Notice2026-19131
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7.18 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 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 59247-59253]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19131]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106356; File No. SR-NYSE-2026-41]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend Rule 7.18 Regarding Trading Halts
September 15, 2026.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on September 1, 2026, New York Stock Exchange LLC (``NYSE'' 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
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\ 15 U.S.C. 78a.
\3\ 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 7.18 (``Trading Halts'') to set
forth specific requirements for halting and resuming trading in a
security that is subject to certain corporate actions. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') proposes
to amend Rule 7.18 (``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 the industry's plans for the introduction of
trading 23 hours a day, 5 days a week (``23/5 Trading''), the
Exchange's affiliate exchange, NYSE Arca, Inc. (``NYSE Arca''), filed
with the Commission a proposal to amend its rules to set forth specific
requirements for halting trading in a security for which the Exchange
is the Primary Listing Market that is subject to certain issuer-related
corporate actions and for resuming trading in that security using a
Trading Halt Auction. NYSE Arca explained that the proposal would
expand on the framework already in place with respect to its authority
to declare a mandatory regulatory halt in advance of a reverse stock
split, thereby providing greater transparency and clarity with respect
to the situations in which trading certain
[[Page 59248]]
securities subject to issuer-related corporate actions will be halted
and the process through which that halt will be implemented and
terminated. On July 8, 2026, the Commission published a notice of
filing and immediate effectiveness of NYSE Arca's proposal.\4\
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\4\ See Securities Exchange Release No. 105862 (July 8, 2026),
91 FR 42999 (July 13, 2026) (SR-NYSEARCA-2026-71) (Notice of Filing
and Immediate Effectiveness of Proposed Rule Change to Amend Rule
7.18-E Regarding Regulatory Halts for Corporate Actions and Issuer-
Related Events).
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The Exchange now proposes to make the same changes to its own
rules. The Exchange understands that the other Primary Listing Markets
also plan to implement substantially identical versions of this rule to
ensure consistent treatment of corporate actions across the market.
Background
In 2024, the Commission noticed for immediate effectiveness the
Exchange's filing establishing the Exchange's authority to declare a
mandatory regulatory halt in a security for which the Exchange is the
Primary Listing Market when that security is subject to a reverse stock
split.\5\ Specifically, the Exchange proposed halting such a security
before the end of post-market trading on other markets on the day
immediately before the effective date of a reverse stock split, with
trading to resume with a Trading Halt Auction after 9:30 a.m. Eastern
Time (``ET'') on the next trading day, at the start of the Exchange's
Core Trading Session.\6\ The Exchange noted that because it processes
reverse stock splits overnight, having the security reopen for trading
on other markets at 4:00 a.m. ET 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.'' \7\ The Exchange explained
that this concern could be rectified by imposing a trading halt,
``which would prohibit pre-market trading immediately after a reverse
stock split'' and open trading in such securities with a Trading Halt
Auction after 9:30 a.m., at the start of the Exchange's Core Trading
Session.\8\ The Exchange further noted that imposing such a trading
halt and deferring the opening of the security until after 9:30 a.m. ET
would ``allow the Exchange and market participants to better detect any
errors or problems with orders for the security resulting from the
reverse stock split before trading in the security begins and thereby
avoid any material effect on the market.'' \9\ In approving the
substantively identical proposal of another market, the Commission
noted that the proposal 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.'' \10\
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\5\ See Securities Exchange Act Release No. 99974 (April 17,
2024), 89 FR 30415 (April 23, 2024) (SR-NYSE-2024-22) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Amend
Rule 123D) (``Reverse Stock Split Proposal'').
\6\ The Exchange noted in its filing that its affiliates NYSE
American LLC and NYSE Arca, Inc. had filed similar rule changes
proposing to re-open a security subject to a reverse stock split
trading halt with a Trading Halt Auction at 9:00 a.m., during those
exchanges' Early Trading Sessions. The Exchange explained that
because it does not have an early trading session for securities for
which it is the Primary Listing Market, it instead proposed that a
security for which the Exchange is the Primary Listing Market that
is subject to a reverse stock split trading halt would re-open with
a Trading Halt Auction after 9:30 a.m., at the start of the
Exchange's Core Trading Session. See Reverse Stock Split Proposal,
supra note 5, at 30416 n.10.
\7\ Id., 89 FR at 30417.
\8\ Id., 89 FR at 30416.
\9\ Id.
\10\ See Securities Exchange Act Release No. 98878 (November 7,
2023), 88 FR 78081 (November 14, 2023) SR-NASDAQ-2023-036) (Notice
of Filing of Amendment No. 1 and Order Granting Accelerated Approval
of Proposed Change, as Modified by Amendment No. 1, Relating to
Nasdaq Rules 4120 and 4753).
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With the launch of 23/5 Trading later this year, the concerns that
led the Exchange to adopt a regulatory halt framework for reverse stock
splits will likewise arise with respect to a broader set of corporate
actions. Although the Exchange does not currently plan to extend its
own trading hours, the Exchange is a Primary Listing Market whose
listed securities may trade on any venue, including NYSE Arca and other
exchanges that opt to offer 23/5 Trading. Under the current market
structure, the Exchange processes corporate action-related changes and
updates for its listed securities during overnight hours. 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.
Under 23/5 Trading, however, trading in the Exchange's listed
securities will resume on other markets at 9:00 p.m., only one hour
after the close of trading at 8:00 p.m. Consequently, there will no
longer be a substantial non-trading window during which the Exchange
and market participants can process such corporate actions without
potentially impacting overnight trading on other markets. 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.
To address these concerns, the Exchange proposes to implement
substantially the same changes that the Commission recently noticed for
immediate effectiveness on NYSE Arca. The Exchange proposes to build on
the framework established under Rule 7.18 for reverse stock splits by
extending that rule's mandatory regulatory halt requirement to
additional corporate actions that, much like reverse stock splits,
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 \11\ in that
security before the start of overnight trading on other markets at 9:00
p.m. ET, and trading would resume with a Trading Halt Auction after
9:30 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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\11\ Notification of the declaration and termination of the
proposed regulatory halt would be provided in accordance with Rule
7.18.
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Proposed Rule Change
Implicit in Rule 7.18 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
[[Page 59249]]
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) dividends
equal to at least 25% of the Official Closing Price; \12\ (4) stock
splits (including 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 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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\12\ The term ``Official Closing Price'' is defined in Rule
1.1(u).
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Accordingly, the Exchange proposes to amend Rule 7.18 and make
certain conforming changes to incorporate such corporate actions into
the regulatory framework established for corporate actions consisting
of reverse stock splits, as follows.
The Exchange proposes to amend Rule 7.18(b)(1)(A)(iii) to extend
the current reverse stock split regulatory halt framework to the
categories of other corporate actions discussed above that, in addition
to reverse stock splits, would be subject to the mandatory regulatory
requirements of that rule. The Exchange accordingly proposes to delete
the current text of Rule 7.18(b)(1)(A)(iii) and replace it with revised
text stating that the Exchange will declare a Regulatory 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 post-market trading
on other markets 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
Trading Halt Auction after 9:30 a.m. ET on the market effective date
of such corporate action or issuer-related event.
The Exchange proposes to further amend Rule 7.18(b)(1)(A)(iii) to
provide that ``[f]or 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,'' followed by 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; \13\ (2) changes in CUSIP; \14\
(3) dividends equal to at least 25% of the Official Closing Price; \15\
(4) forward (and reverse) stock splits; \16\ (5) de-SPAC transactions;
\17\ (6) spin-off transactions; \18\ (7) security-type changes; \19\
(8) mergers/mandatory exchanges; \20\ and (9) other corporate actions
or issuer-related events not specifically enumerated in (1)-(8) above
as more particularly described below.\21\
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\13\ As proposed, Rule 7.18(b)(1)(A)(iii)(1) would define
changes to any ``Trading Symbol'' as ``a change in the issuer's
trading symbol.''
\14\ As proposed, Rule 7.18(b)(1)(A)(iii)(2) would define
changes in ``CUSIP'' as ``[a] change in the issuer's Committee on
Uniform Securities Identification Procedures (``CUSIP'').''
\15\ As proposed, Rule 7.18(b)(1)(A)(iii)(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).''
\16\ As proposed, Rule 7.18(b)(1)(A)(iii)(4) would define
``Forward, Reverse Stock 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.''
\17\ As proposed, Rule 7.18(b)(1)(A)(iii)(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.''
\18\ As proposed, Rule 7.18(b)(1)(A)(iii)(6) would define a
``Spin-off'' transactions 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.''
\19\ As proposed, Rule 7.18(b)(1)(A)(iii)(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.''
\20\ As proposed, Rule 7.18(b)(1)(A)(iii)(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.''
\21\ As proposed, Rule 7.18(b)(1)(A)(iii)(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 7.18(b)(1)(A)(iii)(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
7.18(b)(1)(A)(iii)(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
[[Page 59250]]
standards in Rule 7.18(b)(1)(A)(iii)(9), implementation of the
regulatory halt would be required.\22\ 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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\22\ 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 7.18(b)(1)(A)(iii)
would be implemented after the conclusion of post-market trading on
other markets and before the start of overnight trading on other
markets at 9:00 p.m. ET. This timing differs from the Exchange's
current process for reverse stock split regulatory halts, pursuant to
which the Exchange implements the mandatory regulatory halt at 7:50
p.m. ET, before the end of post-market trading on other markets, 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 7.18(b)(1)(A)(iii)--after the
end of post-market trading on other markets and before overnight
trading begins on other markets at 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.\23\ This timing would
apply to each of the corporate actions addressed in this filing, as
well as to the Exchange's existing reverse stock split regulatory halt.
The proposed change to the timing for the implementation of the reverse
stock split regulatory halt is therefore conforming in nature, as it is
intended only to align that halt with the trading session structure
under 23/5 Trading.
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\23\ See Exchange proposed Rule 7.18(b)(1)(A)(iii). 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 7.18(b)(1)(A)(iii) 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 to amend Rule 7.18(b)(5)(B)(iii) to provide
that under 23/5 Trading, trading in a security halted pursuant to
proposed Rule 7.18(b)(1)(A)(iii) would resume ``with a Trading Halt
Auction after 9:30 a.m. ET on the market effective date of such
corporate action or issuer-related event.'' \24\ This is identical to
the Exchange's current process with respect to reverse stock split
regulatory halts, where the Exchange resumes trading with a Trading
Halt Auction after 9:30 a.m. ET on the effective date of the reverse
stock split. This proposal is designed to promote uniformity and
transparency with respect to the resumption of trading in securities
subject to a corporate actions-related regulatory halt under proposed
Rule 7.18(b)(1)(A)(iii).
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\24\ See proposed Rule 7.18(b)(5)(B)(iii).
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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 the
Exchange's Reverse Stock Split Proposal. 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 its reverse stock split regulatory
framework to the additional 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.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\25\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\26\ 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. The Exchange believes that the proposed rules will provide
greater transparency and clarity with respect to the situations in
which trading will be halted due to certain corporate actions and the
process through which that halt will be implemented and terminated, as
discussed below.
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\25\ 15 U.S.C. 78f(b).
\26\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that extending the reverse stock split
regulatory halt framework to the additional, analogous corporate
actions addressed 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
[[Page 59251]]
securities subject to reverse stock splits to certain corporate actions
with analogous processing requirements, 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 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 7.18(b)(1)(A)(iii)(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 7.18(b)(1)(A)(iii)(9) is intended to
operate as a residual provision covering issuer-related corporate
actions not enumerated in Rule 7.18(b)(1)(A)(iii)(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 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
7.18(b)(1)(A)(iii)(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 7.18(b)(1)(A)(iii) 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 7.18(b)(1)(A)(iii), a mandatory
regulatory halt in the affected security would be implemented after the
conclusion of post-market trading on other markets and before the start
of overnight trading on other markets at 9:00 p.m. ET on the date
immediately preceding the market-effective date of the corporate
action.
The Exchange also believes it is reasonable and appropriate to use
a Trading Halt Auction under Rule 7.35 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 the Exchange currently uses to
re-open a security after a reverse stock split regulatory halt, and the
operational complexity and processing demands associated with such
corporate actions are comparable to those involved regarding reverse
stock splits. Furthermore, using a Trading Halt Auction to re-open
trading after the regulatory halts addressed in this proposal is
consistent with the process that is typically used by the Exchange when
re-opening a security that has been halted under Rule 7.18. Applying a
uniform, previously approved framework enhances transparency and
predictability for issuers, investors, and market participants.
The Exchange's proposal to make conforming changes to its existing
reverse stock split regulatory halt structure to harmonize the halt
time with the time proposed in this filing is reasonable and would
promote transparency and predictability for issuers, investors, and
market participants. As described above, the current practice of
implementing a mandatory regulatory halt for a security undergoing a
reverse stock split at 7:50 p.m. ET 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
7.18(b)(1)(A)(iii)--after the end of post-market trading on other
markets and before overnight trading begins on other markets at 9:00
p.m. ET--which would facilitate consistent treatment of comparable
corporate actions, enhance transparency and predictability for issuers,
investors, and market participants, and support the orderly and
automated implementation of such halts. 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.
The Exchange believes that resuming trading in the corporate
action-impacted securities addressed in this proposal with a Trading
Halt Auction after 9:30 a.m. ET, just as it currently does for reverse
stock split halts, would remove impediments to and perfect the
mechanism of a free and open market and a national market system by
creating uniformity and transparency with respect to the re-opening
times for securities subject to a corporate actions-related regulatory
halt under proposed Rule 7.18(b)(1)(A)(iii).
The Exchange notes that these timing harmonization changes are
purely conforming and that, by aligning the reverse stock split
provisions with the corporate action-related halts described in this
filing, the proposal promotes a consistent and harmonized rule
[[Page 59252]]
structure, enhances transparency and predictability for issuers,
investors, and market participants, and reduces the potential for
confusion.
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, overnight trading on other markets will begin only
one hour after trading closes on the Exchange, meaning that there will
no longer be a substantial overnight period during which the Exchange
can process corporate actions of the type addressed in this proposal.
By extending the existing reverse stock split regulatory halt framework
to those categories of corporate actions, 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
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 after the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \27\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\28\
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\27\ 15 U.S.C. 78s(b)(3)(A)(iii).
\28\ 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) \29\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\29\ 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#c1b3b4ada4eca2aeacaca4afb5b281b2a4a2efa6aeb7"><span class="__cf_email__" data-cfemail="057770696028666a6868606b7176457660662b626a73">[email protected]</span></a>. Please include
file number SR-NYSE-2026-41 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-NYSE-2026-41. 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
[[Page 59253]]
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-NYSE-2026-41 and should be
submitted on or before October 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19131 Filed 9-17-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on September 18, 2026.
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