It is clear that the 24-hour continuous trading session will be the only trading session in the equities market in the future. Global market-moving news does not wait for regulated trading to be in session to emerge. The biggest market in the world cannot sleep when information needs to be converted to prices. While 24-hour trading is a certainty, the regulatory guardrails are not so certain.

Trading outside of regular session, especially the overnight session, displays thin liquidity, wide spreads, and high volatility. In my view, these are early-stage features of a market where technology and regulators have not yet arrived.

What kind of regulations promote the creation of a market that is efficient and trustworthy? There will be many aspects of regulation, but the central piece regulators can rely on is the trusted Best Execution. I believe that Regulation National Market System (Reg NMS), which is in play during the regular trading session (9:30 AM to 4:00 PM), is inadequate to earn the trust in a 24-hour trading world.

Regulators need to upgrade the definition of Best Execution. In my view, Best Execution for the markets of the future should be:

• 1) An effort is made to ensure no better-priced quote in the market is ignored.
• 2) Taking this a step further, markets will become more trustworthy if an effort is made to ensure no “intention” to create a better price is ignored.

Don’t let concerns about regulatory complexity overshadow this vision. By challenging the status quo around the idea of Best Execution, supported by entrenched players, I want to uncover the truth: technology is ready to deliver efficient, cost-effective solutions. More than that, it promises a market built on trust—a value beyond measure.

It is easy to understand my proposal in the context of a broker handling customer orders. What is not easily visible is the implication this thought has on a marketplace (exchange or an ATS).

The US is the land where innovation thrives. There are practically no entry barriers to a bright idea delivering value to a consumer. Consequently, the US equities landscape has fragmented over the years, and marketplaces have proliferated. Each marketplace competes based on price, the differentiated execution it delivers, or some other basis of competition. Many execution venues provide quantification of the execution value they deliver. So, my argument is not against these venues or their sophisticated matching algorithms.

What I am positing is a situation where you have a marketplace that delivers quantifiable execution value through a matching algorithm but additionally works under the fundamental guiding principle of Best Execution that I proposed. A marketplace so unconflicted in character that it does not favor the attached matching algorithm and has technology and intelligence to toil on behalf of the customer to deliver better outcomes if they exist in external marketplaces.

Do I believe such a marketplace will show up in the US market? I strongly believe so. Why do I think so? Because I think that in the 24-hour trading space, an organic, free-market-generated solution will arrive well before regulators figure out what is good for the participants. Does it pass the test of industrial logic? Yes, it will make lots of duplicative capital and costs unnecessary for most brokers. Why will it succeed? Because it offers the biggest differentiator ever available to be deployed— “Trust.”