During the past month, there have been significant developments in the capital markets industry as it relates to around-the-clock trading, regulatory reporting, product diversification and further globalization of our financial markets. Nasdaq’s announcement to introduce 24-hour trading on its U.S. exchange, the U.S. Securities and Exchange Commission downsizing, Robinhood’s launch of additional advisory and banking services and the launch of a new clearing service for European securities transactions are some of the changes reshaping the global landscape.
Here’s a high-level look at some of the trends in the sector in March:
Around-the-clock trading
Last month, we saw more organizations looking to offer longer trading windows to their customers. Nasdaq announced its plans to introduce 24-hour trading on its U.S.-based exchange. This extension of trading hours will allow traders across the globe to transact U.S.-based equities during their respective business hours throughout the day. The change is expected to go into effect during the second half of 2026 and is currently pending regulatory approval. It is expected that other exchanges will follow in suit and extend their trading hours, as now both Nasdaq and the New York Stock Exchange’s Arca have filed extensions. Large brokerages will likely follow as well to align with the proposed 24-hour trading model.
Read more: Could near-24-hour trading be the future? A look at capital markets implications
Regulatory reporting
From a regulatory perspective, the SEC is experiencing a significant exit of hundreds of employees as they look to accept buyouts as a part of the current administration’s efforts to downsize various areas of the federal workforce. In March, news outlets reported that over 600 SEC employees “have agreed to leave the SEC,” including senior staff and enforcement lawyers. This equates to more than 12% of the SEC staff. This downsizing may impact the SEC’s enforcement capabilities and may pose operational disruptions such as delays in decision-making, regulatory examinations and implementation of new rules and regulations.
Product diversification
Robinhood is continuing to look to diversify its product offerings for retail investor customers, a signal that the organization may be looking to become a full-service financial services provider. Robinhood will now offer a wealth management service, Robinhood Strategies, where investors can receive tailored portfolios and financial advice for a 0.25% annual fee, capped at $250 for subscribers at a certain level. Furthermore, it will offer private banking services at a 4% annual percentage yield for savings accounts. These private banking services will include, but are not limited to, checkbooks, bill payments, and international money transfers.
We expect this diversification trend may continue as more firms aim to become more of a one-stop shop for customers.
Globalization
At the end of March, a leading options exchange and clearinghouse launched a clearing service that aims to streamline clearing for transactions involving European stocks and exchange-traded funds. The service provides a centralized clearing system, making the process for borrowing and lending securities more secure and efficient. Large financial institutions are already using the clearing service. Since this service makes securities lending and borrowing easier and safer, it is expected to boost the European market for these types of transactions. It also allows investors in Europe to deploy their capital more efficiently, as they now will have access to lend and borrow securities safely, as facilitated by the third-party clearinghouse.
The takeaway
As shown by last month’s trends, our markets are becoming more efficient and accessible on a global scale. Though the SEC downsizing may pose some industry-wide challenges and delays in regulatory decision-making, the other developments may increase market liquidity, diversification and transparency, further encouraging investor participation.
