COMPETING IN A 24/7 WORLD

What UK and Other Non-US Financial and Asset Management Firms Must Do to Stay Competitive as US Markets Move to Continuous and Tokenised Trading

A Compliance and Risk Briefing

Executive Summary

US exchanges are moving decisively towards continuous trading. Nasdaq, NYSE Arca and Cboe have each sought or secured regulatory approval to extend equity trading towards a 23/5 or 24/5 model, with Nasdaq targeting launch in the second half of 2026, and cryptocurrency futures at CME Group are moving towards genuine 24/7 operation. The rationale is explicit: US exchanges want to capture the growing pool of international investors trading US equities outside standard US hours, and to compete with crypto native and tokenised trading platforms that already operate around the clock. The debate has now moved from individual exchange announcements into formal US regulatory process: the Securities and Exchange Commission has scheduled a public roundtable for 17 September 2026, chaired by SEC Chairman Paul S. Atkins, to examine the operational, structural and regulatory implications of a shift to continuous equity trading.

This creates a direct competitive question for the London Stock Exchange Group, other European exchanges, and UK and European asset managers, banks and brokers more broadly. If US markets are open when UK and European investors are awake and UK and European markets are not, order flow, liquidity and ultimately listings risk migrating towards US and US-linked venues. LSEG has confirmed it will keep considering a shift towards 24-hour trading, while flagging a host of unresolved issues around corporate news releases, valuation, clearing, settlement, technology and staffing. Deutsche Börse has already acted, extending Xetra retail trading to 8am to 10pm CET from December 2025 specifically to let European retail investors respond to US market moves before the US close. Robinhood has begun offering European investors 24-hour weekday trading in tokenised versions of US stocks and ETFs, taking the competitive threat directly into the European retail investor's pocket.

A separate and potentially more structurally significant development is under way alongside the roundtable. The SEC is preparing an “innovation exemption” that would, for the first time, allow tokenised US equities to trade on blockchain networks around the clock rather than within conventional exchange hours. The Commission has already granted exemptive relief for 24/7 trading and instant settlement of a tokenised money market fund, Nasdaq and NYSE have secured approval to trade tokenised versions of major indices, and the Depository Trust and Clearing Corporation is running a production pilot with more than fifty institutions. The exemption's rollout was paused in May 2026 after exchange leadership raised price discovery concerns, but the policy direction under Chairman Atkins' Project Crypto agenda remains clear.

At the same time, UK and EU authorities are running two other structural changes in parallel: the move to T+1 settlement on 11 October 2027, and a deliberate push towards tokenisation of wholesale markets through the FCA and Bank of England's Digital Securities Sandbox, the Digital Gilt Instrument pilot, and the FCA's fund tokenisation policy statement. Non-US firms therefore face a four-front challenge: matching or responding to extended US trading hours, delivering a shorter settlement cycle with less operational slack, deciding how far and how fast to embrace tokenised market infrastructure as an alternative route to round-the-clock access, and preparing for the possibility that US equities themselves migrate onto tokenised, always-on rails under the SEC's emerging innovation exemption. This briefing sets out what UK and other non-US financial and asset management firms need to do across each front to remain competitive.

1. The Competitive Pressure Firms Are Facing

1.1 US Exchanges Are Extending Hours to Capture Non-US Demand

Nasdaq has stated publicly that its move towards near round-the-clock trading is driven by surging global demand for US equities, fuelled by rising retail participation and easier access to digital trading platforms outside the US, and has filed for regulatory approval to launch in the second half of 2026, initially as a 23/5 model with a night session starting Sunday at 9pm Eastern Time. Cboe has announced its own intention to expand US equities trading to a 24-hour, five-day format, and NYSE Arca has separately sought and secured approval to extend its own hours. The explicit purpose of these moves, in Nasdaq president Tal Cohen's own words, is to broaden investor access for those operating across different time zones, which places UK and European investors, and the platforms that serve them, squarely in scope.

CME Group's parallel push towards genuinely continuous trading in cryptocurrency futures signals that this is not confined to cash equities. Once US derivatives markets also move towards round-the-clock operation, UK and European institutions trading US futures and using them for hedging will face the same overnight risk and operational questions as their US counterparts, without necessarily having the domestic market infrastructure or staffing model to support it.

1.2 European Venues Are Responding, But Unevenly

The response among UK and European exchanges has been mixed rather than uniform. Deutsche Börse extended Xetra trading hours for retail investors to run from 8am to 10pm CET from 1 December 2025, a fourteen-hour session explicitly designed to let European retail investors react to US market developments before the US close, and to compete for the growing volume of retail trading happening after the European working day. London Stock Exchange Group has said it will continue to consider a shift towards 24-hour trading in discussions with market participants, regulators and policymakers, but its own leadership has been candid that a host of issues, including corporate news releases, stock valuation, clearing, settlement, technology and staffing, would need to be resolved first. That caution is understandable, but it also means LSEG risks moving more slowly than both US exchanges and retail-focused trading platforms.

The competitive pressure is not limited to regulated exchanges. Robinhood has begun offering European investors 24-hour weekday trading in tokenised versions of US stocks and ETFs, and Blue Ocean Technologies operates an alternative trading system built specifically for out-of-hours access to US markets. These platforms give retail and increasingly institutional investors a route to continuous US market access that does not depend on European exchanges extending their own hours at all, which is itself a competitive threat to UK and European venues, brokers and asset managers that do not offer an equivalent.

1.3 Two Further Structural Changes Are Arriving on a Similar Timetable

UK and European firms cannot consider their response to US extended hours in isolation, because two other significant changes are under way on broadly the same horizon.

•        Accelerated settlement: The UK, EU and Switzerland have each committed to move from T+2 to T+1 securities settlement on 11 October 2027, following the US transition to T+1 in May 2024. The UK Accelerated Settlement Taskforce has published a code of conduct with twelve critical and twenty-seven highly recommended actions, and the FCA has stated that firms are expected to complete system and process changes and be ready to test them by the end of 2026, warning it may take action against firms that are not prepared for the 2027 deadline.

•        Tokenisation: The FCA and Bank of England published a joint call for input in May 2026 setting out a shared vision for tokenisation across UK wholesale financial markets, alongside the FCA's April 2026 policy statement PS26/7 finalising rules for tokenised authorised funds. The Bank and FCA are working with sixteen firms on live issuance and settlement of tokenised assets through the Digital Securities Sandbox, HM Treasury has awarded HSBC the tender to deliver its pilot Digital Gilt Instrument, and the Bank has committed to a live asset synchronisation service targeted for 2028.

Taken together, these initiatives mean UK and European firms are being asked to compress settlement timelines, extend trading availability and adopt new tokenised market infrastructure within roughly the same two to three year window. Firms that plan for these changes separately risk duplicating technology investment, or worse, building solutions for one that constrain their options for the others.

1.4 The SEC Has Moved From Principle to Formal Process

The debate has now moved from exchange-level announcements into formal regulatory process. The SEC has scheduled a public roundtable for 17 September 2026 at its Washington, D.C. headquarters, chaired by SEC Chairman Paul S. Atkins, bringing together market infrastructure operators, clearinghouses, broker-dealers and institutional investors to examine the operational, structural and regulatory shifts involved in moving US equity markets towards continuous, 24-hour trading. The Commission has framed the exercise as preparing US equity markets for a new paradigm in which they align with global commodities, foreign exchange and digital asset markets that already operate continuously.

The roundtable's stated scope covers three areas UK and European firms should track closely. On infrastructure and settlement, exchanges including the 24X National Exchange, NYSE and Nasdaq have already set out roadmaps for overnight trading windows, and the Depository Trust & Clearing Corporation, through its National Securities Clearing Corporation division, has deployed continuous clearing capability intended to provide central counterparty guarantees and manage credit and counterparty risk outside standard hours; the SEC will examine how clearinghouses, custodian banks and brokerages can handle continuous margin requirements, overnight settlement and automated risk management without triggering system freezes or liquidity bottlenecks across overlapping global time zones. On market quality and retail protection, the Commission has acknowledged that overnight sessions typically see materially lower volume, thinner order books and wider spreads than the primary session, and intends to consult on circuit breakers, price collars and order-routing standards to manage volatility and execution risk for retail investors trading out of hours. On competitive positioning, the SEC has been explicit that a principal motivation is capturing international capital, noting that investors in Asia and Europe currently face time-zone frictions trading US equities directly and often rely on derivatives or less liquid alternative venues instead, and that extending US hours is intended to keep regulated, traditional US venues, rather than tokenised alternatives, as the primary destination for that capital as tokenised real-world assets gain traction.

For UK and European firms, the roundtable is a signal that the timetable this briefing describes is no longer purely exchange-driven speculation. A formal SEC process with a fixed date gives the debate a regulatory anchor, and is likely to produce clearer signals on execution standards, clearing arrangements and retail protections that UK and EU regulators, and firms serving cross-border clients, will need to factor into their own planning well before any US venue actually launches continuous trading.

1.5 A Parallel and More Radical Track: the SEC's Innovation Exemption for Tokenised Equities

Alongside the roundtable, the SEC is developing a more structurally radical initiative: an innovation exemption that would allow tokenised versions of listed US equities to trade on blockchain networks around the clock, outside the exchange hours that still govern conventional trading. The initiative sits at the centre of Chairman Atkins' Project Crypto agenda and marks the most consequential attempt yet to bring the fast-growing offshore market in tokenised equities inside the US regulatory perimeter. SEC Commissioner Hester Peirce indicated in March 2026 that agency staff were developing an exemption to facilitate the limited trading of certain tokenised securities, while flagging a series of unresolved questions, including how atomic settlement should work, what intermediary obligations should apply, how investors would be protected outside normal market hours, and whether third parties ought to require an issuer's consent before wrapping its shares in tokenised form.

The Commission has already shown that round-the-clock securities trading is compatible with its rulebook, having granted exemptive relief earlier in 2026 for 24/7 trading and instant settlement of tokenised shares in a money market fund. The infrastructure to extend this logic to listed equities is already being built: Nasdaq secured SEC approval in March 2026 to trade tokenised versions of Russell 1000 constituents and major index ETFs, NYSE followed with its own approval the following month, and the Depository Trust and Clearing Corporation, which custodies roughly 114 trillion US dollars in assets, has launched a limited production pilot involving more than fifty institutions, including BlackRock, JPMorgan and Goldman Sachs, with a broader rollout planned for October 2026. What is emerging, in effect, is not one onshore tokenisation rail but two: a Nasdaq and DTCC rail that wraps a conventional, already settled position and preserves full shareholder rights, and a lighter-touch innovation exemption rail on which crypto-native platforms could list tokenised exposure to public companies, in some cases without the issuer's consent and without the full shareholder rights, including voting and dividends, that attach to the underlying stock.

The exemption has not, in fact, arrived on the timetable the market expected. A draft was reportedly reviewed by SEC staff in mid-May 2026, with publication expected within days, before the Commission paused the planned rollout after Nasdaq, NYSE and Cboe leadership raised market structure and surveillance concerns directly with the agency. Chief among them was a price discovery problem: listed equities trade for roughly six and a half hours a day, leaving as much as sixteen hours during which no reference price would be available on the primary listed market against which an off-hours tokenised trade could be checked. For UK and non-US firms, the practical lesson is that the policy direction is settled, but the operational detail, particularly around price discovery, surveillance and investor protection outside exchange hours, remains under active negotiation between the Commission and the incumbent exchanges. The current pause is best treated as a planning window rather than a reason to stand down.

2. Why This Matters for UK Competitiveness

The UK remains one of the world's leading investment management centres, with assets under management the FCA itself has put in the trillions of pounds, and one of the top three wholesale trading centres globally. That position is not guaranteed. If international and increasingly domestic UK retail investors can access continuous, well-served US markets more easily than they can access UK and European markets during the hours that matter to them, capital, order flow and eventually listings activity will gravitate towards the deeper, more accessible market. The FCA and Bank of England have themselves framed tokenisation explicitly as a competitiveness issue, describing it as a technology where the UK can be a world leader precisely because of its existing position as a top wholesale trading centre.

The risk is not confined to trading venues. UK and European asset managers compete for the same pool of global and increasingly younger, more mobile retail capital that US brokers and exchanges are explicitly targeting with extended hours. An asset manager whose products, distribution and client service model assume a defined UK or European trading day will look increasingly dated to a client base that can already trade US-linked instruments around the clock through Robinhood, Blue Ocean or a similar platform. Competitiveness in this environment is as much about client experience and product design as it is about market microstructure.

The emergence of two competing onshore tokenisation rails in the US sharpens this risk further. If the SEC's innovation exemption produces a lighter-touch, crypto-native venue for tokenised US equities, UK and European retail and institutional investors will gain an additional, more accessible route to continuous exposure that neither requires a UK or European broker nor depends on LSEG or any other European venue extending its own hours. UK firms that wait for the exemption to be finalised before considering their own response risk ceding this ground before the regime is even settled.

3. What UK and Non-US Firms Need to Do

3.1 Trading Venues and Market Infrastructure Providers

1.     Set out a clear, published position and timetable on extended and eventually continuous trading hours, rather than leaving the question permanently open. LSEG's own acknowledgement that it will continue to consider a shift gives competitors a longer runway to capture client relationships and order flow in the meantime.

2.     Prioritise resolving the specific issues LSEG itself has identified as blockers, namely how corporate announcements, stock valuation, clearing and settlement will function outside the current trading day, since these are shared problems across the UK and European market and will need co-ordinated, not just firm-by-firm, solutions.

3.     Evaluate a phased extension of hours, following the Deutsche Börse model of a longer retail session bridging the European close and the US close, as a lower-risk interim step before considering a full 24-hour or weekend model.

4.     Engage directly with the FCA and Bank of England's tokenisation programme, including the Digital Securities Sandbox and the Digital Gilt Instrument pilot, since tokenised market infrastructure offers a credible route to round-the-clock access without requiring the same clearing, settlement and staffing model as a traditional extended-hours exchange.

5.     Track the SEC's innovation exemption alongside its 17 September roundtable, since a lighter-touch, crypto-native rail for tokenised US equities would compete directly with LSEG and other European venues for the same retail and institutional order flow that extended exchange hours are intended to capture.

3.2 Banks, Brokers and Trading Firms

6.     Assess client demand directly rather than assuming it does not exist. Retail platforms are already proving that UK and European investors will use tokenised or alternative venues to trade US markets out of hours if their existing broker does not offer a comparable service.

7.     Build out-of-hours risk, surveillance and client support capability incrementally, starting with the highest-demand instruments and time windows, such as the period bridging the European evening and the US session, rather than attempting to move to full 24/7 coverage in one step.

8.     Review market-making and liquidity provision commitments for extended-hours sessions carefully, given the evidence from US and European extended-hours trading that overnight liquidity is materially thinner and spreads wider than during the primary session, which changes the economics and the risk profile of quoting continuously.

9.     Treat the T+1 settlement deadline of 11 October 2027 as the forcing function it is intended to be. The FCA has been explicit that it expects system and process changes completed and tested by the end of 2026, and has warned it may act against firms that are not ready, so this cannot be treated as a lower priority than the trading hours question.

10.  Assess readiness to support tokenised equity execution and custody alongside extended-hours trading, given that Nasdaq, NYSE and DTCC are already piloting tokenisation infrastructure with major US institutions, and a UK or European firm without an equivalent capability may find itself excluded from client mandates that assume it.

3.3 Asset Managers

11.  Engage with the FCA's fund tokenisation regime, following PS26/7 and the direct dealing model it introduces, and assess where tokenised share classes or tokenised money market funds used as collateral could deliver operational efficiency or a genuine product differentiator for clients, rather than treating tokenisation purely as a defensive, compliance-driven exercise.

12.  Reassess dealing cut-off times, pricing points and client communication in light of both extended US trading hours and the UK's move to T+1 settlement, since clients increasingly expect the same immediacy from a fund platform that they experience from a retail trading app.

13.  Build settlement, reconciliation and collateral processes for a shorter, less forgiving settlement cycle now, using the lessons already documented from the US T+1 transition in May 2024, including the finding that data quality issues were a significant contributor to settlement failures under a compressed timeline.

14.  Consider distribution and platform partnerships with brokers or venues that already offer extended-hours access, as a faster route to meeting client demand than building proprietary continuous-trading capability from scratch.

15.  Monitor the SEC's innovation exemption for its implications on custody and shareholder rights, since a tokenised exposure created without an issuer's consent and without voting or dividend rights is a materially different product from a tokenised share class created under PS26/7, and client communications will need to distinguish clearly between the two.

3.4 Compliance, Risk and Operations Functions Across All Firms

16.  Build a single, co-ordinated programme covering extended trading hours, T+1 settlement and tokenisation together, given the overlapping technology, staffing and governance implications of each, rather than running three disconnected projects that compete for the same budget and specialist resource.

17.  Extend compliance monitoring, market abuse surveillance and trade reporting capability to match whatever hours the firm chooses to trade or support, recognising that a client able to trade at 2am UK time still needs the same standard of surveillance and best execution oversight as during the London trading day.

18.  Strengthen data quality and standard settlement instruction automation now, ahead of the T+1 deadline, since this was explicitly identified as a weak point in the US experience and the UK Accelerated Settlement Taskforce has made automation of settlement instructions one of its behavioural commitments.

19.  Establish governance for any use of tokenised infrastructure or automation, including agentic AI, in trading, settlement or client service workflows, given that UK regulators are actively shaping this regime now through the Digital Securities Sandbox and the wholesale tokenisation call for input, and early, well-governed engagement is likely to be easier than retrofitting controls later.

3.5 Firms Considering Direct Participation in Tokenised Equity Markets

Whatever final form the SEC's innovation exemption takes, the direction of travel is difficult to dispute, and firms that intend to participate in tokenised equity markets, whether as issuers, broker-dealers, custodians, exchanges or crypto-native platforms, will need to rebuild significant parts of their operating model around continuous, always-on trading. The following areas are likely to require the most substantial work.

20.  Build methodologies for constructing a fair reference price during hours when no US listed market price exists, whether by referencing offshore venues, derivatives markets or the tokenised order book itself, with clear, disclosed rules for how that reference price feeds into execution and best execution assessments.

21.  Resolve custody and reconciliation questions now, specifically how a token representing economic exposure to a share reconciles against the underlying security held at a custodian such as DTC, and how corporate actions, including dividends, stock splits and voting, are reflected in or excluded from the token.

22.  Build market-making, circuit breaker and margining arrangements that function credibly at 3am as well as 3pm, given that thin overnight liquidity is a documented weak point in both extended-hours and tokenised markets.

23.  Extend KYC, AML, suitability, disclosure and complaints handling to operate around the clock rather than during a nine-to-five compliance shift, with clear client-facing disclosure of what a tokenised instrument does and does not confer, particularly where voting rights or dividends are excluded.

24.  Test blockchain settlement rails, smart contracts and their interoperability with existing post-trade infrastructure, such as DTCC's tokenisation service, before committing meaningful volume to them, and plan for the loss of any overnight maintenance window.

25.  Assign a clear internal owner for tokenisation strategy and regulatory engagement, and participate actively in the SEC's ongoing consultation process, since the May 2026 delay shows that exchange and market participant feedback is already shaping the final framework.

4. A Practical Roadmap

The pressures described in this briefing do not need to be solved simultaneously, but they do need to be planned together. A practical sequence for most UK and non-US firms is as follows.

26.  Now to end of 2026: treat T+1 settlement readiness as the immediate priority, since the FCA has set an explicit end-2026 testing expectation ahead of the 11 October 2027 deadline. Use this work to also strengthen the real-time data quality and reconciliation capability that extended trading hours and tokenised markets will later depend on.

27.  Through 2026: define the firm's position on extended and out-of-hours trading, informed by actual client demand data rather than assumption, and begin building out-of-hours risk, surveillance and support capability incrementally for the highest-demand windows. Monitor both the outcome of the SEC's 17 September 2026 roundtable and the progress of its parallel innovation exemption for tokenised equities, since either could reshape the operational model UK and European firms will ultimately need to match, and treat the exemption's current pause as a planning window rather than a signal to deprioritise the work.

28.  Through 2026 and into 2027: engage with the FCA and Bank of England tokenisation programme in parallel, since the regulatory shape of UK wholesale tokenisation is being actively defined now, and firms that engage early are better placed to influence and adopt the eventual regime than those that wait for it to be finalised.

29.  From late 2027 onward: reassess the firm's trading hours and product offering in light of the completed T+1 transition, the maturing UK tokenisation regime and the eventual shape of the SEC's innovation exemption, since by that point it should be clearer whether tokenised infrastructure or traditional extended-hours trading, or some combination of the two, offers the more efficient route to round-the-clock client access.

Sources

This briefing draws on public statements and announcements from Nasdaq, Cboe, NYSE Arca, CME Group, London Stock Exchange Group and Deutsche Börse regarding extended and continuous trading hours; the US Securities and Exchange Commission's announcement of its 17 September 2026 public roundtable on 24-hour US stock trading and its parallel work on an innovation exemption for tokenised equities, including SEC Commissioner Hester Peirce's March 2026 remarks and the Commission's January 2026 joint divisional guidance; Nasdaq, NYSE and Depository Trust and Clearing Corporation announcements on tokenised equity trading and settlement pilots; FCA and Bank of England publications on the Digital Securities Sandbox, the Digital Gilt Instrument pilot and the joint call for input on the future of tokenisation, including FCA policy statement PS26/7; and publications from the UK Accelerated Settlement Taskforce and the FCA on the transition to T+1 settlement on 11 October 2027.

DISCLAIMER

Nothing in this report constitutes legal advice, financial advice, investment advice, or a recommendation to adopt, implement, or refrain from any particular course of action. Readers should not rely on this report as a substitute for independent legal, regulatory, tax, financial, or technical advice tailored to their specific circumstances and jurisdiction. The Digital Commonwealth (DCW) accepts no liability for any loss, damage, or consequence arising directly or indirectly from reliance on the contents of this report.

The regulatory landscape for extended trading hours, settlement reform and tokenised markets is evolving rapidly across all jurisdictions referenced herein. Whilst reasonable care has been taken to reflect the state of regulation, legislation and market practice as at August 2026, this report does not purport to be a comprehensive or definitive statement of the law or regulatory position in any jurisdiction. It may not reflect developments occurring after the date of publication. Readers operating in regulated activities should conduct their own legal and compliance review and seek appropriate professional advice.

This report is provided on a confidential basis and is intended solely for the use of the recipient(s) to whom it is addressed. It may not be reproduced, distributed, or disclosed to any third party.

Eric Williamson, Director of Compliance and Risk

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