The Trump administration should proceed slowly in the ramp up to round-the-clock trading, the Managed Funds Association said in a letter sent Tuesday to US government regulators.
The group, which represents hedge funds and private credit firms, asked both the Securities and Exchange Commission and the Commodity Futures Trading Commission to first allow some exchanges to make their planned transition to 23 hours a day, five days a week, before going all-in on the push for continuous, all-hours trading.
Eliminating daily and weekend pauses in trading “would require a fundamental change to market structure, post-trade processes, operations practices, and regulatory oversight,” MFA said. But expanding the existing five-day system to 23 hours a day “will allow regulators and market participants to gain experience with extended overnight sessions while retaining a daily window for maintenance and other operational needs.”
The group added that trading venues can’t make the shift in isolation. From continuous market surveillance requirements to the potential mismatch in capital and clearing timing to heightened manipulation risk, the push to 24/7 trading brings greater risk that no single player in the financial ecosystem can take on by itself, MFA said.
See more: Hedge Fund Strategy Outlook: Fourth Quarter 2026
The SEC declined to comment. The CFTC didn’t immediately respond to a request for comment.
Powerhouses like Nasdaq Inc., the New York Stock Exchange and the London Stock Exchange are planning to extend trading hours in the coming months in a bid to better compete with upstarts that already allow 24/7 buying and selling, like Kalshi Inc. and Binance. Proponents say that change would give traders across the globe more access, while critics argue it could lead to heightened volatility and operational challenges.
“Because the 23/5 framework has not yet operated across the market under live overnight conditions, regulators should treat its implementation as a real-world test of liquidity market quality, operational resilience, surveillance, best execution, and investor protection,” MFA said.
The CFTC is preparing to host an industry panel to discuss a move toward 24/7 trading next month and the SEC held its own session on the topic in September. Neither agency has set timelines for such a shift, but agency officials have acknowledged the acceleration in financial markets and regulators’ desire to keep up with it.
“If registered US exchanges can evolve to satisfy this increasing appetite and offer additional hours, then greater investor benefit and protection, broader global access, and improved liquidity will likely follow,” SEC Chairman Paul Atkins said in remarks at the agency’s Sept. 17 event.
A message from Advisor Perspectives and VettaFi: Discover something new! Click here to register for our upcoming webcasts.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
More ETF Topics >
