The US Securities and Exchange Commission (SEC) approved America's first round-the-clock national securities exchange yesterday, according to a press release. The 24X National Exchange will be set up in two phases. The first stage, expected to be implemented in the second half of 2025, would enable trading of US-listed shares between 4 a.m. and 7 p.m. ET on all weekdays.
Meanwhile, the second stage will allow stock trading from 8 p.m. Sunday through 7 p.m. ET Friday. However, there would be a one-hour break starting at 7 p.m. each operational day for software patches and routine testing of infrastructure functionality, meaning that the exchange will be live for 23 hours daily, five days a week.
New Exchange Backed By Billionaire Investor Steve Cohen
The 24X National Exchange is backed by New York Mets owner and billionaire investor Steven A. Cohen's Point72 Ventures Fund. Cohen, known for his high-risk, high-reward investing strategy, has a personal net worth of $21.3 billion. The trading venue will allow retail and institutional investors globally to trade US securities via broker-dealers who are authorised 24X members. However, the exchange will be closed on US market holidays like the NYSE and NASDAQ.
24X Exchange CEO Dmitri Galinov highlighted that the 24X team has been working to achieve this milestone approval for years. He pointed out that investors face risks when markets are closed in their respective locations, which the new exchange will reduce by offering around-the-clock facilities to trade US equities while ensuring adherence to all SEC regulations around investor protection.
"With this historic SEC approval in place, we will build and operate a customer-driven Exchange that can rapidly align with market demands and adapt quickly to client feedback," Galinov added. "We look forward to bringing a superior trading experience to global customers. 24X National Exchange will deliver the cost efficiency, speed, resilience, and adaptability that the company's financial institutional customers have long come to expect." The 24X approval comes after the firm's first application to the SEC in 2023 met considerable resistance and objections.
New-Age Tech, Focus on APAC Region
The Cohen-backed exchange will focus on enabling trading at the "lowest possible cost" across various asset classes. Upon launch, it will prioritise capitalising on the growing demand in the Asia-Pacific region for overnight liquidity in US stocks. The trading exchange will be founded on a proven, "state-of-the-art" tech platform from MEMX Technologies. Meanwhile, management pledges continuous enhancements and innovations to provide a better member experience.
Both Charles Schwab and NYSE Planning To Expand Trading Hours
The 24X approval follows Charles Schwab's (NYSE: SCHW) announcement that it could offer 24-hour trading access for S&P 500 and NASDAQ 100 stocks by next year. Treasuries and currencies are traded almost continuously on weekdays, naturally driving demand for overnight stock trading facilities. However, stocks have yet to catch up to offer extended-hours trading as effectively due to the stringent regulatory rules and complexities involving trade settlements.
Firms like Robinhood Markets (NASDAQ: HOOD) and Interactive Brokers Group (NASDAQ: IBKR) have already tapped into the growing demand through off-exchange 24/5 stock trading on Blue Ocean's alternative trading system. The strong momentum for extended-hours trading also prompted the New York Stock Exchange parent Intercontinental Exchange (NYSE: ICE) to recently file an application to offer 22-hour trading windows on all weekdays.
However, 24X's milestone garnered criticism from the consumer advocacy group Better Markets, which said the move could negatively impact investors and markets. "Retail investors trading during an overnight session will be trading in a market where there are few buyers and sellers, and where prices will be more volatile and less favourable than during normal hours," stated Benjamin Schiffrin, Better Markets director of securities policy.
"This means that, during overnight sessions, retail investors will only get the best prices in a bad market, thereby losing money if they had traded during normal business hours." Furthermore, several institutional investors are concerned that light overnight trading volumes could enable smaller trades to have an outsized impact on prices.
