On 21 May 2026, the International Organization to Securities Commissions (IOSCO) published a Consultation Report, Regulatory Considerations and Good Practices on the Evolution of Market Liquidity During the Trading Day.

The Consultation Report analyses how liquidity is distributed throughout the trading day – including the increasing concentration of trading at the close – and examines the implications for market dynamics and liquidity profiles, the potential risks associated with evolving liquidity patterns and auction designs, as well as trading venues’ operational resilience and supervisory approaches adopted across jurisdictions. It also considers whether existing regulatory and supervisory tools remain appropriate, and whether guidance may be useful in light of current market conditions and emerging practices.

IOSCO is proposing a set of good practices intended to support regulators and trading venues in considering evolving liquidity patterns to help preserve the benefits of efficient and orderly markets.

IOSCO seeks stakeholder feedback on these proposed good practices, with a view to informing potential future IOSCO work in this area.

Good practices

The good practices are summarised as follows:

  • Assessment of intraday liquidity dynamics. Trading venues and regulators may consider continuing the assessment of the proportion of trades executed during end-of-day auctions and post-close sessions, both on a trading venue and whole market level, respectively. Regulators may consider monitoring the prevalence of mechanisms by which market participants are guaranteed execution at the closing price. Where the share of trades executed at the closing price (including in the closing auction) is rising on a particular trading venue or in a specific jurisdiction, it may be appropriate for trading venues and/or regulators to monitor and assess the underlying drivers of the trend and any potential risks.
  • Operational risk and resilience. Trading venues could consider implementing mechanisms to support fair and orderly trading that are suitable for all liquidity conditions. For example, this could include:
    • Developing business continuity and disaster recovery plans that account for the potential risks of high concentrations of liquidity. This could include, for example, performing regular stress tests that simulate scenarios where trading volumes may be higher than peak volumes (i.e. end-of-day auctions and periods of high volatility) and implementing disaster recovery measures involving targeted back-up systems.
    • Designing trading systems with sufficient capacity headroom and scalability. This could include, for example, implementing system capacity management tools.
    • Implementing robust cyber-security programmes – including within the business continuity framework – that consider any increased risks during concentrated trading periods. This could include, for example, appropriate governance arrangements, systems access, data management and storage, as well as penetration and vulnerability testing.
    • Carrying out continuous capacity monitoring and planning including, for example, real time monitoring of latency, throughput and system load.
  • Market manipulation monitoring. Trading venues may consider designing risk-based and proportionate market surveillance frameworks that account for the risks posed by intraday variations in liquidity and differences across trading phases. This could include, if appropriate:
    • Incorporating intraday liquidity metrics such as volume, bid-ask spreads, and order book depth, into their market surveillance systems. This could help trading venues effectively calibrate their real-time alerts and market oversight for different trading periods.
    • During closing auctions and on index rebalancing or derivatives expiry days, where possible, trading venues may consider the risk of cross-asset manipulation, especially between cash equity and related derivative markets.
    • Where appropriate, trading venues and regulators may consider leveraging on technological developments and data-driven frameworks and tools to help detect anomalies during periods of concentrated liquidity.
  • Volatility control mechanisms. Building on Recommendations 2 and 3 of the IOSCO report on Volatility Mechanisms, trading venues may consider:
    • Calibrating their VCMs to account for any concentrations in the liquidity of a financial instrument during different trading periods.
    • Monitoring for any significant changes in financial instruments’ liquidity dynamics, as a circumstance that may support the consideration of recalibrating VCMs.
  • Regulatory and supervisory approaches. Regulators may consider, as part of their supervisory approach, assessing how trading venues monitor and, where appropriate, respond to any risks arising from changing intraday liquidity dynamics.

Next steps

The deadline for comments on the Consultation Report is 21 August 2026.