Notice2026-18537
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.23(b)(2) Concerning the Resumption of Trading Following a Level 3 Market-Wide Circuit Breaker Halt
Primary source
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Published
September 11, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 175 (Friday, September 11, 2026)</title>
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[Federal Register Volume 91, Number 175 (Friday, September 11, 2026)]
[Notices]
[Pages 57945-57947]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-18537]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106293; File No. SR-MEMX-2026-29]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend Rule
11.23(b)(2) Concerning the Resumption of Trading Following a Level 3
Market-Wide Circuit Breaker Halt
September 8, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 28, 2026, MEMX LLC (``MEMX'' or the ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Exchange filed the
proposal as a ``non-controversial'' proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder.\4\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Commission a proposed rule change
to amend amend Rule 11.23(b)(2) concerning the resumption of trading
following a Level 3 market-wide circuit breaker halt. The text of the
proposed rule change is provided in Exhibit 5 and is available on the
Exchange's website at <a href="https://info.memxtrading.com/regulation/rules-and-filings/">https://info.memxtrading.com/regulation/rules-and-filings/</a>.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 11.23(b)(2) concerning the
resumption of trading following a Level 3 market-wide circuit breaker
(``MWCB'') halt in connection with the extension of exchange trading
hours to 23 hours per day, 5 days per week.\5\ As discussed herein, the
proposed rule change would retain the Exchange's current 4 a.m.
resumption time following a Level 3 Market Decline, notwithstanding the
fact that the Exchange would normally begin trading at 9 p.m. once the
Exchange has implemented 23/5 trading hours.
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\5\ The Exchange filed for immediate effectiveness a proposal to
amend its rules to permit 23x5 trading on August 28, 2026. See SR-
MEMX-2026-28, available on the Exchange's website at: <a href="https://info.memxtrading.com/regulation/rules-and-filings/">https://info.memxtrading.com/regulation/rules-and-filings/</a>.
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Background
The MWCB mechanism under Rule 11.23 provides an important,
automatic mechanism that is invoked to promote stability and investor
confidence during a period of significant stress when U.S. securities
markets experience extreme broad-based declines. All U.S. equity
exchanges and FINRA (collectively, the self-regulatory organizations or
``SROs'') adopted uniform rules relating to the MWCB mechanism in 2012,
which are designed to slow the effects of extreme price movement
through coordinated trading halts across U.S. securities markets when
severe price declines reach levels that may exhaust market
liquidity.\6\ Currently, market-wide circuit breaker rules provide for
trading halts in all U.S. cash equities and equity options markets
during a severe market decline as measured by a single-day decline in
the S&P 500 Index during Regular Trading Hours.
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\6\ See Securities Exchange Act Release No. 67090 (May 31,
2012), 77 FR 33531 (June 6, 2012) (SR-BATS-2011-038; SR-BYX-2011-
025; SR-BX-2011-068; SR-CBOE-2011-087; SR-C2-2011-024; SR-CHX-2011-
30; SR-EDGA-2011-31; SR-EDGX-2011-30; SR-FINRA-2011-054; SR-ISE-
2011-61; SR-NASDAQ-2011-131; SR-NSX-2011-11; SR-NYSE-2011-48; SR-
NYSEAmex-2011-73; SR-NYSEArca-2011-68; SR-Phlx-2011-129) (``MWCB
Approval Order'').
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Pursuant to Rule 11.23, a market-wide trading halt will be
triggered if the S&P 500 Index declines in price by specified
percentages from the prior day's closing price of that index.
Currently, the triggers are set at three circuit breaker thresholds: 7%
(Level 1), 13% (Level 2), and 20% (Level 3). A market decline that
triggers a Level 1 or Level 2 halt after 9:30 a.m. ET and before 3:25
p.m. ET would halt market-wide trading for 15 minutes, while a similar
market decline at or after 3:25 p.m. ET would not halt market-wide
trading. If a Level 3 Market Decline occurs at any time during the
trading day, trading in all stocks will halt on the Exchange for the
remainder of the trading day and will resume the following trading day
at 4 a.m. during the Pre-Market Session.
Proposal
The Exchange now proposes to amend Rule 11.23 to reflect extended
trading hours, i.e., 23/5 trading. Currently, the Exchange offers three
trading sessions on each day it is open for trading: (1) the Pre-Market
Session (4:00 a.m. to 9:30 a.m.); (2) Regular Trading Hours (9:30 a.m.
to 4:00 p.m.); and (3) the Post-Market Session (4:00 p.m. to 8:00
p.m.). On December 6, 2026, the Exchange intends to offer a new
Overnight Trading Session, which would be available from 9:00 p.m. to
4:00 a.m., significantly increasing the Exchange's hours of operation
in response to customer demand.
As discussed, current Rule 11.23(b)(2) provides that if a Level 3
Market Decline occurs at any time during the trading day, trading in
all stocks will halt on the Exchange for the remainder of the trading
day. Currently, this means the Exchange would re-open at its normal
time, i.e., 4 a.m., following a Level 3 Market Decline. However, the
Exchange intends to begin 23/5 trading on December 6, 2026.\7\
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\7\ See note 5 supra.
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Unless amended, when the Exchange launches overnight trading, the
current rule's reference to halting ``for the remainder of the trading
day'' \8\ would require that the Exchange re-open at an earlier time,
i.e., 9 p.m. on the same calendar day, when the Exchange's systems
would generally become available for the Overnight Trading Session. The
Exchange does not believe that this is an expected or desired result
and is therefore amending this rule in coordination with the other SROs
such that trading on the Exchange will not resume until 4 a.m. ET or
later on the following trading day, consistent with current market
practice. This proposed rule change is therefore not intended to make
any substantive changes to the MWCB mechanism. Rather, the proposed
rule change would preserve the resumption time following a Level 3
Market Decline, nothwistanding changes to the Exchange's rules that
would otherwise allow the Exchange to
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begin trading at 9 p.m. as it would on any other trading day.
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\8\ See MEMX Rule 11.23(b)(2).
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To effect this change, the Exchange proposes to delete the language
in Rule 11.23(b)(2) that provides that trading in all stocks will halt
on the Exchange for the remainder of the trading day if a Level 3
Market Decline occurs at any time during the trading day and replace
with new language that hard codes a 4 a.m. resumption whereby trading
in all stocks will halt on the Exchange until 4 a.m. on the following
trading day.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it
is designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general to protect
investors and the public interest.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The MWCB mechanism described in Rule 11.23 is an important,
automatic mechanism that is invoked to promote stability and investor
confidence during periods of significant stress when U.S. securities
markets experience extreme broad-based declines. The proposed rule
change would ensure that the Exchange's current 4 a.m. resumption time
following a Level 3 halt continues to apply when the Exchange and
various other U.S. equities exchanges begin trading on a 23/5 basis,
notwithstanding current rule text implying that the resumption time
would coincide with the start of overnight trading on the Exchange.
Rather than leave the rule in place as is, which would result in an
earlier resumption time than originally contemplated when the rule was
adopted, the Exchange, the other U.S. equity exchanges, and FINRA met
alongside industry representatives to determine the appropriate
resumption time. Following those discussions, the collective decision
was made to retain the 4 a.m. resumption time, notwithstanding the fact
that an earlier resumption time would be possible with the introduction
of 23/5 trading. The proposed rule change codifies this decision into
the Exchange's rules. The Exchange understands that the other SROs will
also be filing similar proposed rule changes. As a result, the market
as a whole, including on- and off-exchange, will continue to be subject
to harmonized rules for the resumption of trading following a Level 3
Market Decline.
While the SROs had previously decided to tie the resumption time
following a Level 3 halt to an SRO's normal hours of operation, the
upcoming transition to 23/5 trading raises various concerns that
warrant a change from the current approach.
First, the Exchange notes that the MWCB mechanism was designed to
provide a cooling off period where market participants would be
provided with additional time to evaluate the market events that led to
the decline before determining how to position their trading activity
for the next day. With the introduction of 23/5 trading and the start
of the Overnight Trading Session at 9 p.m., however, this cooling off
period could be materially shortened, reducing one of the key benefits
that the MWCB mechanism was designed to provide in the first place.
Rather than shorten the cooling off period and risk this benefit, the
Exchange believes the market would be better served by a change to the
length of the associated trading halt that mirrors current market
practice. As is the case today, the Exchange would re-open for pre-
market trading at 4 a.m., and would not offer an Overnight Trading
Session starting on the day of a Level 3 halt.
Second, the new Overnight Trading Session may be subject to
different liquidity and participation considerations than the current
pre-market session. Notably, while retail investors have expressed
interest in overnight trading, the Exchange expects that institutional
investors will take more time to transition to a round the clock model.
However, such institutional participation may be of heightened
importance following a Level 3 halt as these investors are likely to
have views on the underlying market events that led to the Level 3
Market Decline in the first place. The Exchange is concerned that
opening during hours that such participants do not normally trade may
impact the quality of price discovery at a time of significant market
volatility. Waiting until 4 a.m. to resume trading would facilitate
broader participation and therefore price discovery.
Finally, the Exhange notes that the Commission recently approved an
amendment to the Plan to Address Extraordinary Market Volatility that
would establish new price protections from 9 p.m. to 4 a.m.\11\ While
these price bands would help to assure a fair and orderly market during
normal market conditions, it is possible that they would instead
prevent normal price discovery following a Level 3 Market Decline.
Rather than allowing trading to resume with such price bands in effect,
which would represent a change from the current trade reopening
following a Level 3 Market Decline, the Exchange believes that waiting
until 4 a.m. to resume trading would ensure that price discovery can
occur unimpeded during pre-market trading, as it does today, which may
further inform prices going into the opening auction and regular market
hours trading following a Level 3 halt.
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\11\ See Securities Exchange Act Release No. 106042 (August 5,
2026), 91 FR 51515 (August 10, 2026) (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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Given the factors discussed above, the Exchange believes that
trading in all securities on the Exchange should resume at 4 a.m.
following a Level 3 halt. This decision, which will also be reflected
in the rules of the other SROs that Exchange understands will be
amended to provide that trading will resume on or after 4 a.m.
depending on the Exchange's normal re-opening time, would promote a
fair and orderly market at a time of significant market volatility, and
thereby protect investors and the public interest. In addition, while
the actual Level 3 resumption time would not be changing in practice--
as proposed, the current resumption time and future resumption time on
the Exchange would both be 4 a.m.--the Exchange believes that it is
appropriate to amend its rules to ensure that its rules reflect the
upcoming changes to the Exchange's hours of operation. Without this
change, market particpiants may mistakenly believe that the Exchange's
intention is to re-open the Exchange at 9 p.m. following a Level 3
halt. The proposed rule change would therefore facilitate operational
transparency while providing for a fair and orderly market.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act because the proposal would
ensure the continued, uninterrupted operation of a consistent mechanism
to halt trading across U.S. securities markets. Further, the Exchange
understands that the other SROs intend to file proposed rule changes to
ensure a consistent resumption time on or after 4 a.m.
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across all markets. Thus, the proposed rule change will help to ensure
consistency across market centers without implicating any competitive
issues.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change is filed for immediate effectiveness
pursuant to Section 19(b)(3)(A)(iii) \12\ of the Act and Rule 19b-
4(f)(6) thereunder \13\ in that it effects a change that: (i) does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) by its terms, does not become operative for 30 days after the
date of the filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest. The MWCB mechanism under Rule 11.23 is an important,
automatic mechanism that is invoked to promote stability and investor
confidence during periods of significant stress when securities markets
experience extreme broad-based declines as measured by a decline in the
S&P 500 Index. This proposed rule change will not significantly affect
the protection of investors or the public interest because, as noted
above, it would continue the Exchange's current practice, which is to
resume trading at 4 a.m. following a Level 3 halt, notwithstanding the
fact that the Exchange may open earlier on other trading days once 23/5
trading is implemented. The proposed rule change would also not impose
any significant burden on competition because the others SROs will be
submitting similar proposals to amend their own rules, consistent with
this proposed rule change, thereby ensuring consistency across market
centers without implicating any competitive issues.
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
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Furthermore, Rule 19b-4(f)(6)(iii) \14\ requires a self-regulatory
organization to give the Commission written notice of its intent to
file a proposed rule change under that subsection at least five
business days prior to the date of filing, or such shorter time as
designated by the Commission. The Exchange has satisfied this
requirement.
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\14\ 17 CFR 240.19b-4(f)(6)(iii).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#4634332a236b25292b2b232832350635232568212930"><span class="__cf_email__" data-cfemail="6c1e190009410f0301010902181f2c1f090f420b031a">[email protected]</span></a>. Please include
file number SR-MEMX-2026-29 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-MEMX-2026-29. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-MEMX-2026-29 and should be submitted on
or before October 2, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-18537 Filed 9-10-26; 8:45 am]
BILLING CODE 8011-01-P
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