batch processing toward continuous processing. There was much less agreement about the path to 24×7 trading.
One important constraint is settlement: securities infrastructure may become capable of continuous operation, but traditional Federal Reserve payment rails do not operate continuously over weekends. Accordingly, 24×7 trading presents materially different infrastructure issues from the December 23×5 transition.
5. Retail and International Investors Will Likely Lead; Institutions May Follow More Slowly: Current overnight demand comes primarily from retail and international investors, including investors in Asia seeking access to U.S. equities during local daytime hours. Retail platforms report that overnight trading can generate incremental participation rather than merely shifting daytime volume.
Institutional investors appear more cautious and initially expect overnight activity to be event-driven, such as around earnings, elections, geopolitical developments and other significant news.
6. Liquidity and Best Execution Will Be Critical to Institutional Adoption: Overnight market quality remains uneven. Citadel reported spreads roughly two to three times regular-session spreads across broad categories, while DriveWealth reported tighter median spreads in its own activity. Participants expect increased demand, market-maker participation and competition eventually to improve liquidity and spreads, but there is a chicken-and-egg problem: institutions may hesitate because counterparties and liquidity are limited, while brokers may hesitate to invest without institutional demand. Best-execution obligations remain fully applicable overnight, making fragmented liquidity and quotation sources an important post-launch issue.
7. The 20% Overnight Price Bands Are a Starting Point; Not Necessarily the End State: Participants generally viewed the initial 20% bands as workable for launch but identified a tension between investor protection and legitimate price discovery. Significant overnight news could move a company’s fundamental value by more than 20%, potentially causing trading to accumulate at an artificial boundary; conversely, thin liquidity could allow small orders to cause disproportionate price movements.
Potential future approaches include temporary pauses followed by reset bands or protections tailored to a security’s liquidity and volatility. The absence of comparable bands after 4:00 a.m. also warrants monitoring.
8. Issuers Raised Concerns About Volatility, Disclosure and Their Role in Market Structure: The issuer perspective was notably more cautious. Thin overnight liquidity could permit relatively small trades to create large price movements that may not reflect fundamental value or broad investor sentiment, with potential consequences for long-term shareholders and index-related considerations.
Extended trading also may affect when companies release earnings and other material information, since issuers traditionally have considered the availability of deep liquidity when timing disclosures. The issuer representative advocated greater public-company participation in developing volatility protections and other market-wide guardrails. The notes also flag for consideration whether issuers should develop escalation or overnight-monitoring procedures around significant anticipated events.
9. Tokenization Is Related to 24×7 Trading But Isn’t Necessary for 23×5: Participants distinguished extended trading from tokenization. Existing U.S. infrastructure can support longer trading hours without tokenizing equities. At the same time, blockchain-based settlement and payment systems eventually could help address some obstacles to weekend trading. Participants also raised investor-protection concerns that some offshore products marketed as “tokenized equities” may actually be synthetic instruments rather than ownership interests in the underlying securities.
10. Capital Formation Questions Go Beyond Longer Trading Hours: The issuer discussion placed 23×5 trading within the broader debate over the health of U.S. public markets, including the declining number of public companies, growth of ETFs and passive investing, and challenges in the IPO market.
Increased international participation could potentially make U.S. public markets more attractive, but participants also identified the cost and complexity of being public and raising capital as more fundamental concerns. The relevant question is therefore not merely whether longer hours generate more volume, but whether they improve the ability of public markets to raise capital, provide liquidity and support stable valuations.
11. December 6th Begins an Iterative “Day 2” Process: Participants did not expect a “big bang.” Exchanges, brokers and institutional investors are likely to enter the overnight market at different speeds while monitoring volume, spreads, execution quality and investor behavior. Key post-launch issues include more sophisticated volatility controls, institutional liquidity, global staffing and supervision, issuer disclosure practices, harmonization among ATSs and exchanges, best execution, tokenization and settlement infrastructure, and eventually the architecture necessary for true 24×7 trading.
Authored by
Broc Romanek