Juneteenth faces a difficult road to becoming a federal and possible market holiday

Formal recognition of Juneteenth, a day commemorating the end of slavery in the United States, is gaining traction in corporate America, with a growing number of businesses and states acknowledging the holiday.

But the day faces a difficult road to becoming a federal holiday and a possibly even longer road to becoming a holiday for the financial markets, if history is any guide.

Twitter, Target, Nike and the NFL are among the entities closing offices, giving employees a paid day off or providing holiday pay. JPMorgan Chase and PNC will close bank branches early. This week, the governors of Virginia and New York have announced their plans to put forth legislation to make it an official state holiday.

A bipartisan group of legislators are working on bills to make it a federal holiday, including Republican Sen. John Cornyn and Democratic Rep. Sheila-Jackson Lee, both of Texas. Additionally, California Democratic Sen. Kamala Harris says she will put forth similar legislation, along with Sens. Cory Booker, D-N.J., Tina Smith, D-Minn., and Ed Markey, D-Mass.

Widespread recognition of Juneteenth comes in the wake of nationwide protests against systemic racism following the deaths of several Black Americans at the hands of police, including George Floyd, Breonna Taylor and Rayshard Brooks.

The holiday itself, a portmanteau of “June” and “nineteenth,” marks June 19, 1865, the day Union Army Maj. Gen. Gordon Granger arrived in Galveston, Texas, to inform slaves there that the Civil War had ended and slavery had been abolished. The announcement came two years after the enactment of President Abraham Lincoln’s Emancipation Proclamation and a couple months after Confederate Gen. Robert E. Lee’s surrender. In the 155 years since, the day has evolved into a celebration of the abolishment of slavery, Black history and culture.

Creating a federal holiday requires an act of Congress. Even those holidays only apply to federal employees and the District of Columbia, with states left to individually decide on their own legal holidays. Juneteenth has been a state holiday in Texas since 1980.

It can take years and numerous efforts to create a federal holiday, as was the case with the nation’s newest, commemorating Dr. Martin Luther King Jr.’s birthday. Proposals for this holiday began after King’s assassination in 1968, but it wasn’t until 1983 that Congress passed a bill, which President Ronald Reagan signed into law.

Over the years, a number of legislative proposals have been put forth to create a Juneteenth federal holiday but all have fallen short. Recent presidents have acknowledged the day with statements and most states recognize Juneteenth as an official observance, at the very least.

In a statement announcing his bill, Cornyn said, “As the list of black men and women killed by police officers in custody grows, the calls for action are getting louder and louder, as they must, and as they should.”

While the creation of a new federal holiday is rare, an addition to the market closure calendar is even rarer. King’s birthday is the most recent holiday added to this list, but it didn’t happen for more than a decade after becoming a federal law. Until 1998, the day was marked with a minute of silence at noon, but trading continued.

If deciding to close for Juneteenth, the exchanges would need to formally amend their rules by adding June 19 to the list of dates trading is closed and submit those changes to the Securities and Exchange Commission, which Congress oversees. Because the change is administrative in nature, the exchanges would not need SEC approval for the amendment to take effect.

That said, the SEC can ultimately say “no.” Federal law gives it the authority to suspend rule changes if deemed necessary. If the SEC took that approach, it would need to explain the grounds for potential disapproval and offer the exchange a hearing over the proposed rule change before making the final decision.

Of the current holiday market closures, Labor Day is the second newest, added in 1887. Perhaps more than anything, the reason for how seldom holidays are added comes down to the role of exchanges in keeping markets open and capital moving in a country at the center of the global financial structure, and not in opposition to the reasons for the holidays.

In fact, the NYSE has removed more holiday closure dates in the last hundred years than it has added. Until 1953, the exchange closed all day for Lincoln’s birthday and Columbus Day. For more than 80 years, the NYSE either closed for the full day or for two minutes on Veteran’s Day, but since 2007, the holiday has been acknowledged with a two-minute moment of silence before the start of an otherwise normal trading day.

It’s worth noting, a trading holiday does not need to be a federal holiday. For example, Lincoln’s birthday has never been a federal holiday, nor has Election Day, on which the exchange closed for every year until 1968. The trading holiday on Memorial Day began before it was a federal holiday, though a similar situation is hard to imagine today. The only current market closure that isn’t also a federal holiday is Good Friday and that tradition stretches back to the exchange’s beginning, long before the SEC existed.

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