Three major market structure changes are underway simultaneously: 24/7 trading, tokenization, and the Rule 611 review, creating what panelists at SIFMA’s “Future of Markets” session described as an unprecedented period of transformation that requires coordination across the industry.
The panel during SIFMA Roundtable: Building the Roadmap to 24/7 Trading on January 28, brought together executives from Robinhood, Citadel Securities, Jane Street, ICE, Cboe, JPMorgan, T. Rowe Price, and Bank of New York to discuss how firms are navigating these changes while maintaining market integrity.
Matt Billings, president of Robinhood Financial, said his firm already operates 24/5, starting at 8 p.m. Sunday and ending at 8 p.m. Friday. “Our clients have a median age of 35 years old. So 75% of them are millennials or Gen Zs, and they happen to be more racially diverse than incumbent brokerages,” he said. “They’re extremely digitally native, so they’re comfortable accessing the market at times that make sense for them.”
The demand is real, according to Mike Harrington, head of sales and client relationship management for Citadel Securities’ retail division. Pre-market and after-hours trading now represents “about 10% of the daily traded volume, about 7.5% of notional,” he said. That’s grown from 1% to 2% when they started in 2015.
Average retail orders are about $5,000, Harrington said, while “the average depth of book in the symbols that are being traded is around $7,500, so plenty of liquidity to satisfy demand of retail clients.”
Mehmet Kinak, Global Head of Equity Trading at T. Rowe Price, outlined why institutions aren’t rushing in. “We do run batch processing cycles still overnight,” he said. “That’s the only time, by the way, once Australia opens, that any market is closed in the world.”
Beyond technology, liquidity concerns dominate. “A lot of the names that we trade don’t really have volume during the continuous markets,” Kinak said. T. Rowe has a “very, very large small- and mid-cap franchise,” and finding overnight volume in those names isn’t realistic yet.
Even more important is transparency, according to Kinak: “Without that information, I wouldn’t venture into what’s happening in overnight right now, because it’s not reporting live.” He added: “The first thing I would tell everyone is, if we’re going to go to 24/5 and 23/5, we need to be incremental. One of the first things we should do is have the trade reporting facility start reporting trades overnight as they happen.”
Ron Hooey, head of execution quality at Bank of New York, echoed the cautious approach. “We do trade pre and post now, and that seems to meet our current client demand,” he said. BNY is “taking an enterprise approach” to assess readiness across credit risk, corporate actions, and operations. “For us right now, the pre and post is where our clients want to trade, and we’re ready when the demand’s there.”
Michael Blaugrund, Vice President of Strategic Initiatives at ICE, announced the exchange’s intention to introduce a 24/7 tokenized trading venue. “That deliberately was an auxiliary, complementary venue, so as to not perturb the core markets,” he said.
ICE plans to follow existing market structure conventions. “We anticipate protecting the NBBO, however that may evolve. We anticipate supporting limit up/limit down bands. We anticipate supporting trading halts,” Blaugrund said, using NYSE Pillar technology for order entry and market data.
But the tokenization push drew sharp warnings from panelists concerned about fragmenting liquidity.
Kinak cautioned that “a lot of the innovation and that expanding of access is for self-directed individuals, not necessarily for institutions.” He reminded the panel that “an institution, another word for that, is aggregated retail. So what we don’t want to do is harm the market for institutions.”
“I would encourage that costs are not borne by institutional investors, because it’s not something we’re asking for,” he warned.
Debbie Toennies, Global Head of Regulatory Affairs at JPMorgan, laid out the stakes. “In order to recognize those benefits and to have a durable tokenized market, we think it’s important that innovation takes place with proper guardrails,” she said.
She expressed concern about “two markets, one continuous and the other one 24/7, operating alongside each other in the same names and potentially different prices.” While some suggest arbitrage can fix price discrepancies, “if we have 10 or 100 different crypto exchanges trading tokenized equities, that’s a big amount of arbitrage to keep all of that in check,” Toennies said.
Harrington from Citadel Securities warned about the timing. “We’re trying to prepare the rest of the industry to potentially consider opening their hours up, and then on top of that, throw in tokenization at the same time—that’s concerning,” he said. “It only takes one bad event to destroy investor confidence.”
Chris Concannon, CEO of MarketAxess, raised fundamental structural issues. “If you look at our markets today, particularly the equity markets and the derivatives markets, they live off of something called net settlement,” he said. Tokenization delivers T+0 settlement, but “there’s huge leverage in our clearing system in the U.S. because it does not go to T+0, and tokenization will break down that type of leverage.”
Meaghan Dugan, head of U.S. derivatives for Cboe, outlined plans to extend options trading hours to 7:30 a.m. to 9:25 a.m. and add a 15-minute window from 4 p.m. to 4:15 p.m. The proposal covers no more than 100 symbols based on volume and market cap criteria—currently about 20 names.
“We want to make sure we’re really slowly walking into this in a very conservative, optimistic way,” Dugan said. Options face unique challenges because of “the physical delivery and exercise and assignment windows that happen” requiring a four- to six-hour processing window after the close.
Billings said Robinhood recently started the curb session from 4:15 p.m. to 5 p.m. for available indices. “We’re going to be very patient,” he said, noting “time-bound lifecycle events that occur, which are exercise, assignments, corporate actions—those are all things that create an incredible amount of risk.”
Diwa Cody from Jane Street framed the three changes as sharing “a common thread—each is affecting a broader interest in innovation and responding to market demand.” All three are “really about expanding access,” whether to global investors, new technology infrastructure, or different ways to access NMS equities.
Katie Kolchin from SIFMA, moderating the panel, summed up the discussion with three themes: “Interconnected, meaning all the changes; maintain the health of the markets, the integrity, with an eye on investor protections; and patience as we grow and change.”
