Follow the sun trading: More trades, processing and reporting - a major data management headache

At the same time, derivatives markets activity continues to accelerate with significant year on year growth reported by various industry sources. In February 2025, ICE reported record open interest in futures and options contracts; CME also reported record trading volumes in February, primarily in interest rate futures and options.

Beyond longer (‘round the clock’) trading windows, the attractiveness of futures can be attributed to other factors including liquidity, leverage, volatility hedging and lower transaction costs (than underlying instruments).

However, with market advancements come data management and transaction processing challenges, particularly in the operational accommodation of accelerating transaction volumes and around the clock trading hours, with corresponding pressures on enterprise, client and regulatory reporting systems and workflows.

Push towards 24/7 trading

Many futures markets already operate on a 23/5 basis, allowing traders to react to global events and to hedge exposures outside of traditional trading hours. Each product has specified trading hours, however, and each contract a particular tick size and value.

Burgeoning cryptocurrency markets operate pretty much around the clock, which may also be a contributing factor influencing proposed changes in trading hours in more traditional financial markets. A number of traditional exchanges are already contemplating 24/5 (and potentially 24/7) opening hours to meet growing demand from market participants for more flexible markets access.

Nasdaq plans to introduce 24-hour trading operations from Monday to Friday starting in the second half of 2026, pending regulatory approval. Cboe is considering a similar move, responding to demand from APAC investors in particular to access US markets in ‘local’ hours, and to hedge US exposures before the US time zone.

In parallel, the move towards T+1 settlement cycles (initially for equities) is gaining momentum. The European Union, UK and Switzerland all plan to adopt T+1 by 2027, seeking to ensure that UK and European markets remain competitive and attractive to investors.

Impact on transaction volumes and regulatory reporting

Continuing acceleration in trading volumes is particularly pronounced in derivatives markets, where futures and options trading activity in particular has surged in recent years. According to industry estimates, global exchange-traded derivatives volume exceeded 82 billion contracts in 2023, up 34% from the previous year, reflecting increasing demand for hedging solutions, speculative opportunities and access to leveraged exposure.

The confluence of increased trading hours and T+1 settlement could power an exponential increase in the numbers of transactions that need to be processed and reported through internal and external workflows. Clearing houses and central counterparties (CCPs) will also face mounting pressure to process margin calls and risk assessments in near real-time,

To cope with these demands, financial institutions and firms will need to invest in beefing up trading infrastructure and resources to accommodate round the clock trading activity, and increasing transaction volumes, to avoid processing bottlenecks and reporting fails. Beyond technological investment, it is also essential that firms ensure that they are sourcing and using the best quality transaction data to ‘feed’ disparate and increasingly complex transaction processing workflows.

No amount of technology makes up for bad data

There is a lot of industry noise around the use of more advanced technologies to support trading and real-time transaction data processing: it is acknowledged that artificial intelligence (AI) and machine learning could play pivotal roles in managing large datasets, detecting anomalies, producing valuable insights and supporting reporting (and compliance).

It is a fact, however, that the effectiveness of these technologies hinges entirely on the accuracy of the underlying data that fuels them. "Garbage In, Garbage Out" is still the case, underscoring the absolute imperative for accurate, clean and quality data in the pre- to post-trade transaction lifecycle - whether informing pre-trade analytics or accurate regulatory reporting. The UK's Financial Conduct Authority (FCA) has demonstrated its commitment to stringent regulatory reporting oversight and is already issuing fines for transaction reporting failures under MiFIR. Regulatory reporting accuracy is non-negotiable - it must be done, it must be done correctly and it must be done on time - and bad data is a leading contributor to reporting fails.

As we have explored in previous blogs and will revisit shortly, by far the bulk of the data required to be reported is reference data, the very precise and detailed information that ensures that every transaction can be executed and managed through all post trade processes to internal and external reporting destinations. It may surprise market participants and commentators, but reference data makes up some 70% of all of the detailed data that is required (and mandated) to be reported under specific regimes e.g. EMIR and MiFIR), with the remaining, much smaller percentage representing market data.

As traditional financial markets evolve to a “follow the sun”, around the clock model, T+1 comes into being and derivatives markets volumes continue to rise, accurate transaction processing and in particular, regulatory reporting, will be an even bigger headache for reporting parties. Starting with good data, however, creates a very solid foundation for efficient transaction processing and effective reporting and compliance – contact us for a data sample and see just how good our data is.