The next Wall Street shift is already underway

Every time you buy a stock, something happens that most investors never think about. The trade confirms on your screen in seconds.

But behind it, a network of brokers, custodians, clearinghouses, and exchanges quietly gets to work, each maintaining its own records, each reconciling with the others. In U.S. equity markets, that process now takes one business day, down from two after the SEC implemented T+1 settlement in 2024.

Many in the industry think even that isn’t fast enough.

The system, designed for an era of paper certificates and phone orders, is being rethought. Digital securities, next-generation settlement systems, and modern market infrastructure are prompting exchanges, asset managers, and financial institutions to reconsider how traditional assets are issued, traded, and settled.

TheStreet spoke with four executives building at the center of that shift.

Why settlement reform matters more than extended trading hours

The loudest public conversation has focused on trading hours. Whether stock markets should stay open around the clock has become a recurring debate, especially as more retail investors follow global markets in real time. But the more consequential shift is happening after the trade is made, not during it.

Settlement determines when ownership officially changes hands and when cash moves between buyer and seller. A shorter cycle reduces the period during which either party could default, frees up capital tied up in collateral, and removes friction from cross-border investing.

Those aren’t minor efficiencies. The collateral sitting idle in traditional settlement cycles represents hundreds of billions of dollars tied up in a process that modern infrastructure could make instantaneous.

Extended hours trading already accounts for more than 11% of all U.S. equity activity, more than double its share six years ago, according to NYSE research, a sign of how much investor demand is already pressing against the boundaries of conventional market hours.

“The biggest shift won’t simply be longer trading hours; it will be continuous, more efficient settlement,” said Lynq CEO Jerald David in an interview with TheStreet.

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Achieving that requires more than software updates. It requires rebuilding the infrastructure that governs how assets and cash flow between institutions.

Harry Hwang, CEO of Flowra, told TheStreet the transformation will depend on “a robust technological foundation, real-time risk management, and global interoperability” between markets. Without that foundation, extending trading hours or adding new asset types creates new bottlenecks rather than solving existing ones.

The coordination challenge is significant. No single exchange or institution controls the full chain of a securities transaction, which means modernization requires simultaneous changes across multiple organizations that currently have little incentive to move faster than their peers.

Regulatory requirements add another layer. Changes to settlement infrastructure require sign-off from securities regulators, clearinghouses, and banking supervisors, each operating on different timelines and with different risk tolerances.

How realistic is 24/7 stock trading and what does it require?

The push to extend exchange operating hours is no longer hypothetical. NYSE, Nasdaq, Cboe, and a new exchange called 24X have all submitted proposals to operate on near-24-hour schedules, with the SEC granting preliminary approval to several, according to SIFMA.

Demand from investors in Asia-Pacific markets who want access to U.S. equities during their local business hours has been a significant driver.

But the operational reality is more complicated. Liquidity in financial markets isn’t constant. It concentrates when buyers and sellers show up at the same time, which is part of what defined trading hours actually do.

Spread that pool across every hour of the week, and the result is thinner order books and wider spreads, particularly during off-peak sessions. That tends to hurt the retail investors extended hours are supposed to help most.

“Technically, 24/7 markets are a solved problem,” said Ultan Miller, co-founder and CEO of Hecto. “The hard part is not the technology; it is the market structure around it.”

There’s also a sequencing argument. Frank Hepworth, founder and CEO of New Market Trading, spent years advising exchanges as a lawyer and thinks the industry is solving the wrong problem first. “Twenty-four-seven hours bolted onto delayed settlement is a half measure,” he said while speaking to TheStreet. “Instant settlement is the unlock.”

The databases maintained by brokers, custodians, clearinghouses, and exchanges all need time to reconcile with each other after market close. Fix that, and around-the-clock trading follows naturally.

The parts of this transformation that are easiest to track — new listings, extended hours, and regulatory approvals — are not the most consequential.

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The financial market infrastructure being rebuilt behind the scenes

The parts of this transformation that are easiest to track — new listings, extended hours, and regulatory approvals — are not the most consequential. The more significant work is happening in the infrastructure that makes every trade possible.

Private markets are where the need is most acute. The number of private companies valued at more than $1 billion has grown from 280 in 2017 to more than 1,500 by 2025, according to Bloomberg Intelligence, while the number of publicly listed U.S. companies has fallen to roughly half its 1990s peak.

More value creation is now happening in private markets before companies go public, yet private asset transactions still run largely on manual processes, fragmented records, and informal price discovery. Institutional investors who want exposure to that growth often struggle to access it, and those who do frequently face transfers that take weeks and valuations that are difficult to verify.

Miller described the opportunity in blunt terms. “The wall between public and private markets gets a lot thinner” as digital issuance and verified transfer replace the manual systems that currently make private assets difficult to trade, he explained.

That shift matters for a broad range of investors. Pension funds, endowments, and family offices have been increasing allocations to private assets precisely because public markets offer a smaller and smaller slice of the overall economy.

Better infrastructure for private transactions, in addition to improving price transparency, could reduce the minimum investment sizes and holding periods that currently make these markets difficult for all but the largest institutions to navigate.

The reason those manual systems still exist is worth understanding. Hepworth put it plainly after years of watching exchanges try to modernize: “Why do markets close at 4 p.m.? So those databases can catch up with each other overnight.”

Every link in the transaction chain, from advisor to custodian to broker to exchange, maintains its own record of what happened. The systems then spend the hours after market close reconciling. When assets exist on shared infrastructure instead, that process largely disappears.

Investors naturally focus on the most visible part of any transformation: new products, new asset types, new platforms. But the settlement infrastructure sitting underneath those products is what determines whether any of them can function at institutional scale.

When that layer improves, every financial instrument built on top of it becomes more efficient. “Extending trading hours without modernizing how assets and cash move simply shifts the bottleneck,” said David.

What investors should watch as AI, private markets reshape the infrastructure

The modernization effort is also opening new questions about how markets will operate as they become more digital. Artificial intelligence has already taken on a significant role in fraud detection and risk management at major financial institutions.

Regulators are watching how these systems make decisions, whether they can explain themselves, and whether their outputs could create new forms of systemic risk. As financial infrastructure becomes more data-rich, those applications are expected to expand into market surveillance, liquidity management, and eventually trade execution itself.

“AI will automate routine tasks, predict market trends, and enhance decision-making capabilities,” said Hwang, though he was careful to note that “challenges such as explainable AI and regulatory oversight” will need to be addressed before those capabilities can operate at scale in regulated markets.

Regulatory frameworks, interoperability standards, and institutional adoption timelines will all shape how quickly any of this becomes routine. The transformation is unlikely to happen all at once, and many of its effects may not become visible to everyday investors for years.

That has always been true of infrastructure changes. The shift to electronic trading reshaped who the intermediaries were, what a spread was worth, and who could participate in markets.

It happened gradually, then quickly, and most investors didn’t notice until it was done. The next shift in market plumbing looks like it’s following the same pattern.