DTCC's 23x5 trade-capture system goes live as Atkins presses case for 24-hour trading, with SIP and price-band work still in progress

Twenty-three hours a day, five days a week comes to 115 hours. A genuinely round-the-clock week is 168 ^[15]. DTCC's live trade-capture systems cover the first number ^[5], and the example Atkins reached for to explain investor demand sits in the other 53. He said that "waiting to adjust a position or rebalance a hedge until the clock strikes 9:30 on Monday morning may beget missed opportunities or additional risk" ^[13]. Monday's open is a weekend problem. The clearance and settlement capability he cited is a weekday system ^[5].

Each preparation he pointed to is being carried by someone other than the Commission. DTCC built the trade capture ^[5]; the industry adopted the overnight price-band plan ^[6]; and work on the Securities Information Processor plans for overnight price dissemination is described as ongoing ^[7]. The published remarks do not include a proposed rule or a date for extending registered exchange hours ^[18], and Atkins said at the outset that "the views I express here are my own as Chairman and do not necessarily reflect those of the SEC as an institution or of my fellow Commissioners" ^[3].

The decision he put to the room is a commercial one. Atkins said "market intermediaries that face customers will need to make commercial decisions about what services they will provide overnight" ^[8]. He also said market activity may need to expand to raise the incentives to offer services such as prime brokerage and securities lending that support market making and institutional participation ^[9]. Those two statements pull against each other for whoever moves first. A firm that staffs overnight securities lending before the volume arrives pays for coverage that is not yet earning. A firm that waits for the volume stays out of the liquidity that would create it.

Overnight market making has a borrow problem now. Atkins said firms have cited operational challenges in obtaining locates to support market making at a time when spreads may be wide ^[10]. His answer is longer-dated. "I believe that tokenization holds the potential to help the securities industry achieve real-time inventory management, which could drive efficiency, reduce settlement failures, and mitigate the risk of abusive naked short selling," he said ^[11]. He added that he has asked the staff to consider what steps could be taken; the published text of the remarks stops mid-sentence there ^[12].

Some investors are already trading 24 hours a day on alternative trading systems ^[4], and Atkins was speaking only for himself ^[3]. The obligation is in the price-band plan. It would require all trading centers active during overnight hours to establish, maintain and enforce written policies and procedures reasonably designed to prevent trades outside the bands ^[6]. A venue that extends its hours inherits that obligation with its first overnight print, whether or not the Commission votes on trading hours.

Atkins set the pace himself. He recalled that 20 years ago, when he was last at the SEC as a commissioner, proposals to extend US trading hours by mere minutes drew "much angst and gnashing of teeth" ^[14]. Getting registered exchanges to quote through the night will take years. The written-policy requirement and the overnight service menu are decisions for this year's operating plans ^[6][8].