SEC Opens Door to 24/7 Markets With Transfer Agent Rule Overhaul

The SEC is pursuing regulatory changes that could influence the future of 24-hour securities trading while bringing transfer-agent rules closer to the realities of blockchain-based markets.

The U.S. Securities and Exchange Commission said Tuesday that it has finalized the agenda and participant list for a Sept. 17 meeting dedicated to round-the-clock trading. The roundtable will be held at the agency’s Washington headquarters and include representatives from NYSE, Nasdaq, State Street, Citadel Securities, Cboe and DTCC, alongside newer market participants such as Robinhood.

A transition to continuous trading would be a major change for conventional U.S. markets, which currently operate on set schedules. Because cryptocurrency markets already run 24 hours a day, the outcome of the SEC’s discussions could also influence the regulatory environment for crypto broker-dealers.

Among the issues expected to be discussed are how regulators would oversee markets overnight, determine official closing prices and manage clearing and settlement when there is no daily shutdown. Participants will also examine the technology, maintenance and other infrastructure requirements involved in operating markets continuously.

SEC Updates Transfer-Agent Proposal

In a separate move, the SEC proposed new rules designed to account for blockchain technology and other innovations in the transfer-agent industry.

Transfer agents are responsible for maintaining records of who owns securities. The emergence of onchain settlement has challenged some of the traditional processes because blockchain networks can record ownership changes almost immediately and make those records publicly accessible. The development of tokenized securities has further increased the need to reconsider existing rules.

The proposal would update regulations that have not been substantially revised in decades. SEC Chairman Paul Atkins said the changes would recognize the use of electronic communications and blockchain technology in securities offerings and share transfers.

The proposed framework would allow blockchain records to serve as official records of securities transactions. It would also establish additional operational requirements for transfer agents, including cybersecurity measures. The SEC will accept public comments for 60 days.

SEC Commissioner Hester Peirce raised a question particularly relevant to digital-asset markets: whether transfer agents should still be required to gather investors’ names and physical addresses, or whether identifiers such as email addresses and digital wallet addresses should also qualify.

The regulatory developments come as crypto companies expand into established securities infrastructure. Bullish, the parent company of CoinDesk, recently completed plans to acquire transfer agent Equiniti in a transaction valued at $4.2 billion.