#USA #New York #SEC #trading hours #Securities Information Processors

SIPs Aim for Extended Operating Hours

In a substantial move towards enhancing market accessibility, the Securities Information Processors (SIPs) announced plans to extend their operational hours to nearly 24 hours per day, pending approval from the Securities and Exchange Commission (SEC). This proposal comes in response to the growing demand for extended trading hours, allowing investors and market participants more flexibility and access to the markets.

Proposed Changes to Operating Hours

The SIPs outlined their intention to modify their operational schedule from 8 PM Sundays to 8 PM Fridays, excluding holidays. This plan includes a technical pause that will occur each day during which systems can refresh. The pause is expected to last no longer than one hour, specifically scheduled between 8 PM and 9 PM from Monday to Thursday.

Current and Proposed Hours: A Quick Comparison

Before diving into the new proposed hours, let’s take a quick look at the existing schedule:

Current Hours (ET):

• - Early Hours: 4 AM – 9:30 AM
• - Regular Hours: 9:30 AM – 4 PM
• - Late Hours: 4 PM – 8 PM

Proposed Hours (ET):

• - Extended Early Hours: 8 PM to 9:30 AM (following a one-hour pause)
• - Regular Hours: 9:30 AM – 4 PM
• - Late Hours: 4 PM – 8 PM

Implementation Pathway

The process of extending the operating hours involves several key steps. The SIPs will submit an amendment plan to the SEC for review, which has the authority to approve or disapprove this proposal within 300 days. For the extended hours to be realized, three main prerequisites must be fulfilled:
1. The Depository Trust Clearing Corporation (DTCC) must provide clearing services during the proposed operating hours.
2. The SIPs must ensure their systems can handle the dissemination of quotes and trades, including those from off-exchange transactions.
3. Listing markets must support the planned changes. This includes necessary updates to symbol directory messages that will impact these markets.

The Operating Committees of the SIPs have tasked their teams to prepare for these changes promptly. Their goal is to roll out the new operating hours as soon as essential updates to the SIPs are made, touching on aspects like round lots and fractional shares.

Industry Response and Future Expectations

The movement towards nearly 24-hour trading is a critical response to the industry's requests for greater flexibility. Jeff Kimsey, Chairman of the SIP Operating Committees, emphasized the industry’s eagerness to transition to round-the-clock trading: “We know the industry is eager to move toward 24-hour trading, and the SIPs are determined to make the necessary changes to facilitate that.”

As trading becomes increasingly global, the changes could enhance transparency and accessibility, a core objective of the SIPs. By processing and consolidating all real-time equities bid/ask quotes and trades from registered exchanges into a singular feed, the SIPs provide crucial support for the market’s infrastructure.

About the SIPs

SIPs play a pivotal role in the U.S. market structure by serving as the point of consolidation for trade data, making it easier for investors to access necessary market information. The SIPs consist of two primary entities, the Consolidated Tape Association (CTA) and the Unlisted Trading Privileges (UTP), each responsible for different segments of securities trading.

The movement towards extended trading hours will potentially offer investors better opportunities to react to market events, thus fostering a more dynamic trading environment. As discussions and planning for this significant change continue, all eyes are on the SEC to approve the proposed amendments that might usher in a new era for U.S. trading.

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For ongoing updates, visit CTA Plan and UTP Plan