“I believe that tokenization holds the potential to help the securities industry achieve a real-time inventory management, which could drive efficiency, reduce settlement failures, mitigate the risk of abusive naked short selling, with the goal of eliminating that possibility altogether,” Atkins said. “Therefore, I’ve asked the staff to consider what steps can be taken to dovetail a growth-friendly environment with protections against harmful market behavior.”
Moving the U.S. securities markets beyond their weekday, daytime tradition will involve significant adjustments, Atkins and other SEC commissioners admitted, though Commissioner Hester Peirce noted, “Crypto markets certainly don’t sleep.”
Peirce said that firms may be concerned that expanding their trading hours may contribute to wider spreads, increased volatility of prices, less time to deal with technology issues and making sure the transactions are properly monitored.
“These concerns are the real consequences of extending trading into hours when human involvement is limited,” Peirce said, adding that companies may also be worried about overnight drama such as “social media rumors tanking your stock while your corporate office slumbers.”
But the SEC is steaming toward the expansion, and Atkins said that “several needed preparations are already underway or in place.”