Statement on the Commission’s Approval of the 24X National Exchange Application for Registration as a National Securities Exchange

The Commission’s order approving the registration application of 24X National Exchange, LLC (“the Exchange”) to operate as a national securities exchange represents a first step toward permitting, for the first time, overnight trading on a national securities exchange. An overnight session on a lit exchange could make trading more convenient for investors both in the U.S. and abroad. It potentially will draw more participants into our markets. The Exchange’s rules provide for additional disclosures to investors regarding the risks of trading in the overnight session, and the approval order allows overnight trading to commence only after the Equity Data Plans are in concurrent operation. With this order, the Commission provides for innovation in our lit markets with disclosure-based investor protection measures that are consistent with the Commission’s historical practice.

As commenters pointed out, the introduction of overnight on-exchange trading raises a number of concerns and questions. Market participants will need to make operational, software, and other changes to accommodate overnight trading and may have questions on issues related to, for example, clearing, settlement, margin, and application of Commission and FINRA rules, and investor protection issues related, for example, to potentially lower liquidity and higher volatility during overnight trading.[1] These issues should not impede our approval of the Exchange’s application. As market participants work through them over the coming months (and before overnight trading begins on the Exchange), we encourage them to continue to engage with the Commission on these and other questions that may arise as they begin making changes required to participate in an eventual overnight session. We also hope that the Commission will consider whether a roundtable or an open comment file or both would be helpful in addressing these questions