Twenty-Four Hour Trading: Corporate Actions Snafu?

With 24-hour trading on US exchanges closer to becoming a reality, back-office operations managers at some US broker-dealers are starting to worry about possible glitches processing corporate actions.

Twenty-four-hour trading doesn’t mean 24 hours literally. It only means that there will be longer after-hours trading with a short trading halt of about an hour. The regular trading hours of 9:30AM to 4:00PM EST Monday through Friday for US exchanges have not changed since 1985. However, some broker-dealers already offer longer trading hours via alternative trading systems. Blue Ocean ATS, for one, has been providing overnight trading since October 2021. Intercontinental Exchange Group, the owner of NYSE Arca, has won approval from the Securities and Exchange Commission to allow NYSE Arca to extend trading hours from 16 hours a day to 22 hours a day– from 1:30AM EST to 11:30PM EST, five days a week. Currently, NYSE Arca operates from 4:00AM EST to 8:00 PM EST while traditional NYSE trading occurs between 9:30AM EST and 4:00 PM EST. Nasdaq has also said that pending regulatory approval it would offer 24-hour trading in the second half of 2026.

The extended trading hours will give traders and investors, particularly in Asia-Pacific, the benefit of on-demand access to US exchanges. Liquidity management, wider spreads, market manipulation, and risk management top the list of possible ramifications. However, processing corporate actions is quickly coming to the forefront as a potential problem. The corporate action can be anything as simple as a mandatory dividend payment, stock split, or reverse split to as complicated as a merger or tender offer requiring investor approval. Depository Trust & Clearing Corp., (DTCC) the US market infrastructure for processing US securities transactions, says that it processes 3.5 million corporate action announcements each year.

“A one-hour halt in trading time each day won’t be enough time under a 24-hour period to correctly process corporate actions,” says Adam Cohn, director of trading operations in Chicago for TradeStation, an online trading system. Cohn’s stance is shared by numerous other industry experts. “The crux of industry concern about corporate actions under a 24-hour trading period is whether financial firms will have the right information about the corporate action and whether they will know who is entitled to the corporate action on the effective date,” explains Chris Nobles, division executive for Mediant, the shareholder communications business of New York-based wealth management technology firm BetaNXT.

Delayed or incorrect information about a corporate action can create a time-consuming and costly clean-up process. Not booking the corporate action correctly might result in the wrong investor receiving the entitlement. Such a mistake might occur if the effective date of a corporate action takes place between the time a security is bought or sold and the time the trade is settled. Not booking a corporate action correctly in an investor’s account could cause its portfolio to be misreported and misvalued. As a result, a broker-dealer might have to change its records, to file a claim for the right investor to receive the benefit of the corporate action, and to revalue a portfolio. The reconciliation of front and back-office books and records for securities transactions is the same for mandatory and voluntary corporate actions because investors must receive the correct entitlement. The key difference is that voluntary corporate actions require client instructions to be processed by a certain deadline, which cannot be missed. Regardless of the cause of the processing snafu, investors must be made whole.

Back-office managers at ten East Coast brokerage firms who spoke to FinOps Report on condition of anonymity confirmed the industry’s concern about potential glitches involving corporate actions under a 24-hour trading timeframe. Three out of the five managers say they will transfer employees from other operations departments to work in the corporate actions units for the first few months after 24-hour trading at the major exchanges takes effect. The others are hopeful they can add staff permanently. Their goal will be to reconcile books and records, which means matching up the trades executed with the trades settled on time or not, and the owners of a security on the record and effective dates of its corporate action. The record date refers to the date in which an investor must own shares to receive the benefit of a corporate action while the effective date refers to the day on which it occurs.

Alternative trading systems have devised a way to help broker-dealers deal with corporate actions when conducting after-hours trading, but it is doubtful that exchanges would take the same approach. At least that’s what corporate actions managers who spoke with FinOps Report believe. “Alternative trading systems such as Blue Ocean ATS offer a long trading break to accommodate corporate actions,” says Brian Hyndman, chief executive of Blue Ocean Technologies, parent of Blue Ocean ATS (BEATS) in New York. “If Blue Ocean begins trading at 8:00 on a Monday night and there is a corporate action ready to take place the next day, Blue Ocean will halt trading in the stock on Monday night and not trade the stock the following evening.” Broker-dealers executing orders through BEATS agree to that stipulation.

Nasdaq officials did not return calls seeking comment, but in an article published in June on its website the exchange explains that US listing exchanges currently handle corporate actions outside of market hours and must establish a plan for processing corporate actions during 24-hour trading before exchanges can implement the extended trading hours. In an article published in March 2025 on its website, upstart US equities and options exchange operator MEMX raises the issue of possible operational glitches with corporate actions under a 24-hour trading scenario. “The process involves cobbling together out-of-band files in differing formats from each of the listing exchanges and their attempting to validate the result against other non-authoritative sources such as third-party market data providers,” writes the exchange operator. “Symbology issues are typically resolved in the early morning hours during maintenance periods which are prior to the start of pre-market trading.” Such a maintenance period, says MEMX, would be shrunk in 24-hour trading significantly increasing the risk of operational issues making their way into a production trading environment.

The MEMX submitted two requests to the Securities Information Processors — one of which was for the SIPs to give the “single source of truth” for US equities symbol information at the start of each trading day. If approved by the SIP operating committee that “single source of truth” would include symbol directory messages, which would include information on corporate actions. The second request was for the SIPs to implement new halt reason codes for stock splits, reverse splits, and symbol changes. US equities exchanges cannot run on a 24-hour basis unless the SIPs are up and running for more hours because the SIPs handle collecting and sending market data from the major exchanges to member firms. Under Reg NMS, that data is used to calculate the best bid and offer which stands for the highest bid and lowest offer price for a security across all exchanges and liquidity providers.  The SIP committees (SIPs) are made up of 20 medallions held by all the exchanges across US equity markets. The Consolidated Tape Association (CTA) oversees securities information from the NYSE and Chicago Board Options Exchange, while the Unlisted Trading Privileges Plan (UTP) is in charge of the data from Nasdaq and the over-the-counter market.

Apparently, MEMX’s requests have been approved by the operating committees of the SIPs which recently announced in a statement that they will ask the SEC to extend the operating hours of the SIPs to as close as 24 hours a day as possible.  Instead of the current timetable of 9:30 AM EST to 4:00 PM EST five days a week, the SIPs would run from 8:00PM EST on Sunday through 8:00 PM EST on Friday with a “technical pause” each day to process corporate actions.  The technical pause would start at 8:00 PM EST and end at 9:00 PM EST.  If the hours for the SIPs had not been extended, broker-dealers would be forced to pay for proprietary data feeds to participate in the market, according to the Washington, DC.-based Securities Industry and Financial Markets Association (SIFMA). The broker-dealer trade group advocated an extension of SIPs operating hours in its letters to the SEC discussing 24-hour trading. A spokeswoman for MEMX would not comment beyond saying that it was pleased the SIPs agreed to extend their operating hours.

Extending processing hours on the SIPs would solve one of the potential problems for corporate actions processing under a 24-hour timetable. Broker-dealers would obtain the right information. DTCC also says its clearinghouse subsidiary National Securities Clearing Corp. (NSCC) will offer 24-hour a day clearing in the second half of 2026.  The first phase of NSCC’s new extended operating hours occurred in September 2024 when it allowed market centers and trading platforms to submit trades at 1:30 AM EST, about 2.5 hours earlier than previously. The second phase will occur by the second quarter of 2026 when NSCC operates on a 24-by-5 schedule from Sunday at 8PM EST to Friday and 8PM EST.

The SIPs declined to comment for this article beyond confirming their application with the SEC. The ICE and NASDAQ did not return calls or emails seeking comment. The DTCC referred FinOps Report to its press release related to proposed changes at the NSCC to accommodate 24-hour clearing in the second half of 2026, pending regulatory approval. SIFMA did not respond to requests seeking comment, but in a June article posted on its website, the trade group says that the SIPs’ announcement about seeking new operating hours is consistent with the recommendations SIFMA and its members made for US equity exchanges to operate 23 hours a day, five days a week. The trade date would end on each day at 8:00 PM EST so that any trade executed between 8:00 PM EST and midnight on a Monday would have a Tuesday trade date and a Wednesday settlement date.  SIFMA suggests that with the US securities industry agreeing on these baselines it can work on other pressing issues related to 24-hour trading, such as corporate actions, which would require “standardization in treatment and record dates.”

One can only presume that the exchanges, SIPs, and NSCC will increase their processing capacities and iron out any computer bugs to ensure a seamless transition to 24-hour trading. However, corporate actions managers at some US broker-dealers say they will prepare for a worst-case scenario which includes mistaken or delayed corporate actions data, settlement fails, and recordkeeping mistakes. “Adding operating hours for SIPs and for clearing won’t be sufficient to address corporate actions processing under a shortened timetable,” says Hyndman. Hopefully, corporate actions processing will be solved before the new normal takes place so there won’t be even more disgruntled operations managers struggling to fix avoidable mistakes for even more disgruntled investors who will want to be compensated for any financial losses. In its article, SIFMA says that it has a working group focused on addressing how corporate actions should be processed under a 24-hour trading scenario.