The National Securities Clearing Corporation (NSCC) is set to enhance its clearing hours to accommodate extended trading, with the implementation projected for the second quarter of 2026, contingent on regulatory review and necessary rule modifications. This expansion aims to bolster client value by improving liquidity and minimizing counterparty risk. The NSCC will apply its central counterparty guarantee to overnight transactions across various time zones, benefiting global participants.
In September 2024, NSCC initiated phase 1 of the extended trading hours agenda, allowing market centers and trading platforms to begin submitting trades at 1:30 AM ET, approximately 2.5 hours earlier than previously. The forthcoming phase 2 will see NSCC operating continuously for five days a week, commencing Sunday at 8:00 PM ET through Friday at 8:00 PM ET, facilitating overnight trading activities from Alternative Trading Systems (ATS) and Exchanges.
Recognizing the industry’s inclination for standardized operating hours across Exchange and ATS providers, NSCC will continue to collaborate with the Securities Industry and Financial Markets Association (SIFMA), regulators, and industry stakeholders to create cohesive extended trading hours and implement necessary changes to post-trade processes.
As demand for near round-the-clock trading of U.S. equities escalates, the NSCC’s extended clearing hours are a direct response to this market trend. This strategic adjustment not only supports clients but also fortifies the overall safety and efficiency of the markets. The commitment to industry-wide initiatives signifies a proactive approach towards effecting positive changes beneficial to both the industry and investors alike.
Involving multiple stakeholders, including 24 Exchange, Blue Ocean Technologies, Bruce Markets, Cboe Global Markets, Nasdaq, NYSE, and RQD, has been a collaborative effort throughout the extension of NSCC’s clearing hours. This partnership is essential in reducing the gap between trade execution and the NSCC’s clearing and guarantee services, ultimately mitigating counterparty risk and enhancing market safety and soundness.
Overall, the planned enhancements to clearing hours represent a significant step forward in responding to evolving market needs and increasing the efficiency of trading practices in the United States. The aim is to continue improving operational capabilities, ensuring that the infrastructure keeps pace with the dynamic trading environment and investor demands.