Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4121 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

Issuing agencies

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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 64439-64442]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20605]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106586; File No. SR-NASDAQ-2026-080]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 4121 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

[[Page 64440]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 25, 2026, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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

    The Exchange proposes to amend Equity 4, Rule 4121(b)(ii) 
concerning the resumption of trading following a Level 3 market-wide 
circuit breaker halt. The Exchange has designated this proposal as non-
controversial pursuant to Section 19(b)(3)(A)(iii) of the Act and 
provided the Commission with the notice required by Rule 19b-
4(f)(6)(iii) thereunder.
    The text of the proposed rule change is available on the Exchange's 
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings">https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings</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 Equity 4, Rule 4121(b)(ii) 
concerning the resumption of trading following a Level 3 market-wide 
circuit breaker (``MWCB'') halt in connection with the extension of 
exchange trading hours to 23 hours per day, 5 days per week (``23-5 
Trading'').\3\ As discussed herein, the proposed rule change would 
retain the Exchange's current 4:00 a.m. ET or later resumption time 
following a Level 3 Market Decline,\4\ notwithstanding the fact that 
the Exchange may otherwise begin trading at 9:00 p.m. Eastern Time 
(``ET'') once the Exchange has implemented 23-5 Trading.
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    \3\ See Securities Exchange Act Release No. 34-105199 (April 10, 
2026), 91 FR 20222 (April 15, 2026) (the ``23-5 Approval Order''). 
See also Exchange Rule Equity 1, Section 1(a)(19) (defining the term 
``Night Session'' as the time between 9:00 p.m. on one calendar day 
through 4:00 a.m. the next calendar day Sunday through Thursday 
provided that each such next calendar day is a Business Day and 
further providing (1) that the Exchange shall not commence operation 
of the Night Session unless the Equity Data Plans have established a 
mechanism to collect, consolidate, process and disseminate quotation 
and transaction information at all times during the Night Session 
that is equivalent to the mechanism established for Exchange trading 
hours during Regular Market Hours, and have provided the Exchange 
with notification that they are prepared to collect, consolidate, 
process and disseminate quotation and transaction information to 
accommodate the Night Session; (2) that, prior to commencing 
operation during the Night Session, the Exchange will file a 
proposed rule change pursuant to Section 19(b) of the Exchange Act 
and the rules thereunder to amend its rules confirming that the 
Exchange is able to comply with its obligations under the Exchange 
Act and the rules thereunder during the Night Session and that such 
Equity Data Plans are prepared to collect, consolidate, process and 
disseminate quotation and transaction information at all times 
during the Night Session; and (3) that if the Night Session Proposed 
Rule Change is not filed within 18 months of the SEC's approval of 
this proposed rule change, the Exchange will promptly file a 
proposed rule change to remove the rules that apply to the Night 
Session. The Exchange anticipates that the Night Session will become 
operative on or about December 6, 2026).
    \4\ A ``Level 3 Market Decline'' means a Market Decline of 20%. 
See Exchange Rule 4121(a)(iv).
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Background
    The MWCB mechanism under Equity 4, Rule 4121 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 the Financial Industry Regulatory Authority (``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.\5\ 
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 Market Hours.
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    \5\ 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 Equity 4, Rule 4121, 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 Pre-Market Hours Session.
Proposal
    The Exchange now proposes to amend Equity 4, Rule 4121 to reflect 
extended trading hours, i.e., 23-5 Trading. Currently, the Exchange 
operates three market sessions as follows: a Pre-Market Hours session 
from 4:00 a.m. to 9:30 a.m. ET; a Regular Market Hours session 
commencing at 9:30 a.m. with the execution of the Nasdaq Opening Cross 
and continuing until 4:00 p.m. ET; and a Post-Market Hours session 
commencing at 4:00 p.m. with the execution of the Nasdaq Closing Cross 
and continuing until 8:00 p.m. ET. During weekdays, between the hours 
of 8:00 p.m. and 4:00 a.m. ET, and during weekends, the Exchange is 
closed to trading. In connection with 23-5 Trading, however, the 
Exchange will offer a Night Session beginning at 9:00 p.m. ET and 
ending at 4:00 a.m. ET,\6\ significantly increasing the Exchange's 
hours of operation in response to customer demand.
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    \6\ See supra note 3 and accompanying text.
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    As discussed, current Equity 4, Rule 4121(b)(ii) provides that if a 
Level 3 Market Decline occurs at any time during the trading day, the 
Exchange shall halt trading in all stocks for the remainder of the 
trading day. Currently, this means the Exchange would reopen at its 
normal time, i.e., 4:00 a.m. ET, following a Level 3 Market Decline. 
However, the Exchange intends to begin 23-5 Trading on December 6, 
2026.\7\
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    \7\ See id.
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    Thus, unless amended, when the Exchange launches overnight trading, 
the current rule's reference to halting

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``for the remainder of the trading day'' could require the Exchange to 
reopen at an earlier time, i.e., 9:00 p.m. ET when the Exchange's 
systems would generally become available for the Night 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 coordinated 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 begin trading at 9:00 p.m. 
ET.
    To effect this change, the Exchange proposes to delete the language 
in Equity 4, Rule 4121(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 language providing that trading will not resume until 
4:00 a.m. ET or later on the following trading day.\8\
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    \8\ See proposed Equity 4, Rule 4121.
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    The Exchange proposes to establish the operative date of the 
proposed rule change in coordination with other SROs and the 
Commission, and at such time as the Exchange determines that 
implementation is operationally and technologically feasible. Notice to 
Exchange customers will be provided by Trader Alert.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\10\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The MWCB mechanism described in Equity 4, Rule 4121 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 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 could 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 Exchange determined, 
in coordination with other SROs, to retain a morning 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 Night 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 coordinated market practice. 
As is the case today, the Exchange would reopen for pre-market trading 
at 4:00 a.m. ET or later on the following trading day.
    Second, the new Night Session may be subject to different liquidity 
and participation considerations than the current pre-market session. 
Notably, while retail investors have expressed interest in overnight 
trading, the Exchange expects that institutional investors will take 
more time to transition to a round-the-clock model. However, such 
institutional participation may be of heightened importance following a 
Level 3 halt as these investors are likely to have views on the 
underlying market events that led to the Level 3 Market Decline in the 
first place. The Exchange is concerned that opening during hours that 
such participants do not normally trade may impact the quality of price 
discovery at a time of significant market volatility. Waiting until 
4:00 a.m. ET or later to resume trading would facilitate broader 
participation and therefore price discovery.
    Finally, the Commission recently approved an amendment to the Plan 
to Address Extraordinary Market Volatility that would establish new 
price protections from 9:00 p.m. ET to 4:00 a.m. ET. 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 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 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.
    Given the factors discussed above, the Exchange believes that 
trading in all NMS stocks should not resume until 4:00 a.m. ET or later 
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 4:00 a.m. ET or 
the applicable morning resumption time depending on the normal 
reopening time of each SRO, 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 Level 3 resumption time would remain as it is today (at or 
after 4:00 a.m. ET)), 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

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to reopen 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. 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 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#196b6c757c347a7674747c776d6a596a7c7a377e766f"><span class="__cf_email__" data-cfemail="6f1d1a030a420c0002020a011b1c2f1c0a0c41080019">[email&#160;protected]</span></a>. Please include 
file number SR-NASDAQ-2026-080 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-NASDAQ-2026-080. 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-NASDAQ-2026-080 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. 2026-20605 Filed 10-7-26; 8:45 am]
BILLING CODE 8011-01-P


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