Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 11.24(b)(2) Concerning the Resumption of Trading Following a Level 3 Market-Wide Circuit Breaker Halt in Connection With the Industry's Expansion of Trading Hours to 23 Hours per Day, 5 Days per Week

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<title>Federal Register, Volume 91 Issue 194 (Thursday, October 8, 2026)</title>
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[Federal Register Volume 91, Number 194 (Thursday, October 8, 2026)]
[Notices]
[Pages 64418-64420]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20603]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106584; File No. SR-CboeEDGX-2026-062]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 11.24(b)(2) Concerning the Resumption of Trading Following a Level 
3 Market-Wide Circuit Breaker Halt in Connection With the Industry's 
Expansion of Trading Hours to 23 Hours per Day, 5 Days per Week

October 5, 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 September 24, 2026, Cboe EDGX Exchange, Inc. (the ``Exchange'' 
or ``EDGX'') 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 Exchange. 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

    Cboe EDGX Exchange, Inc. (``EDGX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (the ``Commission'') a 
proposed rule change to amend Rule 11.24(b)(2) concerning the 
resumption of trading following a Level 3 market-wide circuit breaker 
(``MWCB'') halt (``Level 3 Market Decline'') in connection with the 
industry's expansion of trading hours to 23 hours per day, 5 days per 
week (``23/5 Trading''). The text of the proposed rule change is 
provided in Exhibit 5.
    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/edgx/">https://www.cboe.com/us/equities/regulation/rule_filings/edgx/</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 11.24(b)(2) concerning the 
resumption of trading following a Level 3 Market Decline in connection 
with the extension of exchange trading hours to 23/5 Trading.\3\ As 
discussed herein, the proposed rule change would retain the Exchange's 
current 4 a.m. resumption time following a Level 3 Market Decline, 
notwithstanding the fact that the Exchange would normally begin trading 
at 9 p.m. once the Exchange has implemented 23/5 trading hours.
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    \3\ See Securities Exchange Act Release No. 105587 (May 29, 
2026), 91 FR 33238 (June 3, 2026), SR-CboeEDGX-2026-019 (``EDGX 23x5 
Filing'').
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Background
    The MWCB mechanism under Rule 11.24 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\ Currently, market-wide circuit breaker rules provide for 
trading halts in all U.S. cash equities and equity options markets 
during a severe market decline as measured by a single-day decline in 
the S&P 500 Index during Regular Trading Hours.
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    \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 11.24, a market-wide trading halt will be 
triggered if the S&P 500 Index declines in price by specified 
percentages from the prior day's closing price of that index. 
Currently, the triggers are set at three circuit breaker thresholds: 7% 
(Level 1), 13% (Level 2), and 20% (Level 3). A market decline that 
triggers a Level 1 or Level 2 halt after 9:30 a.m. ET and before 3:25 
p.m. ET would halt market-wide trading for 15 minutes, while a similar 
market decline at or after 3:25 p.m. ET would not halt market-wide 
trading. If a Level 3 Market Decline occurs at any time during the 
trading day, trading in all stocks will halt on the Exchange for the 
remainder of the trading day and will resume the following trading day 
at 4 a.m., at the start of the Early Trading Session.\5\
Proposal
    The Exchange now proposes to amend Rule 11.24 to reflect extended 
trading hours, i.e., 23/5 trading.
    Currently, the Exchange offers four trading sessions on each day it 
is open for trading: (1) the Early Trading Session (4:00 a.m. to 8:00 
a.m.); (2) the Pre-Opening Session (8:00 a.m. to 9:30 a.m.); (3) 
Regular Trading Hours (9:30 a.m. to 4:00 p.m.); and (4) the Post-
Closing Session (4:00 p.m. to 8:00 p.m.). Under the approved rule text 
in the EDGX 23x5 Filing, which will take effect in December 2026 
pending industry readiness, the Exchange intends to offer a new 
``Overnight Trading Session,'' which would be available from 9:00 p.m. 
to 4:00 a.m., significantly increasing the Exchange's hours of 
operation in response to customer demand.
    As discussed, current Rule 11.24(b)(2) provides that if a Level 3 
Market Decline

[[Page 64419]]

occurs at any time during the trading day, trading in all stocks will 
halt on the Exchange for the remainder of the trading day. Currently, 
this means the Exchange would re-open at its normal time, i.e., 4 a.m. 
at the start of the Early Trading Session, following a Level 3 Market 
Decline. However, the Exchange intends to begin 23/5 trading on 
December 6, 2026.\6\
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    \6\ Supra note 3.
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    Unless amended, when the Exchange launches the Overnight Trading 
Session, the current rule's reference to halting ``for the remainder of 
the trading day'' \7\ would require that the Exchange re-open at an 
earlier time, i.e., 9 p.m. on the same calendar day, when the 
Exchange's systems would generally become available for the Overnight 
Trading Session. The Exchange does not believe that this is an expected 
or desired result and is therefore amending this rule in coordination 
with the other SROs such that trading on the Exchange will not resume 
until 4 a.m. ET or later on the following trading day, consistent with 
current market practice. This proposed rule change is therefore not 
intended to make any substantive changes to the MWCB mechanism. Rather, 
the proposed rule change would preserve the resumption time following a 
Level 3 Market Decline, notwithstanding changes to the Exchange's rules 
that would otherwise allow the Exchange to begin trading at 9 p.m. as 
it would on any other trading day.
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    \7\ See EDGX Rule 11.24(b)(2).
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    To effect this change, the Exchange proposes to delete the language 
in Rule 11.24(b)(2) that provides that trading in all stocks will halt 
on the Exchange for the remainder of the trading day if a Level 3 
Market Decline occurs at any time during the trading day and replace it 
with new language that hard codes a 4 a.m. resumption whereby trading 
in all stocks will halt on the Exchange until 4 a.m. on the following 
trading day.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The MWCB mechanism described in Rule 11.24 is an important, 
automatic mechanism that is invoked to promote stability and investor 
confidence during periods of significant stress when U.S. securities 
markets experience extreme broad-based declines. The proposed rule 
change would ensure that the Exchange's current 4 a.m. resumption time 
following a Level 3 halt continues to apply when the Exchange and 
various other U.S. equities exchanges begin trading on a 23/5 basis, 
notwithstanding current rule text implying that the resumption time 
would coincide with the start of overnight trading on the Exchange.
    Rather than leave the rule in place as is, which would result in an 
earlier resumption time than originally contemplated when the rule was 
adopted, the Exchange, the other U.S. equity exchanges, and FINRA met 
alongside industry representatives to determine the appropriate 
resumption time. Following those discussions, the collective decision 
was made to retain the 4 a.m. resumption time, notwithstanding the fact 
that an earlier resumption time would be possible with the introduction 
of 23/5 trading. The proposed rule change codifies this decision into 
the Exchange's rules. The Exchange understands that the other SROs will 
also be filing similar proposed rule changes. As a result, the market 
as a whole, including on- and off-exchange, will continue to be subject 
to harmonized rules for the resumption of trading following a Level 3 
Market Decline.
    While the SROs had previously decided to tie the resumption time 
following a Level 3 halt to an SRO's normal hours of operation, the 
upcoming transition to 23/5 trading raises various concerns that 
warrant a change from the current approach.
    First, the Exchange notes that the MWCB mechanism was designed to 
provide a cooling off period where market participants would be 
provided with additional time to evaluate the market events that led to 
the decline before determining how to position their trading activity 
for the next day. With the introduction of 23/5 trading and the start 
of the Overnight Trading Session at 9 p.m., however, this cooling off 
period could be materially shortened, reducing one of the key benefits 
that the MWCB mechanism was designed to provide in the first place. 
Rather than shorten the cooling off period and risk this benefit, the 
Exchange believes the market would be better served by a change to the 
length of the associated trading halt that mirrors current market 
practice. As is the case today, the Exchange would re-open for trading 
at 4 a.m. at the start of the Early Trading Session, 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 and Pre-Opening Session. Notably, while retail 
investors have expressed interest in overnight trading, the Exchange 
expects that institutional investors will take more time to transition 
to a round the clock model. However, such institutional participation 
may be of heightened importance following a Level 3 halt as these 
investors are likely to have views on the underlying market events that 
led to the Level 3 Market Decline in the first place. The Exchange is 
concerned that opening during hours that such participants do not 
normally trade may impact the quality of price discovery at a time of 
significant market volatility. Waiting until 4 a.m. to resume trading 
would facilitate broader participation and therefore price discovery.
    Finally, the Exchange notes that the Commission recently approved 
an amendment to the Plan to Address Extraordinary Market Volatility 
that would establish new price protections from 9 p.m. to 4 a.m.\10\ 
While these price bands would help to assure a fair and orderly market 
during normal market conditions, it is possible that they would instead 
prevent normal price discovery following a Level 3 Market Decline. 
Rather than allowing trading to resume with such price bands in effect, 
which would represent a change from the current trade reopening 
following a Level 3 Market Decline, the Exchange believes that waiting 
until 4 a.m. to resume trading would ensure that price discovery can 
occur unimpeded during the Early Trading Session and Pre-Opening 
Session, as it does today, which may further inform prices going into 
the opening auction and Regular Trading Hours trading following a Level 
3 halt.
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    \10\ See Securities Exchange Act Release No. 106042 (August 5, 
2026), 91 FR 51515 (August 10, 2026), File No. 4-631 (``LULD 
Overnight Protection Approval Order'').
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    Given the factors discussed above, the Exchange believes that 
trading in all securities on the Exchange should resume at 4 a.m. 
following a Level 3 halt. This decision, which will also be reflected 
in the rules of the other SROs that the Exchange understands will be 
amended to provide that trading will resume on or after 4 a.m. 
depending on

[[Page 64420]]

the Exchange's normal re-opening time, would promote a fair and orderly 
market at a time of significant market volatility, and thereby protect 
investors and the public interest. In addition, while the actual Level 
3 resumption time would not be changing in practice--as proposed, the 
current resumption time and future resumption time on the Exchange 
would both be 4 a.m.--the Exchange believes that it is appropriate to 
amend its rules to ensure that its rules reflect the upcoming changes 
to the Exchange's hours of operation. Without this change, market 
participants may mistakenly believe that the Exchange's intention is to 
re-open the Exchange at 9 p.m. following a Level 3 halt. The proposed 
rule change would therefore facilitate operational transparency while 
providing for a fair and orderly market.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act because the proposal would 
ensure the continued, uninterrupted operation of a consistent mechanism 
to halt trading across U.S. securities markets. Further, the Exchange 
understands that the other SROs intend to file proposed rule changes to 
ensure a consistent resumption time on or after 4 a.m. across all 
markets. Thus, the proposed rule change will help to ensure consistency 
across market centers without implicating any competitive issues.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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 19(b)(3)(A)(iii) of the Act \11\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 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 change 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#afdddac3ca82ccc0c2c2cac1dbdcefdccacc81c8c0d9"><span class="__cf_email__" data-cfemail="c5b7b0a9a0e8a6aaa8a8a0abb1b685b6a0a6eba2aab3">[email&#160;protected]</span></a>. Please include 
file number SR-CboeEDGX-2026-062 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-CboeEDGX-2026-062. 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-CboeEDGX-2026-062 and should be 
submitted on or before October 29, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-20603 Filed 10-7-26; 8:45 am]
BILLING CODE 8011-01-P


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