Notice2026-18807
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 11.29 Regarding Trading Halts
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 15, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 177 (Tuesday, September 15, 2026)</title>
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[Federal Register Volume 91, Number 177 (Tuesday, September 15, 2026)]
[Notices]
[Pages 58507-58513]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-18807]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106323; File No. SR-CboeBZX-2026-071]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 11.29 Regarding Trading Halts
September 10, 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, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The
[[Page 58508]]
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)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend Exchange Rule 11.29 (``Trading Halts'') to set forth specific
requirements for halting and resuming trading in a security that is
subject to certain corporate actions. The Exchange has designated this
proposal as non-controversial pursuant to Rule 19b-4(f)(6)(iii) under
the Act.\5\ The text of the proposed rule change is provided in Exhibit
5.
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\5\ 17 CFR 240.19b-4(f)(6)(iii).
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The text of the proposed rule change is also available on the
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the
Exchange's website (<a href="https://www.cboe.com/us/equities/regulation/rule_filings/bzx/">https://www.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), and at the principal office of the Exchange.
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 11.29 (``Trading Halts'') to
set forth specific requirements for halting and resuming trading in a
security that is subject to certain corporate actions.
In conjunction with plans for operating 23 hours a day, 5 days a
week (``23/5 Trading''),\6\ the Exchange proposes to amend Rule 11.29
to set forth specific requirements for halting trading in a security
for which the Exchange is the Primary Listing Market \7\ that is
subject to certain issuer-related corporate actions and for resuming
trading in that security using a Halt Auction.\8\ The Exchange believes
that the proposed rules will provide transparency and clarity with
respect to the situations in which trading certain securities subject
to issuer-related corporate actions will be halted and the process
through which that halt will be implemented and terminated.
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\6\ See Securities Exchange Act Release No. 105587 (May 29,
2026), 91 FR 33238 (June 3, 2026), SR-CboeEDGX-2026-019.
\7\ See Exchange Rule 11.29(a)(10). The term ``Primary Listing
Market'' has the same meaning as the term is defined in the Amended
CTA/CQ Plan. The Amended CTA/CQ Plan defines a ``Primary Listing
Market'' as ``the national securities exchange on which an Eligible
Security is listed. If an Eligible Security is listed on more than
one national securities exchange, Primary Listing Market means the
exchange on which the security has been listed the longest''.
\8\ The Exchange describes its Halt Auction process in Rule
11.23(d).
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The Exchange understands that the other primary listing exchanges
plan to implement substantially identical versions of this rule to
ensure consistent treatment of corporate actions across the market.\9\
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\9\ See Securities Exchange Act Release No. 105862 (July 8,
2026), 91 FR 42999 (July 13, 2026), SR-NYSEArca-2026-71 (``NYSE Arca
Corporate Action Filing'') and Securities Exchange Act Release No.
105860 (July 8, 2026), 91 FR 42990 (July 13, 2026), SR-NASDAQ-2026-
057 (``Nasdaq Corporate Action Filing'').
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Background
Beginning in 2023, other primary listing exchanges adopted rules
establishing a mandatory regulatory halt in a security that is subject
to a reverse stock split.\10\ In 2023, the Commission approved a
proposal by The Nasdaq Stock Market LLC (``Nasdaq'') to amend its
trading halt rules to provide for a regulatory halt at the end of
trading on the day immediately before the market effective date of a
reverse stock split and a delayed reopening of the security on the
market effective date using the Nasdaq Halt Cross. In its filing,
Nasdaq explained that, because it processes reverse stock splits
overnight, allowing a security to reopen for trading in the pre-market
hours raised the ``potential for errors resulting in a material effect
on the market resulting from market participants' processing of the
reverse stock split, including incorrect adjustment or entry of
orders,'' \11\ and that imposing a trading halt ``which would prohibit
pre-market trading immediately after a reverse stock split'' \12\ would
allow the exchange and market participants to better detect any errors
or problems with orders for the security before trading begins and
thereby avoid any material effect on the market.\13\ In 2024, NYSE
Arca, Inc. (``NYSE Arca'') adopted a substantially similar
framework,\14\ amending its rules to require a regulatory halt in a
security for which it is the primary listing market before the end of
the Late Trading Session on the day immediately before the effective
date of a reverse stock split, with trading to resume through a Trading
Halt Auction at 9:00 a.m. Eastern Time (``ET'') on the effective
date.\15\ In approving and noticing these substantively identical
proposals, the Commission recognized that such a framework was
``designed to promote fair and orderly trading on the Exchange by
reducing the potential for order entry or other system-related errors
associated with a reverse stock split in a security for which [the
Exchange] is the Primary Listing Market.'' Unlike Nasdaq and NYSE Arca,
the Exchange has not previously codified a reverse stock split-specific
regulatory halt in its rulebook. Accordingly, rather than adopt a
standalone reverse stock split halt, the Exchange proposes through this
filing to establish a mandatory regulatory halt framework in Rule 11.29
that would apply to reverse stock splits together with the additional,
analogous corporate actions described below.
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\10\ See Securities Exchange Act Release No. 98878 (November 7,
2023), 88 FR 78081 (November 14, 2023) (SR-NASDAQ-2023-036)
(``Nasdaq Reverse Stock Split Proposal'').
\11\ Id. at 78081.
\12\ Id. at 78082.
\13\ Id.
\14\ See Securities Exchange Act Release No. 99862 (March 27,
2024), 89 FR 22760 (April 2, 2024) (SR-NYSEARCA-2024-29) (``NYSE
Arca Reverse Stock Split Proposal'').
\15\ Id.
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With the launch of 23/5 Trading later this year, the same concerns
that led Nasdaq and NYSE Arca to adopt a regulatory halt framework for
reverse stock splits \16\ and other corporate actions \17\ will
likewise arise for the Exchange. Under the current market structure,
the Exchange processes these corporate action-related changes and
updates for listed securities during overnight hours, when the Exchange
is closed to trading. Other market participants, including broker-
dealers, likewise use that overnight period to process corporate
action-related information and adjust quotes, orders, and related
instructions accordingly.
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\16\ Supra notes 10 and 14.
\17\ Supra note 9.
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Under 23/5 Trading, however, the Exchange's non-trading window will
be
[[Page 58509]]
reduced to a one-hour pause.\18\ Consequently, the Exchange will no
longer have a substantial non-trading window during which it can
process such corporate actions without potentially impacting ongoing
trading. These corporate actions require coordinated updates across
Exchange and market-participant systems--including adjustments to
orders, quotes, and related instructions--to ensure orderly trading and
accurate pricing and execution in the affected security. With only a
one-hour pause between trading days, neither the Exchange nor other
market participants would have sufficient time to process and
incorporate corporate action-related information--such as adjustments
to systems, orders, quotes, and related instructions--without the risk
that trading could occur in the affected security based on incomplete
or inconsistent information. In short, the continued trading of
securities undergoing such corporate actions could potentially result
in price dislocations, investor confusion, erroneous executions, and
general operational risk.
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\18\ The Exchange's 23/5 Trading operations will include a one-
hour pause between 8:00 p.m. ET and 9:00 p.m. ET. That pause,
however, is intended to accommodate systems and other maintenance
activities, rather than to provide a window for the coordinated
processing of the more complex issuer-related corporate actions as
proposed herein.
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To address these concerns, the Exchange proposes to amend Rule
11.29 to adopt a mandatory regulatory halt framework for certain
corporate actions, modeled on the reverse stock split halt and
corporate action halt frameworks previously adopted by Nasdaq and NYSE
Arca, that would apply to corporate actions that require a clearly
defined and transparent pause in trading to permit coordinated
processing. As proposed, under 23/5 Trading, if a security is affected
by any of the corporate actions enumerated in the proposal, the
Exchange would implement a mandatory regulatory halt \19\ in that
security after the end of the After Hours Trading Session and before
9:00 p.m. ET, and trading would resume with a Halt Auction at 8:00 a.m.
ET. The Exchange believes these changes would provide important
operational safeguards by ensuring that both the Exchange and market
participants have adequate time to process such corporate actions in a
nearly continuous trading environment, thereby preserving a protection
that has historically been implicit in a market structure with limited
trading hours.
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\19\ Notification of the declaration and termination of the
proposed regulatory halt would be provided in accordance with Rule
11.29.
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Proposed Rule Change
Implicit in Rule 11.29 is the recognition that certain corporate
actions--such as reverse stock splits--require a clearly defined and
transparent pause in trading to permit their coordinated processing and
thereby avoid the risks associated with concurrent trading in the
affected security while that processing is underway. The same principle
applies to the categories of corporate actions addressed in this
proposal, particularly in the context of nearly continuous trading.
In the context of 23/5 Trading, the Exchange has determined--based
on discussions both internal and with industry participants, including
the other Primary Listing Markets--that, similar to reverse stock
splits, certain other corporate actions require a clearly defined and
transparent pause in trading to facilitate their coordinated processing
by the Exchange and other market participants before orderly trading
may resume in the affected security.
Specifically, the Exchange believes that the following issuer-
related corporate actions are analogous to reverse stock splits with
respect to processing requirements and thus warrant analogous treatment
with respect to their categorization and regulatory response: (1)
changes in trading symbol, (2) changes in CUSIP number, (3) stock
dividends equal to at least 25% of the Official Closing Price; \20\ (4)
forward and reverse stock splits; (5) De-SPAC transactions; (6) spin-
off transactions; (7) security-type changes; (8) mergers or similar
mandatory exchanges of shares; and (9) any other corporate action or
issuer-related event not enumerated above, for which the Exchange
determines that a regulatory halt is necessary or appropriate for the
maintenance of fair and orderly markets, the protection of investors,
or otherwise in the public interest, as described below. Like reverse
stock splits, these corporate actions all involve non-discretionary
changes to core security characteristics that require synchronized
updates across Exchange and market-participant systems.
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\20\ The term ``Official Closing Price'' is defined in Rule
11.23(a)(3) and shall mean the price disseminated to the
consolidated tape as the market center closing trade.
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Accordingly, the Exchange proposes to amend Rule 11.29 to
incorporate such corporate actions into the framework established for
mandatory regulatory halts, as follows.
Specifically, the Exchange proposes to amend Rule 11.29(b)(1)(A) to
add new clause (v) extending the current regulatory halt framework to
the categories of corporate actions discussed above that would be
subject to the mandatory regulatory requirements of that rule. The
Exchange accordingly proposes to add new Rule 11.29(b)(1)(A)(v)
stating:
Corporate Action Halt. For a security for which the Exchange is
the Primary Listing Market that is the subject of an issuer
corporate action or other issuer-related event referenced below
after the end of the After Hours Trading Session and before 9:00
p.m. ET on the day immediately preceding the market effective date
of such issuer corporate action or issuer-related event (``Corporate
Action Halt''). A security subject to an issuer corporate action or
issuer event-related Regulatory Halt pursuant to this rule will
resume trading with a Halt Auction at 8:00 a.m. ET on the market
effective date of such corporate action or issuer-related event. For
purposes of this rule, the following shall be deemed corporate
actions or issuer-related events subject to the mandatory Regulatory
Halt provisions of this rule:
The Exchange proposes to further amend Rule 11.29(b)(1)(A)(v) to
enumerate the nine categories of corporate actions discussed above that
would be subject to a mandatory regulatory halt under that provision.
As proposed, the nine categories of enumerated corporate actions
subject to a mandatory regulatory halt would consist of the following
corporate actions: (1) trading symbol changes; \21\ (2) changes in
CUSIP; \22\ (3) stock dividends equal to at least 25% of the Official
Closing Price; \23\ (4) forward and reverse stock splits; \24\ (5) de-
SPAC
[[Page 58510]]
transactions; \25\ (6) spin-off transactions; \26\ (7) security-type
changes; \27\ (8) mergers/mandatory exchanges; \28\ and (9) other
corporate actions or issuer-related events not specifically enumerated
in (1)-(8) above as more particularly described below.\29\
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\21\ As proposed, Rule 11.29(b)(1)(A)(v)(1) would define changes
to any ``Trading Symbol'' as ``a change in the issuer's trading
symbol.''
\22\ As proposed, Rule 11.29(b)(1)(A)(v)(2) would define changes
in ``CUSIP'' as ``[a] change in the issuer's Committee on Uniform
Securities Identification Procedures (``CUSIP'').''
\23\ As proposed, Rule 11.29(b)(1)(A)(v)(3) would define
``Dividend'' transactions as ``[s]tock dividends, whether payable in
cash, stock, or another security of the issuer (or a subsidiary or
other affiliate of the issuer), or any combination thereof, other
than stock splits or similar adjustments described in paragraph (4),
where the Exchange determines that such dividend has an aggregate
value per share that is equal to at least 25% of the Official
Closing Price of the affected security on the date immediately
preceding the ex-date of such dividend; provided, however, that if
no such Official Closing Price is available, the Exchange shall use
the most recent available Official Closing Price for such shares (or
other securities).''
\24\ As proposed, Rule 11.29(b)(1)(A)(v)(4) would define
``Forward, Reverse Splits'' as ``[a]ny stock split or similar
adjustment that affects the number of outstanding shares of an
issuer or changes the relative equity ownership of holders of such
shares, including any forward or reverse stock split, subdivision,
reclassification, or combination of shares, or any similar
transaction that has the effect of adjusting the number of
outstanding shares or the relative equity ownership of holders,
whether effected pursuant to a fixed or variable exchange ratio or
otherwise, and whether occurring as a stand-alone action or in
conjunction with any other corporate action or issuer-related
event.''
\25\ As proposed, Rule 11.29(b)(1)(A)(v)(5) would define a ``De-
SPAC'' transaction as ``[a]ny De-SPAC transaction, as that term is
defined in Item 1601(a) of Regulation S-K.''
\26\ As proposed, Rule 11.29(b)(1)(A)(v)(6) would define a
``Spin-off'' transaction as ``[a]ny transaction in which an issuer
distributes to its security holders, on a pro rata basis, (i) equity
securities of a subsidiary or other business that is separated into
a new or existing standalone issuer; or (ii) any different class of
securities.''
\27\ As proposed, Rule 11.29(b)(1)(A)(v)(7) would define a
``Security Type Change'' as ``[a]ny change in the form, type, class,
or designation of a listed security, including, without limitation,
(i) American Depositary Receipts or American Depositary Shares
(``ADR''/``ADS'') to ordinary shares (and ordinary shares to ADR/
ADS); (ii) conversions between ordinary shares and common stock (in
either direction); and (iii) similar transactions.''
\28\ As proposed, Rule 11.29(b)(1)(A)(v)(8) would define a
``Merger/Mandatory Exchange'' as ``[a]ny merger, consolidation,
statutory share exchange, or similar business combination or
corporate action that results in the affected security being
mandatorily exchanged, converted, redeemed, or cancelled for cash,
securities, or other consideration (including an exchange into
securities of a successor issuer); provided, however, that this
paragraph (8) does not include transactions that solely effect a
change in the issuer's (company) name without a mandatory exchange
of the affected security.''
\29\ As proposed, Rule 11.29(b)(1)(A)(v)(9) would define any
``Other Corporate Action or Issuer-Related Event'' as ``[a]ny other
corporate action or issuer-related event not enumerated in (1)--(8)
above for which the Exchange determines, based on the totality of
the circumstances and any information available to it, including
without limitation information obtained from the issuer, that a
Regulatory Halt is necessary or appropriate for the maintenance of
fair and orderly markets, the protection of investors, or otherwise
in the public interest.''
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Specifically, proposed Rule 11.29(b)(1)(A)(v)(9) would require the
Exchange to declare a regulatory halt for any other corporate action or
issuer-related event not enumerated in (1)-(8) above for which the
Exchange determines, based on the totality of the circumstances and any
information available to it, including without limitation information
obtained from the issuer, that a regulatory halt is necessary or
appropriate for the maintenance of fair and orderly markets, the
protection of investors, or otherwise in the public interest.
This residual provision is designed to capture issuer-related
corporate actions that, while not enumerated in Rule
11.29(b)(1)(A)(v)(1)-(8), raise operational or market-integrity
concerns comparable to those actions. Once the Exchange determines that
such a corporate action warrants a Regulatory Halt based on its
application of the standards in Rule 11.29(b)(1)(A)(v)(9),
implementation of the regulatory halt would be required.\30\
Accordingly, the provision is intended to promote consistent regulatory
treatment across comparable corporate actions and to preserve
transparency and uniformity in the application of the proposed
framework in a 23/5 Trading environment.
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\30\ Such determination would be made by the Exchange's senior
trading and regulatory officials in advance of the corporate action
effective date.
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Timing of Corporate Action Regulatory Halts
The Exchange proposes that under 23/5 Trading, the mandatory
regulatory halts described above in proposed Rule 11.29(b)(1)(A)(v)
would be implemented after the end of the After Hours Trading Session
and before 9:00 p.m. ET on the day immediately preceding the market
effective date of each such corporate action. This timing differs from
Nasdaq and NYSE Arca's current process for reverse stock split
regulatory halts, pursuant to which a mandatory regulatory halt is
implemented at 7:50 p.m. ET, before the end of the respective
exchange's analogous After Hours Trading Session, on the day
immediately before the reverse split becomes effective. That approach
has been feasible in the reverse stock split context, but this proposal
would extend the mandatory regulatory halt framework beyond reverse
stock splits to a broader set of corporate actions that, although
differing in form, share the need for coordinated systems and
reference-data updates before trading may resume in an orderly manner.
Because some of those actions may involve entirely new symbols or
CUSIPs that would not yet exist at 7:50 p.m. ET on the prior trading
day, the Exchange does not believe that the current reverse stock split
timing can practicably be applied across the full set of covered
corporate actions. The Exchange therefore believes it is reasonable, in
the context of 23/5 Trading, to adopt a single, uniform implementation
time for all halts under proposed Rule 11.29(b)(1)(A)(v)--after the
After Hours Trading Session and before 9:00 p.m. ET--which would
facilitate consistent treatment of covered corporate actions and enable
the halts to be implemented through an automated process.\31\ This
timing would apply to each of the corporate actions addressed in this
filing.
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\31\ See Exchange proposed Rule 11.29(b)(1)(A)(v). Shifting the
implementation time for such regulatory halts from 7:50 p.m. to
before 9:00 p.m. would not have a material effect on market
participants. The Exchange notes that market participants, including
alternative trading systems (``ATSs''), would have advance notice of
the types of issuer corporate actions addressed in this proposal
through the Exchange's existing issuer notification, market notice,
and public dissemination mechanisms. Under the Exchange's existing
listing and related rules and/or procedures, listed issuers are
required in various circumstances to provide the Exchange advance
notice of corporate actions and to publicly disclose such events
before they become effective. In addition, the Exchange's
established corporate action processing and market notification
procedures generally result in the Exchange receiving notice of, and
disseminating information concerning, other covered corporate
actions sufficiently in advance of their effectiveness to support
the orderly implementation of the proposed halt process.
Accordingly, the Exchange believes that ATSs and other market
participants would have adequate advance awareness of the types of
corporate actions addressed by this proposal to make informed
business decisions with respect to the affected securities, and that
proposed Rule 11.29(b)(1)(A)(v) thus provides a transparent and
appropriate mechanism for addressing such corporate actions in a 23/
5 Trading environment.
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Resumption of Trading After Corporate Action-Related Regulatory Halts
The Exchange proposes that under 23/5 Trading, trading in a
security halted pursuant to proposed Rule 11.29(b)(1)(A)(v) would
resume at 8:00 a.m. ET on the market effective date of such corporate
action or issuer-related event with a Halt Auction, in advance of the
Opening Auction at 9:30 a.m. ET.\32\ This is similar to Nasdaq and NYSE
Arca's current process with respect to reverse stock split regulatory
halts, where trading resumes at 9:00 a.m. ET, with a modification to
8:00 a.m. ET from 9:00 a.m. ET.
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\32\ See proposed Rule 11.29(b)(5)(A)(ii)(e).
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In NYSE Arca's Reverse Stock Split Proposal, NYSE Arca explained
that re-opening the security at 9:00 a.m. ET, ``which is after the
start of early trading on away markets and the Exchange but before the
opening of the Exchange's Core Trading Session at 9:30 a.m., would
promote fair and orderly trading, protect investors, and promote the
public interest by allowing market participants and the Exchange a
better opportunity to notice errors or problems with orders for the
security because it would be opening for trading at a unique time, and
not at a time when thousands of other securities open for trading.''
\33\
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\33\ See NYSE Arca Reverse Stock Split Proposal, supra note 14,
at 22762.
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Since the reverse stock split regulatory halt was introduced in
2023,
[[Page 58511]]
both Nasdaq and NYSE Arca have determined that it would be preferable
to re-open from a reverse stock split halt at 8:00 a.m. ET instead of
9:00 a.m. ET. That alteration would provide for an additional hour of
liquidity formation and price discovery before the 9:30 a.m. ET Opening
Auction, while still being consistent with the rationales cited above
for re-opening trading at a ``unique'' time. Specifically, the Exchange
believes that resuming trading in the affected securities at 8:00 a.m.
ET is appropriate because the proposed pause in trading provides a
sufficient and transparent interval for the Exchange and market
participants to complete the processing of such corporate actions and
the earlier resumption of trading would provide the affected securities
with additional price discovery and liquidity formation opportunities
before participating in the Opening Auction at 9:30 a.m. ET.
Consistent with that rationale, the Exchange proposes that the
securities subject to the corporate action regulatory halts addressed
in this filing, including reverse stock splits, would re-open at 8:00
a.m. ET.\34\
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\34\ Supra note 32.
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In sum, the corporate actions addressed in this proposal raise
operational and market integrity concerns in a 23/5 Trading environment
that mirror the concerns addressed by the Commission in approving
Nasdaq and NYSE Arca's proposals related to reverse stock splits. Under
23/5 Trading, the Exchange will no longer have a substantial non-
trading window during which it and other market participants can
process these corporate actions before trading resumes. With only one
hour between trading days, neither the Exchange nor other market
participants would have sufficient time to process and incorporate
corporate action-related information, resulting in a risk of price
dislocations, investor confusion, erroneous executions, and broader
operational issues. The Exchange believes that extending the current
Nasdaq and NYSE Arca reverse stock split regulatory halt framework to
the corporate actions described herein would appropriately preserve, in
a 23/5 Trading environment, the safeguard implicit in the current
market structure--specifically, the overnight pause in trading that
allows for coordinated processing and related systems and reference-
data updates. Accordingly, the proposal would promote fair and orderly
trading, mitigate operational risk, and help ensure that trading
resumes only after those updates have been completed.
Implementation
The Exchange understands that the other Primary Listing Exchanges
plan to implement substantially identical versions of this rule to
ensure consistent treatment of corporate actions across the market. The
Exchange proposes that the changes in this proposal and in the other
Primary Listing Exchanges' similar filings would become operative at
the commencement of 23/5 Trading, which is anticipated to begin on
December 6, 2026.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\35\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \36\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \37\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\35\ 15 U.S.C. 78f(b).
\36\ 15 U.S.C. 78f(b)(5).
\37\ Id.
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The Exchange believes that the corporate action halt framework
discussed in this proposal would promote free and open trade, protect
investors, and serve the public interest by helping to ensure fair and
orderly markets. Specifically, the proposal would preserve and apply an
established, transparent framework for pausing and resuming trading in
securities subject to mandatory regulatory halts to certain corporate
actions with processing requirements similar to the reverse stock split
halts that exist on Nasdaq and NYSE Arca, so that trading in an
affected security does not occur before the corporate action has been
processed and the related systems and reference-data updates have been
completed and applied across the market.
With respect to the specific categories of corporate actions
addressed in this proposal, the Exchange believes that it is reasonable
and appropriate to extend the regulatory halt framework applicable to
reverse stock splits on Nasdaq and NYSE Arca to certain categories of
corporate actions with analogous processing requirements, as more
specifically described above. Like reverse stock splits, these
corporate actions all involve non-discretionary changes to core
security characteristics that require synchronized updates across
Exchange and market-participant systems.
Under the current market structure, an overnight pause in trading
has historically provided a defined non-trading window during which the
Exchange and other market participants have sufficient time to process
such corporate actions in an orderly and coordinated manner prior to
the resumption of trading. But in the 23/5 Trading environment, with
only one hour of non-trading time between trading days, there is a
substantial chance that trading in an impacted security could occur
based on incomplete, inconsistent, or partially updated information,
giving rise to pricing anomalies, investor confusion, erroneous
executions, and heightened operational risk. The Exchange believes the
proposed approach promotes fair and orderly markets by helping to
ensure that trading resumes only once systems and reference data
concerning these corporate actions have been fully and consistently
updated across the marketplace.
With respect to the mandatory regulatory halts specifically
enumerated in proposed Rule 11.29(b)(1)(A)(v)(1)-(8), if the corporate
action falls within the categories enumerated in the rule, the Exchange
will not have discretion about whether to declare a trading halt in the
affected security.
In addition, proposed Rule 11.29(b)(1)(A)(v)(9) is intended to
operate as a residual provision covering issuer-related corporate
actions not enumerated in Rule 11.29(b)(1)(A)(v)(1)-(8) that
nonetheless raise operational or market-integrity concerns comparable
to those presented by the enumerated actions. Under that provision,
when the Exchange determines, based on the totality of the
circumstances and the information available to it, including
information obtained from the issuer, that it is necessary or
appropriate for the maintenance of fair and orderly markets, the
protection of investors, or otherwise in the public interest, it would
be required to declare a regulatory halt in
[[Page 58512]]
that security. Once the Exchange makes that determination, the
regulatory halt would be mandatory, thereby avoiding ad hoc treatment
once the applicable standard has been met. In that respect, proposed
Rule 11.29(b)(1)(A)(v)(9) serves as a narrow residual mechanism
designed to promote consistent regulatory treatment across comparable
corporate actions and to preserve transparency and uniformity in the
application of proposed Rule 11.29(b)(1)(A)(v) in a 23/5 Trading
environment by requiring the Exchange to declare a regulatory halt in
such cases. The Exchange therefore believes that it is reasonable and
appropriate to extend its authority to declare a regulatory halt in
this instance.
In all cases under proposed Rule 11.29(b)(1)(A)(v), a mandatory
regulatory halt in the affected security would be implemented after the
end of the After Hours Trading Session and before 9:00 p.m. ET on the
day immediately preceding the market effective date of the corporate
action.
The Exchange also believes it is reasonable and appropriate to use
a Halt Auction under Rule 11.23(d) to re-open trading in a security
that is subject to a regulatory halt pursuant to this proposal because
it is consistent with the process that is typically used by the
Exchange when re-opening a security that has been halted under Rule
11.29. Applying a uniform, previously approved framework enhances
transparency and predictability for issuers, investors, and market
participants.
The Exchange believes that resuming trading in the corporate
action-impacted securities addressed in this proposal at 8:00 a.m. ET
would promote fair and orderly markets, protect investors, and serve
the public interest by providing the Exchange and market participants
sufficient time to process the relevant corporate actions correctly.
The Exchange further believes that resuming trading in the affected
securities through a Halt Auction at 8:00 a.m. ET, rather than at 9:30
a.m. ET through an Opening Auction, would provide a more focused re-
opening window and a better opportunity to identify and address
potential order-entry or processing issues before the broader market
opening, when thousands of other securities are undergoing their
opening process.
The Exchange also believes that the proposal is consistent with
Section 6(b)(5) of the Act because the Exchange's existing issuer
notification, market notice, and public dissemination mechanisms
generally provide market participants with advance awareness of the
types of corporate actions addressed herein, thereby supporting the
orderly implementation of the proposed halt process and helping to
protect investors and the public interest.
Overall, establishing mandatory trading halts for securities that
are subject to the corporate actions addressed in this filing and
resuming trading thereafter promotes fair and orderly markets and the
protection of investors, because it allows the Exchange to protect the
broader interests of the national market system and addresses potential
concerns that system errors may affect immediate trading in those
securities. The Exchange believes that with the advent of 23/5 Trading,
the proposed rules will help the Exchange reduce the potential for
errors resulting in a material effect on the market resulting from the
challenge of processing such corporate actions with only a one-hour
non-trading window between trading days. As discussed above, in a 23/5
Trading environment, the Exchange will no longer have an overnight
trading pause during which it can process corporate actions of the type
addressed in this proposal. By introducing a corporate action halt
framework based on the existing Nasdaq and NYSE Arca reverse stock
split regulatory halt framework, the proposal is designed to preserve
the safeguards currently afforded by that overnight pause.
For these reasons, the Exchange believes that the proposed rule
change is designed to remove impediments to and perfect the mechanism
of a free and open market and a national market system by mitigating
operational and market integrity risks that would otherwise arise in a
nearly continuous trading environment. By helping to ensure that
trading resumes only after corporate action processing has been
completed in an orderly and coordinated manner, the proposed rule
change promotes just and equitable principles of trade and protects
investors and the public interest, consistent with Sections 6(b) and
6(b)(5) of the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposal will not impose a burden on
intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed rule change
is designed to protect investors and facilitate a fair and orderly
market, which are both important purposes of the Act. To the extent
that there is any impact on intermarket competition, it is incidental
to these objectives.
Rather, the proposed changes will promote competition by ensuring
that trading in corporate action-affected securities resumes only when
the Exchange has processed corporate actions in a coordinated manner
across Exchange and market participants' systems, consistent with its
obligations as a primary listing market, thereby avoiding concurrent
trading and potential confusion with respect to the affected securities
while such corporate action processing is underway. In addition, the
Exchange believes that the proposal does not impose any burden on
competition because it applies equally to all issuers and market
participants. The proposal builds on an established, uniform, and
transparent framework governing the timing of trading halts and
resumptions in trading in connection with certain corporate actions and
is designed to address operational and market-integrity concerns,
rather than competitive considerations. In substance, the proposal
preserves an operational safeguard implicit in the current market
structure and adapts that safeguard to a nearly continuous trading
environment by extending the well-established reverse stock split
framework to analogous corporate actions. By helping to ensure that
trading resumes only after systems and reference data have been updated
in a coordinated manner, the proposal promotes fair and orderly markets
and enhances, rather than burdens, competition.
The Exchange does not believe that the proposed rule change imposes
a burden on intra-market competition because the provisions apply to
all market participants and issuers equally. In addition, information
regarding the halting and resumption of trading will be disseminated
using several freely accessible sources to ensure the widespread
availability of that information.
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
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date on which it was filed, or
such shorter time
[[Page 58513]]
as the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \38\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\39\
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\38\ 15 U.S.C. 78s(b)(3)(A)(iii).
\39\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of such 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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \40\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\40\ 15 U.S.C. 78s(b)(2)(B).
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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#f587809990d8969a9898909b8186b5869096db929a83"><span class="__cf_email__" data-cfemail="7002051c155d131f1d1d151e0403300315135e171f06">[email protected]</span></a>. Please include
file number SR-CboeBZX-2026-071 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-CboeBZX-2026-071. 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 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-CboeBZX-2026-071 and should be submitted
on or before October 6, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\41\
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\41\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-18807 Filed 9-14-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on September 15, 2026.
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