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The global shift towards shorter settlement cycles marks a major step forward in improving market efficiency, mitigating counterparty risk and enhancing liquidity. This progression reflects a broader move in the direction of greater operational efficiency – fuelled by investor demands for increased flexibility and convenience in trading outside of regular market hours. In parallel, there is rising interest for traditional markets to extend their trading hours to align more closely with their digital counterparts, supported by ongoing advancements in digital technology.
Given the interconnectedness of US equities markets and their critical role in providing investment opportunities, the prospect of 24x5 trading or extending trading sessions from 8pm to 4am ET in US equities markets is gaining appeal among investors around the world. Today, Asia-Pacific investors – largely retail participants and some institutional firms in Australia, Hong Kong, Taiwan, Japan, Korea and Singapore are actively seeking improved access to US equities that aligns with their local market hours – driving demand for credible and reliable trading venues that offer transparency, strong liquidity and efficient price discovery.
Addressing market needs
As interest in near round-the-clock trading of US equities intensifies, DTCC is proceeding with phase two of its extended clearing and trading windows along with ongoing modernization initiatives. These efforts will ensure the continued safety, stability and smooth functioning of the US financial system under any circumstances. Pending regulatory review and approval of any required rule modifications, the additional extension of trading hours – slated for Q2 2026 – will enable DTCC’s equities clearing subsidiary, the National Securities Clearing Corporation ( NSCC ), to apply its central counterparty guarantee to overnight transactions across multiple time zones.
In September 2024, the NSCC introduced phase one of its expanded trade capture capabilities, allowing market centres and trading platforms to submit trades at 1:30am ET, approximately 2.5 hours earlier than before. Previously, “off-hours” trades were submitted around 4am EST.
Several trading platforms and industry participants have either expanded or are planning to expand their trading hours to accommodate overnight trading; and additional participants, such as alternative trading systems and exchanges, have joined or are expected to join this community.
As providers of up-to-date market data gathered from multiple exchanges to promote transparency and equitable access for both domestic and international investors, the securities information processors ( SIPs ) must synchronize their operational schedules with any changes in trading hours. Accordingly, on May 6 2025, the operating committees of the SIPs announced their intention to submit a plan amendment to regulators, proposing an extension of the SIPs’ operating hours to support extended trading activity.
As more industry participants – including trading venues and liquidity providers – offer overnight trading, institutional firms, particularly those located in the Asia-Pacific region, are likely to be attracted to the ability to enter and exit positions with greater speed and flexibility. Stronger industry representation is expected to contribute to growing trading volumes and improved spreads. Moreover, this increased accessibility essentially enables institutional firms to promptly respond to investment opportunities arising from global market movements and news throughout an extended, near 24-hour trading window.
Setting the stage
However, this proposed development requires industry stakeholders to collaborate on a comprehensive blueprint, including reassessment of current risk management frameworks, trading sessions and operating models, among other technical considerations and precautionary measures needed to protect investors’ interests. Upgrading of existing infrastructure, processes and systems remains essential, as with any major adjustments to market structure, just like the transition to T+1. Success depends on regulatory oversight, industry-wide alignment and coordination among all market sectors, including exchanges, trade associations, industry bodies and critical market infrastructures like DTCC.
While overnight trading volumes currently remain relatively low across the industry, DTCC, as a critical market infrastructure, closely monitors activity levels and has implemented tools and levers to mitigate any unexpected risks and make necessary adjustments to margin coverage.
As the industry examines the far-reaching implications and risks associated with 24x5 trading, the spotlight now switches to institutional firm-level readiness. Specifically, are Asia-Pacific institutional firms equipped to capitalize on this emerging opportunity?
Aligning staffing and support models
To support extended-hours trading, firms may need to reassess current staffing levels and operating hours based on their interest in continuous market access. Depending on specific operational requirements, firms could adopt a distributed support model for round-the-clock coverage across regions or implement rotational shift strategies to ensure continuous oversight of trading activities.
Improving process infrastructure
To fully realize the value of 24x5 trading, Asia-Pacific institutional firms need to implement scalable post-trade processing systems that can accommodate longer trading hours and spikes in trade volumes – moving beyond the limits of traditional batch processing. Automating allocation, confirmation, and trade-matching workflows allows these firms to prioritize exception handling and error management, reducing the risk of settlement failures. In essence, post-trade operations – incorporating straight-through processing and central matching capabilities – are key to optimizing investment strategies.
Strengthening data oversight
While 24x5 trading offers significant benefits, it introduces operational complexities that could undermine its advantages – if left unaddressed. A critical area is the handling of corporate actions – such as dividends and stock splits – which currently lack standardized processing across the industry. The industry must align on a framework that includes timely dissemination of information by SIPs and consistent handling of trading halts across exchanges and alternative trading systems.
As the volume of data generated by corporate actions continues to grow, firms must also prioritize robust data oversight and control mechanisms. Strengthening the data governance framework will be essential to ensure data quality, consistency, and timeliness – enabling informed decision-making and reducing operational risk across platforms. Without a unified approach, inconsistencies in how these events are managed can disrupt the smooth functioning of the US financial ecosystem
Driving operational continuity
The journey to uninterrupted trading demands a strong emphasis on operational resilience. Asia-Pacific institutional firms must ensure that their systems and processes are robust enough to handle unforeseen operational incidents that could disrupt existing infrastructure, such as cyber threats and third-party risks.
All things considered, enabling broad access to 24x5 trading is a collaborative effort that necessitates the commitment and engagement of every participant within the financial ecosystem – the system is only as resilient as its weakest counterparty. As industry stakeholders accelerate their preparations for 24x5 trading, it is essential for Asia-Pacific institutional firms to commence readiness initiatives now.
Val Wotton is the managing director and global head of equities solutions at DTCC.
