On September 1, 2022, the Securities and Exchange Commission (“SEC”) called for public comments on a proposal to create a 24-hour securities exchange. Currently, no securities exchange registered with the SEC allow investors to trade between 8:00 p.m. and 4:00 a.m. Eastern time.
The proposal comes from 24X National Exchange LLC (“24X”), which filed a Form 1 application under the Securities Exchange Act of 1934 on March 25, 2022. 24X sought registration as a national securities exchange under Section 6 of the Exchange Act. The Company seeks to run the exchange out of a data center located in New York. 24X's initial application was posted for comment in the Federal Register on June 6, 2022. In response, the SEC received three comments, including one from the NASDAQ and one from the New York Stock Exchange. Commentors requested that 24X explain how it would ensure a fair and orderly market and how the new exchange would interact with systems already in place. The commentors also stated that the request should be denied because the regulatory infrastructure necessary to support such an exchange does currently exist.
In light of those concerns, the SEC is now seeking public comment on whether 24X's proposals are adequately designed to prevent fraud and manipulation in the market. The SEC noted that it “has not previously considered the potential issues arising from an exchange application that expands the trading hours for continuous trading as 24X proposes.”
All comments will be posted publicly, and it remains to be seen how the SEC will treat 24X's application going forward.
The SEC's request for comments can be found here: https://www.sec.gov/rules/other/2022/34-95651.pdf
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