Notice2026-16201
Joint Industry Plan; Order Granting Approval of the Twenty-Seventh Amendment to the National Market System Plan To Address Extraordinary Market Volatility To Establish Temporary Price Band Protections in Overnight Trading
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Published
August 10, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 152 (Monday, August 10, 2026)</title>
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[Federal Register Volume 91, Number 152 (Monday, August 10, 2026)]
[Notices]
[Pages 51515-51517]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-16201]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106042; File No. 4-631]
Joint Industry Plan; Order Granting Approval of the Twenty-
Seventh Amendment to the National Market System Plan To Address
Extraordinary Market Volatility To Establish Temporary Price Band
Protections in Overnight Trading
August 5, 2026.
I. Introduction
On May 27, 2026, Nasdaq, Inc., on behalf of the following parties
to the Plan to Address Extraordinary Market Volatility (``Plan'' or
``LULD Plan'') Pursuant to Rule 608 of Regulation NMS under the
Securities Exchange Act of 1934 (``Act'' or ``Exchange Act''): \1\ 24X
National Exchange LLC, Cboe BZX Exchange, Inc., Cboe BYX Exchange,
Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial
Industry Regulatory Authority, Inc., Investors Exchange LLC, Long-Term
Stock Exchange, Inc., MEMX LLC, MIAX PEARL, LLC, Nasdaq Texas LLC,
Nasdaq PHLX LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE
Arca, Inc., NYSE Texas, Inc., NYSE National, Inc., and The Nasdaq Stock
Market LLC (collectively, ``Participants''), filed with the Securities
and Exchange Commission (``Commission'') pursuant to Section 11A(a)(3)
of the Exchange Act \2\ and Rule 608 thereunder,\3\ a proposal to amend
the Plan (``Amendment No. 27'').\4\ Amendment No. 27 proposes to
establish phased price band protections to overnight trading
(``Overnight Protections'') in anticipation of overnight trading by
certain national securities exchanges.\5\
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\1\ See Securities Exchange Act Release Nos. 67091, 77 FR 33498
(June 6, 2012); 68953 (February 20, 2013), 78 FR 13113 (Feb. 26,
2013); 69287 (April 3, 2013), 78 FR 21483 (Apr. 10, 2013); 70273
(August 27, 2013), 78 FR 54321 (September 3, 2013); 70530 (September
26, 2013), 78 FR 60937 (October 2, 2013); 71247 (January 7, 2014),
79 FR 2204 (January 13, 2014); 71851 (April 3, 2014), 79 FR 19687
(April 9, 2014); 74323 (February 19, 2015), 80 FR 10169 (February
25, 2015); 76244 (October 22, 2015), 80 FR 66099 (October 28, 2015);
77679 (April 21, 2016), 81 FR 24908 (April 27, 2016); 78703 (August
26, 2016), 81 FR 60397 (September 1, 2016); 79845 (January 19,
2017), 82 FR 8551 (January 26, 2017); 80455 (April 13, 2017), 82 FR
18519 (April 19, 2017); 80549 (April 28, 2017), 82 FR 20928 (May 4,
2017); 81720 (September 26, 2017), 82 FR 45922 (October 2, 2017);
82887 (March 15, 2018), 83 FR 12414 (March 21, 2018); 83044 (April
12, 2018), 83 FR 17205 (April 18, 2018); 85623 (April 11, 2019), 84
FR 16086 (April 17, 2019); 88122 (February 5, 2020), 85 FR 7805
(February 11, 2020); 88704 (April 21, 2020), 85 FR 23383 (April 27,
2020); 89420 (July 29, 2020), 85 FR 46762 (August 3, 2020); 90068
(October 1, 2020), 85 FR 63322 (October 7, 2020); 101036 (September
16, 2024), 89 FR 77203 (September 20, 2024); 103042 (May 14, 2025),
90 FR 21529 (May 20, 2025); 103845 (September 3, 2025), 90 FR 43254
(September 8, 2025); and 105443 (May 12, 2026), 91 FR 27995 (May 15,
2026).
\2\ 15 U.S.C 78k-1(a)(3).
\3\ 17 CFR 242.608.
\4\ See Letter from Andrew Oppenheimer, Head of U.S. Equities,
Nasdaq, to Vanessa Countryman, Secretary, Commission, dated May 27,
2026 (``Transmittal Letter''). According to the Transmittal Letter,
each of the Participants approved Amendment No. 27 in accordance
with Section III(C) of the Plan. The Participants also received and
incorporated feedback from the Plan Advisory Committee in preparing
Amendment No. 27.
\5\ Amendment No. 27 is available on the Commission's website
at: <a href="https://www.sec.gov/files/rules/sro/nms/2026/34-105596.pdf">https://www.sec.gov/files/rules/sro/nms/2026/34-105596.pdf</a>.
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Notice of filing of Amendment No. 27 was published for comment in
the Federal Register on June 4, 2026.\6\ The Commission has received no
comments regarding the proposed amendment to the Plan. The Commission
hereby grants approval of Amendment No. 27.
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\6\ See Securities Exchange Act Release No. 105596 (June 1,
2026), 91 FR 33774 (``Notice'').
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II. Description of the Plan
The Participants filed the Plan with the Commission on April 5,
2011, to create a market-wide limit up-limit down (``LULD'') mechanism
intended to address extraordinary market volatility in NMS Stocks, as
defined in Rule 600(b)(65) of Regulation NMS under the Exchange Act.\7\
The Plan sets forth procedures that provide for market-wide LULD
requirements to prevent trades in individual NMS Stocks from occurring
outside of the specified Price Bands.\8\ These LULD requirements are
coupled with Trading Pauses, as defined in Section I(Y) of the Plan, to
accommodate more fundamental price moves. In particular, the
Participants adopted this Plan to address extraordinary volatility in
the securities markets, i.e., significant fluctuations in individual
securities' prices over a short period of time, such as those
experienced during the ``Flash Crash'' on the afternoon of May 6, 2010.
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\7\ 17 CFR 242.600(b)(65).
\8\ Unless otherwise stated, capitalized terms used herein are
defined in the LULD Plan.
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III. Description of Proposed Amendment No. 27 to the Plan <SUP>9</SUP>
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\9\ Additional information regarding Amendment No. 27 can be
found in the Notice. See Notice, supra note 6.
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The Participants propose to implement Overnight Protections in two
phases. Amendment No. 27 proposes amendments to the Plan that
constitute the first phase (``Phase 1''). Amendment No. 27 also
discusses how the Participants will gather and analyze information
concerning overnight trading that they will use to develop
recommendations for a final proposal to be implemented in the overnight
session. The final proposal will be submitted to the Commission as a
plan amendment that will remove the interim measures and replace them
with revised overnight protections (``Phase 2'').
In this Amendment, the Participants propose to add a new Section
VIII to the Plan, entitled ``Overnight Protections,'' which establishes
a framework for calculating and disseminating ``Overnight Price Bands''
for use during ``Overnight Protected Hours'' (defined as 9:00 p.m.
Eastern Time on Sunday through Thursday to 4:00 a.m. Eastern Time on
the next calendar day),\10\ and requires all trading centers that are
operative during such hours to establish, maintain, and enforce written
policies and procedures that are reasonably designed to prevent trades
outside of such Overnight Price Bands.\11\
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\10\ See Notice, supra note 6 at 33776. The Participants state
that the 9:00 p.m. Eastern Time commencement of the Overnight
Protected Hours corresponds to the time at which the Processors will
open for overnight trading, thereby ensuring that the LULD mechanism
is operative from the moment overnight trading activity becomes
available through the consolidated market data infrastructure. The
Participants further state that the 4:00 a.m. Eastern Time
conclusion of the Overnight Protected Hours was selected to
accommodate the well-established practice of issuers releasing
earnings announcements, material corporate disclosures, and other
price-sensitive information during pre-market hours in advance of
the Regular Trading Session. By terminating Overnight Protected
Hours at 4:00 a.m. Eastern Time, the Participants state that they
intend for market participants to be able to incorporate newly
disclosed information into securities prices without the constraints
of pricing bands based on the prior day's activity. See id.
\11\ See id.
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The proposed amendments for Phase 1 include the following key
aspects:
(1) The Primary Listing Exchange for each NMS Stock will calculate
and disseminate to the Processors an Overnight Lower Price Band and an
Overnight Upper Price Band to be
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applied during Overnight Protected Hours for NMS Stocks.\12\ The
Overnight Price Bands will be based on two reference prices,\13\ as
adjusted for any relevant corporate actions: (i) the official closing
price of a stock as reported by the listing market for such NMS Stock
(``Closing Price''); and (ii) the consolidated last round lot sale as
of 7:45 p.m. Eastern Time, with the Overnight Lower Price Band being
20% lower than the lower of the reference prices, and the Overnight
Upper Price Band being 20% greater than the greater of the reference
prices; the Overnight Percentage Parameter for a leveraged ETP will be
20%, multiplied by the ETP's leverage ratio.\14\ For NMS Stocks with a
Closing Price of less than $1.00, the minimum Overnight Upper Price
Band and minimum Overnight Lower Price Band thresholds will each be
$1.00 from the applicable reference price; for NMS Stocks with a
Closing Price of $1.00 or more, the minimum Overnight Upper Price Band
and minimum Overnight Lower Price Band thresholds will each be $3.00
from the applicable reference price.\15\ The Minimum Price Band
thresholds for a leveraged ETP will be multiplied by the leverage ratio
of such product.\16\
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\12\ See id.
\13\ See id. The Participants state that the use of dual
reference prices is designed to mitigate the risks associated with
reliance on a single closing price that may become stale or
unrepresentative of current market conditions by the time overnight
trading commences, and that material information is frequently
disseminated after the close of the Regular Trading Session, and
post-market trading activity may result in prices that differ
meaningfully from the Closing Price. See id. at 33777.
\14\ See id. at 33776. The Participants selected a Percentage
Parameter of 20% for Overnight Price Bands to align with the 20%
static band protections currently employed by ATSs for overnight
trading. See id. at 33777.
\15\ See id. at 33776.
\16\ See id.
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(2) Primary Listing Exchanges will transmit the calculated
Overnight Price Bands to the Processors no later than 8:55 p.m. Eastern
Time, and the Processors will disseminate such bands to the public
prior to 9:00 p.m. Eastern Time.\17\
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\17\ See id.
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(3) All trading centers in NMS Stocks that are operative during
Overnight Protected Hours, must establish, maintain, and enforce
written policies and procedures that are reasonably designed to prevent
both trades and the display of prices outside the Overnight Price Bands
during Overnight Protected Hours.
(4) There will not be automatic Trading Pauses during the Overnight
Protected Hours if an Overnight Price Band is hit,\18\ however, the
Primary Listing Exchange of a stock may declare a Regulatory Halt when
warranted to maintain a fair and orderly market, in accordance with its
rules, including when orders are consistently being placed outside the
bands or the price bands are otherwise limiting price discovery.\19\
The Primary Listing Exchange will notify the Processor if it declares a
Regulatory Halt.\20\ During a Regulatory Halt during Overnight
Protected Hours, Participants will reject orders. Any NMS Stock subject
to a Regulatory Halt during Overnight Protected Hours will not reopen
during Overnight Protected Hours.\21\
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\18\ During Regular Trading Hours, a Primary Listing Exchange
must declare a Trading Pause if an NMS Stock does not exit a Limit
State with 15 seconds of entry and may declare a Trading Pause if an
NMS Stock is in a Straddle State. See LULD Plan Section VII(A)(1).
\19\ See Notice, supra note 6 at 33776, 33777-78.
\20\ See id. at 33776. The Participants state that Primary
Listing Exchanges anticipate using halt codes currently available
within the Processors' specifications. See id. at n.13.
\21\ See id. at 33776.
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(5) The proposed amendment also amends Section IV of the Plan to
require that trading center policies and procedures comply with the
overnight requirements specified in the new Section VIII.\22\
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\22\ See id. Unlike policies at certain ATSs, the proposed
amendment does not include guidance regarding how to handle
corporate actions during Overnight Protected Hours, as this decision
will be left to the discretion of each listing exchange. See id. at
n.14.
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The Participants state that they expect to include information
regarding the operations of Phase 1 in the Plan's quarterly reports,
commencing with the quarterly report covering the first full quarter of
overnight trading.\23\ The Participants will report on the evidence
gathered on overnight trading together with its proposal for Phase 2
revisions to overnight protections.\24\
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\23\ See id. at 33780.
\24\ See id.
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Amendment No. 27 proposes to modify the Implementation Section of
the LULD Plan to provide that Overnight Protections are expected to
commence on December 6, 2026.\25\
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\25\ See id. at 33799. The Participants state that the operative
date of the amendments are subject to certain systems changes by the
Processors for the Unlisted Trading Privileges (UTP) Plan and
Consolidated Tape Association (CTA) Plan to ensure dissemination of
overnight trading bands. See Notice, supra note 6 at 33781. The
Participants represent that the Processors are preparing to commence
overnight trading on December 6, 2026, and that implementation of
proposed Phase 1 is designed to require minimal work from the
Participants. See id. at 33777, 33778.
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IV. Discussion and Commission's Findings
Recent approvals to allow certain exchanges to conduct trading on a
23 hour per day, 5 day per week basis \26\ represent an expansion of
exchange trading into periods that have historically been characterized
by lower liquidity, wider spreads, and the potential for increased
price volatility. Amendment No. 27 is a first step to address potential
extraordinary market volatility between 9:00 p.m. and 4:00 a.m. Eastern
Time. For the reasons discussed below, the Commission finds that
Amendment No. 27, as proposed, is consistent with the requirements of
the Act and the rules and regulations thereunder. Specifically, the
Commission finds that Amendment No. 27 is consistent with Section 11A
of the Act \27\ and Rule 608 thereunder \28\ in that the proposal is
appropriate in the public interest, for the protection of investors and
the maintenance of fair and orderly markets, and that it removes
impediments to, and perfects the mechanism of, a national market
system.
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\26\ See, e.g., Securities Exchange Act Release Nos. 102400
(February 11, 2025), 90 FR 9794 (February 18, 2025) (SR-NYSEARCA-
2024-89); 101777 (November 27, 2024), 89 FR 97092 (December 6,
2024); and 105199 (April 10, 2026), 91 FR 20222 (April 15, 2026)
(SR-NASDAQ-2025-109). See also Securities Exchange Act Release No.
105206 (April 10, 2026) 91 FR 20213 (April 15, 2026) (SR-CboeEDGX-
2026-019).
\27\ See 15 U.S.C 78k-1.
\28\ See 17 CFR 242.608.
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First, the Overnight Protections proposed in Amendment No. 27 are
reasonably designed to address extraordinary volatility during a time
of reduced liquidity. Establishing price bands helps ensure that
overnight trading continues within a limited price range, which should
help protect investors that choose to trade during Overnight Protected
Hours. The proposed 20% Overnight Price Bands, without automatic
trading pauses, is similar to existing price protection mechanisms
employed by ATSs that currently operate overnight, which will be
familiar to market participants that trade overnight currently. In
addition, the two reference prices for setting the bands, including the
consolidated last round lot sale as of 7:45 p.m. Eastern Time, account
for news and trading activity that happens after the Closing Price is
determined. Further, the ability of a Primary Listing Exchange, in its
discretion, to call a Regulatory Halt that would remain in place for
the duration of the overnight session will allow the markets to resume
trading in a trading session following the overnight session
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where there is likely to be more liquidity. Together, these aspects of
Amendment No. 27 allow for price discovery to take place during the
overnight session while protecting investors from trading at
potentially aberrant prices in a low-liquidity overnight trading
environment.
Second, Amendment No. 27 establishes uniform protections across all
trading centers that operate during Overnight Protected Hours. All
trading centers in NMS Stocks that operate during Overnight Protected
Hours will be required to establish, maintain, and enforce written
policies and procedures that are reasonably designed to prevent both
trades and the display of prices outside the Overnight Price Bands
during Overnight Protected Hours. This uniformity should help promote
fair and orderly markets in NMS Stocks across all trading centers
during Overnight Protected Hours.
Third, Amendment No. 27 is a measured, first-step to address
extraordinary volatility during overnight trading of NMS Stocks, and it
is being implemented as the first step in a two-step phased approach to
applying the Plan's investor protections to overnight trading sessions.
As noted in the proposal, the Participants intend to gather and analyze
information concerning overnight trading and will use that information
to develop future recommendations for Plan operation during Overnight
Protected Hours.\29\
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\29\ The Commission has emphasized the importance of ongoing
review and assessment to ensure that the Plan continues to achieve
its objective of reducing extraordinary volatility. See, e.g.,
Securities Exchange Act Release No. 85623 (April 11, 2019), 84 FR
16086 (April 17, 2019) (File No. 4-631). The Commission expects
information regarding the operations of Phase 1 to be included in
the Plan's quarterly reports, commencing with the quarterly report
covering the first full quarter of overnight trading. See Notice,
supra note 6 at 33780.
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V. Conclusion
It is therefore ordered, pursuant to Section 11A of the Exchange
Act \30\ and Rule 608 thereunder,\31\ that Amendment No. 27 to the Plan
(File No. 4-631) be, and it hereby is, approved.
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\30\ 15 U.S.C. 78k-1.
\31\ 17 CFR 242.608.
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-16201 Filed 8-7-26; 8:45 am]
BILLING CODE 8011-01-P
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