SEC Pushes 24-Hour Trading as Tokenized Securities Expand

The U.S. Securities and Exchange Commission is accelerating efforts to modernize American stock markets, exploring a shift toward 24-hour trading while simultaneously opening a regulatory pathway for tokenized securities.

The SEC held a roundtable at its Washington headquarters on September 17 to examine preparations for extended trading, including overnight surveillance, liquidity, settlement, cybersecurity, technology resilience and investor protections. The initiative could eventually move U.S. equities closer to the continuous trading model already common in cryptocurrency markets.

SEC Chairman Paul Atkins said expanding market hours could allow investors to respond more quickly to events that occur outside traditional trading sessions. However, regulators acknowledged that moving beyond weekday daytime trading will require significant operational and market-structure changes.

Commissioner Hester Peirce highlighted potential challenges associated with longer trading hours, including thinner liquidity, wider spreads, increased volatility and reduced opportunities for firms to conduct technology maintenance. Overnight trading could also require stronger monitoring systems and staffing as markets become increasingly continuous.

The discussion came as the SEC approved its new “Innovation Exemption,” a temporary framework allowing qualifying Tokenized Securities Venues to facilitate onchain trading of tokenized National Market System stocks. The conditional relief exempts certain venues from the Exchange Act definition of an exchange and provides related relief for eligible liquidity providers. The exemptions are scheduled to expire five years after publication.

Atkins said tokenization could modernize securities infrastructure by improving inventory management and market efficiency while potentially reducing settlement failures. The SEC’s framework also maintains investor-protection requirements, including limits on trading activity, technology safeguards and requirements that tokenized stocks provide holders with the same rights as equivalent traditional shares.

Together, the 24-hour trading initiative and tokenization exemption signal a broader SEC effort to adapt U.S. capital markets to digital technology and increasingly continuous global trading. The agency is now examining how expanded access can coexist with market stability, surveillance and investor protections.