Notice2026-19123
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.12-E Concerning the Resumption of Trading Following a Level 3 Market-Wide Circuit Breaker Halt in Connection With the Expansion of Trading Hours to 23 Hours per Day, 5 Days per Week
Primary source
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Published
September 18, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 180 (Friday, September 18, 2026)</title>
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[Federal Register Volume 91, Number 180 (Friday, September 18, 2026)]
[Notices]
[Pages 59256-59259]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19123]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106378; File No. SR-NYSEARCA-2026-94]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.12-
E Concerning the Resumption of Trading Following a Level 3 Market-Wide
Circuit Breaker Halt in Connection With the Expansion of Trading Hours
to 23 Hours per Day, 5 Days per Week
September 15, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on September 4, 2026, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') 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
[[Page 59257]]
organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7.12-E (``Trading Halts Due to
Extraordinary Market Volatility'') concerning the resumption of trading
following a Level 3 market-wide circuit breaker halt in connection with
the extension of exchange trading hours to 23 hours per day, 5 days per
week. The proposed rule change is available on the Exchange's website
at <a href="http://www.nyse.com">www.nyse.com</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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'') proposes to
amend Rule 7.12-E (``Trading Halts Due to Extraordinary Market
Volatility'') concerning the resumption of trading following a Level 3
market-wide circuit breaker (``MWCB'') halt (``Level 3 Market
Decline'') in connection with the extension of exchange trading hours
to 23 hours per day, 5 days per week (``23/5 Trading'').\3\ As
discussed herein, the proposed rule change would retain the current
4:00 a.m. ET resumption time following a Level 3 Market Decline,
notwithstanding the fact that the Exchange would normally open for
overnight trading at 9:00 p.m. ET once the Exchange has implemented 23/
5 Trading.
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\3\ See Securities Exchange Act Release No. 105532 (May 21,
2026), 91 FR 31509 (May 27, 2026) (SR-NYSEARCA-2026-53) (``NYSE Arca
23/5 Trading Notice'').
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Background
The MWCB mechanism under Rule 7.12-E 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.\4\ Such market-wide circuit breakers provide for trading
halts in all U.S. cash equity and equities 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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\4\ 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 7.12-E, 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 4:00 a.m. ET during the Early Trading Session.
Proposal
The Exchange now proposes to amend Rule 7.12-E 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 Early
Trading Session (4:00 a.m. ET to 9:30 a.m. ET); (2) the Core Trading
Session (9:30 a.m. ET to 4:00 p.m. ET); and (3) the Late Trading
Session (4:00 p.m. ET 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. ET to 4:00 a.m. ET, significantly increasing
the Exchange's hours of operation in response to customer demand.
As discussed, current Rule 7.12-E (b)(ii) 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., 4:00 ET a.m., following a Level 3 Market Decline. However,
the Exchange intends to begin 23/5 Trading on December 6, 2026.\5\
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\5\ See supra note 3.
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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'' \6\ would require that the Exchange re-open trading at an earlier
time, i.e., at 9:00 p.m. ET 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 4:00 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 current resumption
time following a Level 3 Market Decline, notwithstanding changes to the
Exchange's rules that would otherwise allow the Exchange to resume
trading at 9:00 p.m. ET as it would on any other trading day.
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\6\ See Rule 7.12-E(b)(ii).
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To effect this change, the Exchange proposes to delete the language
in Rule 7.12-E(b)(ii) 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 it with new language that explicitly provides that trading in
all stocks would halt on the Exchange until 4:00 a.m. ET or later on
the following trading day.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
[[Page 59258]]
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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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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The MWCB mechanism described in Rule 7.12-E 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 4:00 a.m. ET 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 4:00 a.m. ET 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 the earliest SRO opening time, 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 9:00 p.m. ET, 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. Under the proposed rule, as is the case today,
after a Level 3 halt, the Exchange would re-open for the Early Trading
Session at 4:00 a.m. ET 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
Early Trading 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 4:00 a.m. ET to resume trading would
facilitate broader participation and therefore price discovery.
Finally, the Exchange notes that the Commission recently approved
an amendment to the Plan to Address Extraordinary Market Volatility
(``LULD Plan'') that would establish new price protections from 9:00
p.m. ET to 4:00 a.m. ET.\9\ 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 trading reopening following a Level 3 Market Decline,
the Exchange believes that waiting until 4:00 a.m. ET 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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\9\ 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 not resume before at
4:00 a.m. ET on the trading day after a Level 3 halt. This decision,
which the Exchange understands will also be reflected in the rules of
the other SROs, 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 would both be 4:00 a.m. ET at the
earliest--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 participants
may mistakenly believe that the Exchange's intention is to re-open
trading on the Exchange at 9:00 p.m. ET 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 4:00 a.m. ET or later across
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
No written comments were solicited or received with respect to 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 from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section
[[Page 59259]]
19(b)(3)(A)(iii) of the Act \10\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
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#ed9f988188c08e8280808883999ead9e888ec38a829b"><span class="__cf_email__" data-cfemail="daa8afb6bff7b9b5b7b7bfb4aea99aa9bfb9f4bdb5ac">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2026-94 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-NYSEARCA-2026-94. 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-NYSEARCA-2026-94 and should be submitted
on or before October 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19123 Filed 9-17-26; 8:45 am]
BILLING CODE 8011-01-P
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