Remarks at the SEC Roundtable on 24-Hour Trading

Good morning and welcome to the SEC's roundtable on 24-Hour Trading. Thanks to those of you who are here in person at SEC headquarters as well as to those who are watching over our livestream. And a special thank you to the participants, who have taken the time to prepare and present views from a variety of different perspectives on what it will take to prepare for trading in a round-the-clock environment.

Evolution of Trading Hours

Securities trading hours in the United States have never been static. They have evolved, based on demand and the technology available at the time. In the earliest years of the New York Stock Exchange in the late 18^th century, information flowed slowly and daylight framed human activity; thus, trading did not occur continuously. Instead, brokers met for twice-daily call auctions, where each listed stock was announced in turn, and trades occurred only if bids and offers matched.

In 1871, the NYSE introduced continuous trading, a significant modernization of market operations. But trading hours and days would vary widely over the ensuing decades. Only in 1952 was the five-day schedule standardized and Saturday trading eliminated after eight decades of six-day trading. But even then, the standardized schedule was interrupted in the late 1960s when growth in trading volume created such operational challenges for the human clerks who processed transactions, that the NYSE temporarily shortened hours and even closed on Wednesdays to manage the "paperwork crisis." The modern trading schedule of 9:30am to 4pm that we are now familiar with wasn't adopted until 1985. The evolution of trading has, of course, continued as ECNs, ATSs, and modern broker-dealer platforms have expanded investors' access to trading during pre-market, after-hours, and ultimately overnight sessions.

Moving Forward

As we look toward expanded overnight trading, technology no longer appears to be the limiting factor. There are, however, new questions arising, centered on the readiness of market participants and regulators to operate and manage risk in overnight sessions. How will clearing, collateral, payment, settlement, and default management systems be expected to operate in the overnight session? Where should market participants expect to bolster staffing levels and monitoring capabilities? Also, what failover, cybersecurity, and resiliency measures are appropriate for continuous trading? Will increased connectivity between global markets introduce more volatility as market events across the globe impact U.S. capital markets in real-time?

I am also interested in how expanding overnight trading may affect liquidity in different securities. In some instances, expanded overnight trading may redistribute liquidity away from periods that are overly concentrated and chaotic. In others, however, liquidity might spread too thin, reducing price discovery and execution quality. More information about these dynamics will be helpful to tailor regulatory oversight of expanded trading.

The Close

As former Chairman Richard Breeden observed in 1991, the United States has long been part of "a 24-hour securities marketplace, because at almost any hour of the day anyone can buy or sell securities of U.S. companies that are listed in Tokyo, London, and other marketplaces." The question is not whether trading happens after traditional U.S. hours, but where it happens-and whether our markets are positioned to remain the preferred venue for investors.

I commend the Division of Trading and Markets and the staff who assembled a broad and experienced group of panelists, and I look forward to hearing your views.