WFE Urges Careful Approach to Extended Trading Hours

The World Federation of Exchanges (WFE) has published a policy paper cautioning against the immediate adoption of 24/7 securities trading, despite growing technological capability and investor demand.

The paper, Policy and Market Impacts of Extended Trading, concludes that while around-the-clock markets are "technologically feasible and in some cases align with investor demand," they are "not inevitable nor universally desirable."

Key challenges identified include maintaining liquidity in off-peak hours, ensuring robust risk management, and upgrading post-trade infrastructure to handle continuous flows of data. Exchanges, clearing houses, and brokers would need to invest in systems capable of high availability, real-time surveillance, and round-the-clock supervisory frameworks.

Rather than jumping directly to full-time markets, the WFE recommends a phased approach, such as moving first to a 22/5 or 23/5 model. This would give participants time to adapt while testing market resilience.

CEO Nandini Sukumar emphasized that the report should be seen as a framework rather than a prescription. "The shift to extended trading is technologically feasible and already aligned with investor behaviour in other asset classes," she said. "The real question is how markets evolve in a way that protects investors, supports integrity, and strengthens global competitiveness."

Sukumar stressed that any changes must be "ecosystem-wide, coordinated across custodians, settlement banks, brokers, and regulators" to ensure systemic stability.

While tokenization and digital assets are already pushing parts of the financial system toward continuous trading, the WFE's stance suggests that equity markets may move more cautiously.