The Depository Trust & Clearing Corporation (DTCC) has launched an industry-wide testing phase for 24/5 trading.
The development comes in light of the US equities markets’ preparations to shift to extended trading hours in the coming months and years.
In addition, the NSCC transition to a 24/5 model is also expected to align with similar plans to move towards near-continuous trading recently announced by several exchanges.
In October 2024, the New York Stock Exchange (NYSE) proposed plans to expand weekday trading to 22 hours a day, while both Cboe and Nasdaq announced intentions to move to a 24/5 model in early 2025.
Following on from this, many national exchanges are expected to complete this transition towards near-continuous trading between late 2026 and 2027, according to the DTCC.
The DTCC’s testing phase is expected to support the National Securities Clearing Corporation’s (NSCC) move to extended clearing hours, in line with its 24/5 initiative – currently scheduled to come into effect on 28 June 2026.
As part of this phase, all firms which receive Universal Trade Capture (UTC) real-time output messages must participate in testing, while similarly, sending entities submitting trades during extended hours must complete testing to ensure they are prepared for 24/5 processing standards and end-of-day balancing.
Specifically, the proposed 24/5 model, which is subject to regulatory approval, will allow the NSCC to apply its central counterparty (CCP) guarantee to overnight transactions, operating from 8pm ET on Sunday to Friday 8pm ET.
Read more – An un-unified approach to expanding equities trading hours
Val Wotton, managing director and global head of equities solutions, DTCC, said: “The transition to 24/5 trading represents a structural evolution for the industry – but it also introduces new operational and risk considerations.
“Testing ensures firms are ready to process trades seamlessly during overnight sessions, maintain robust risk controls, and support resiliency. […] DTCC is fully prepared to support the industry throughout this process and continues to collaborate closely with market participants, regulators, and exchanges to ensure readiness.”
The launch of the phase marks a development of the NSCC roadmap towards a 24/5 model, and in September 2024, the firm opened up its UTC system, to allow trading platforms to submit trades at 1.30am ET, two and a half hours earlier than operating time.
Read more – Nasdaq files SEC proposal for 23/5 US equities trading
The transition to overnight trading hours follows increasing discourse around the topic across the industry, with a recent DTCC report revealing that most of the market participants surveyed anticipate 1-10% of total equity volume to shift to overnight sessions by 2028.
By supporting these changes across the industry, the NSCC’s transition is expected to ensure seamless processing and mitigate counterparty exposure across time zones.
Moreover, the DTCC has confirmed that clearing and settlement process will continue to complement the accelerated T+1 settlement cycle adopted across the US in May 2024.