Nasdaq is in discussions with regulators and market individuals about implementing 24-hour, five-day-a-week buying and selling on the Nasdaq Inventory Market, with a possible launch within the second half of 2026.
Notably, the initiative goals to develop investor entry, accommodate world buying and selling demand, and modernize market operations.
Addressing World Funding Demand
The transfer in direction of prolonged buying and selling hours aligns with the rising development of worldwide investor participation in U.S. markets.
In keeping with Tal Cohen, Nasdaq President, international holdings of U.S. equities reached $17 trillion in June 2024, practically doubling since 2019. Within the Asia-Pacific (APAC) area, rising monetary literacy and the rise of digital buying and selling platforms have pushed demand for U.S. shares, notably in expertise and healthcare sectors.
“Increasing buying and selling hours can improve entry for traders throughout completely different time zones, providing higher alternatives to interact with U.S. markets,” mentioned Cohen.
Challenges in Liquidity and Market Stability
Whereas round the clock buying and selling might present a extra inclusive market construction, Nasdaq emphasizes the significance of cautious implementation.
At the moment, off-exchange venues comparable to Various Buying and selling Methods (ATSs) and broker-dealer platforms facilitate after-hours buying and selling, however liquidity stays considerably decrease than throughout common market hours, resulting in elevated volatility and transaction prices.
Moreover, Nasdaq‘s latest survey of listed firms discovered that many issuers stay cautious about prolonged buying and selling hours, citing considerations over liquidity and company actions.
The alternate acknowledges that regulatory oversight, technological preparedness, and industry-wide coordination will probably be essential for a profitable transition.
“We should make sure that any structural change upholds the core rules of liquidity, transparency, and integrity within the markets,” Cohen added.
Infrastructure and Regulatory Issues for a 24/7 Nasdaq Buying and selling
The growth to 24/5 buying and selling requires strong infrastructure to deal with hundreds of thousands of transactions per second. Nasdaq highlights that market-wide coordination, much like previous transitions such because the transfer to T+1 settlement and cloud-based buying and selling, will probably be important to keep away from operational disruptions.
Nasdaq’s proposal represents a major step in market evolution, however its success will rely upon regulatory approvals, infrastructure readiness, and acceptance amongst traders and company issuers. The discussions and planning will proceed within the coming months because the alternate works towards its anticipated 2026 launch.
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