SIFMA Backs Nasdaq Proposal to Expand Equity Trading Hours

SIFMA supported a Nasdaq Stock Market LLC ("Nasdaq") proposal to extend its U.S. equity and exchange-traded product trading hours to 23 hours per day, five days per week. 

In a comment letter responding to the SEC's notice of the proposal, SIFMA stated that Nasdaq’s plan aligns with broader industry efforts to define the overnight trading day. SIFMA emphasized its support for adopting an 8:00 PM ET trade date rollover and a standard "one-hour technical pause" to mitigate systemic risk and allow for essential system testing. However, SIFMA noted that a successful transition to near-full U.S. overnight hours requires resolving significant operational hurdles and coordinating industry-wide processes, particularly concerning corporate actions, market structure, and the availability of consolidated market data.

SIFMA raised several issues for further consideration: 

1. Condition Implementation on SIP Availability. SIFMA emphasized that expanded trading hours should not commence until the Securities Information Processors ("SIPs") are fully operable to collect and disseminate market data during overnight hours. SIFMA emphasized that transaction transparency is foundational for price discovery and investor protection and noted the importance of aligning Trade Reporting Facility ("TRF") hours to avoid information gaps between exchange and alternative trading system activity.
2. Harmonize the Trading Day and Exchange Pause. SIFMA supported Nasdaq’s standardized 23/5 model, including the one-hour trading pause between 8:00 PM and 9:00 PM ET. SIFMA stated this pause is critical for maintenance, system transitions, and processing corporate actions. The association also supported maintaining existing rules and functionality during the "Day Session," while applying more limited order types and risk controls—such as permitting only limit orders—during the lower-liquidity "Night Session."
3. Market Structure and Operational Challenges. SIFMA noted that extended trading hours may involve lower liquidity, wider spreads, and increased volatility, and that key infrastructure—such as SIPs, DTCC systems, and TRFs—must be coordinated to support a smooth transition.
4. Coordinate Corporate Actions and Volatility Controls. SIFMA identified corporate actions as the largest remaining hurdle to a 23/5 market, citing the need to modernize and better coordinate processes across market participants. SIFMA supported efforts to integrate corporate action announcements into SIPs and to establish harmonized overnight volatility controls, including Limit Up-Limit Down bands, to provide clear guardrails for trading halts.