Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Equity 4, Rule 4120 To Set Forth Specific Requirements for Halting and Opening Trading in Exchange-Traded Products During 23/5 Trading

Issuing agencies

Full Text

<html>
<head>
<title>Federal Register, Volume 91 Issue 199 (Friday, October 16, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 199 (Friday, October 16, 2026)]
[Notices]
[Pages 65833-65836]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21137]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106658; File No. SR-NASDAQ-2026-088]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Equity 4, Rule 4120 To Set Forth Specific Requirements for 
Halting and Opening Trading in Exchange-Traded Products During 23/5 
Trading

October 13, 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 October 1, 2026, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``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

[[Page 65834]]

Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Equity 4, Rule 4120 to set forth 
specific requirements for halting and opening trading in an Exchange-
Traded Product (``ETP'') during 23/5 trading.
    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
    On April 10, 2026, the Commission approved Nasdaq's proposed rule 
change to extend the Exchange's trading hours for equity securities and 
ETPs to 23 hours per day, five days per week (``23/5 Trading'').\3\ As 
set forth in the 23/5 Approval Order, the Exchange will conduct 23/5 
Trading in two sessions: a ``Day'' Session, which comprises all 
existing trading hours of the Exchange, from 4:00 a.m. Eastern Time 
(``ET'') until 8:00 p.m. ET,\4\ and a newly established ``Night'' 
Session, which will run from 9:00 p.m. ET until 4:00 a.m. ET.\5\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 105199 (Apr. 10, 
2026) (SR-NASDAQ-2025-109) (``23/5 Approval Order'').
    \4\ The new Day Session will consolidate and encompass three 
daily trading sessions that occur on Nasdaq during each weekday from 
Monday through Friday. In particular, the Day Session will encompass 
the following. First, it will include the Pre-Market Hours session 
that Nasdaq currently conducts from 4:00 a.m. to 9:30 a.m. ET. See 
Rule Equity 1, Section 1(a)(9). Second, commencing at 9:30 a.m. with 
the execution of the Nasdaq Opening Cross, the Day Session will 
include Nasdaq's Regular Market Hours trading session, which runs 
until 4:00 p.m. See id. Third, commencing at 4:00 p.m. with the 
execution of the Nasdaq Closing Cross, the Day Session will include 
the Post-Market Hours trading session, which runs from 4:00 p.m. 
until 8:00 p.m. See id.
    \5\ During weekdays, between the hours of 8:00 p.m.-4:00 a.m. 
ET, the Exchange at present is closed to trading as it is during all 
weekend hours. Going forward, however, the Night Session will run 
between 9:00 p.m.-4:00 a.m. ET during the weekdays, commencing each 
week with a Night Session that will begin at 9:00 p.m. ET on 
Sundays.
---------------------------------------------------------------------------

    Under the Exchange's current trading hours, an ETP that is being 
listed on Nasdaq for the first time commences trading at the start of 
Pre-Market Hours at 4:00 a.m. ET on the first day of trading. 
Alternatively, an ETP issuer may elect the optional Initial ETP Open 
process under Rule 4120(b)(1)(B)(viii) and (b)(4)(A)(i)d., pursuant to 
which the ETP is halted from 4:00 a.m. ET until it is released for 
trading via the Nasdaq Halt Cross under Rule 4753 between 9:40 a.m. and 
9:45 a.m. ET.\6\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 103085, 90 FR 22424 
(May 27, 2025) (SR-NASDAQ-2025-011) (``Initial ETP Open Approval 
Order'').
---------------------------------------------------------------------------

    In the 23/5 Trading environment, the trading day for equity 
securities and ETPs will generally commence at the start of the Night 
Session at 9:00 p.m. ET on the calendar day immediately preceding each 
business day, and subject to a ``Night-to-Day Handoff,'' will continue 
through the Day Session that follows until the conclusion of the Day 
Session at 8:00 p.m. ET on that business day.\7\ However, the Exchange 
has determined that a 9:00 p.m. ET commencement of trading on the 
calendar day immediately preceding the first day of trading may not be 
appropriate for newly-listed ETPs that have not opted into the Initial 
ETP Open because the initial hours of the Night Session are expected to 
be characterized by comparatively lower liquidity and a reduced 
opportunity for price discovery compared to the Day Session. The 
Exchange therefore proposes to make clear in new subparagraph (vii) of 
Rule 4120(b)(1)(C) that for Nasdaq-listed ETPs where the issuer has not 
elected the Initial ETP Open set forth in Rule 4120(b)(1)(B)(viii) and 
(b)(4)(A)(i)d., the Exchange will halt trading at the commencement of 
the Night Session on the first day of trading. Such Nasdaq-listed ETPs 
subject to a regulatory halt pursuant to new Rule 4120(b)(1)(C)(vii) 
will resume trading pursuant to the Nasdaq Halt Cross in Rule 4753 no 
earlier than the commencement of the Day Session (i.e., 4:00 a.m. ET) 
on the first day of trading of the ETP.
---------------------------------------------------------------------------

    \7\ At the conclusion of the Night Session at 4:00 a.m. ET, the 
Exchange will conduct a Night-to-Day Handoff of de minimis duration 
during which trading will be momentarily in abeyance to permit the 
Exchange to transition between the technically and functionally 
separate systems underlying the Day Session and the Night Session 
and to avoid submitting overlapping quotation and transaction 
information to the Securities Information Processor. See Securities 
Exchange Act Release No. 105590 (June 1, 2026), 91 FR 33845 (June 4, 
2026) (SR-NASDAQ-2026-047).
---------------------------------------------------------------------------

    The proposed rule change will give the Exchange flexibility to open 
trading in newly-listed ETPs as early as 4:00 a.m. ET on the first day 
of trading after halting the ETP at the start of the Night Session at 
9:00 p.m. ET, which opening time would align with the Exchange's 
current 4:00 a.m. ET opening time for newly-listed ETPs that do not opt 
into the Initial ETP Open today.\8\ In general, however, the Exchange 
expects to initiate the regulatory halt at the start of the Night 
Session at 9:00 p.m. ET, and open trading in a newly-listed ETP at 9:00 
a.m. ET on the following business day through the Nasdaq Halt Cross. 
The Exchange notes that the proposed 9:00 a.m. ET resumption time and 
opening process via Nasdaq Halt Cross for such ETPs are consistent with 
the resumption time and opening process for reverse stock splits that 
the Commission previously approved, particularly with respect to the 
resumption of trading at 9:00 a.m. ET pursuant to the Nasdaq Halt 
Cross.\9\
---------------------------------------------------------------------------

    \8\ The difference under this proposal is that the ETP would 
come out of the regulatory halt and open for trading at 4:00 a.m. ET 
pursuant to the Nasdaq Halt Cross whereas today, the ETP 
systematically opens for trading at the 4:00 a.m. ET opening time 
without the Nasdaq Halt Cross. The Exchange intends to work on 
system enhancements that would allow newly-listed ETPs to 
systematically open for trading at 4:00 a.m. ET in 23/5 Trading like 
they begin trading today (i.e., open without going through the 
Nasdaq Halt Cross), and will come in with a separate rule filing to 
implement this change.
    \9\ See Securities Exchange Act Release No. 98878 (November 7, 
2023), 88 FR 78081 (November 14, 2023) (SR-NASDAQ-2023-036) (``RSS 
Approval Order'') (providing that, among other things, Nasdaq 
expects to ``resume trading at 9:00 a.m. on the day the split is 
effective'').
---------------------------------------------------------------------------

    As described above, under the Exchange's current trading hours, an 
ETP that is being listed on Nasdaq for the first time commences trading 
at the start of Pre-Market Hours at 4:00 a.m. ET on the first day of 
trading as a passive consequence of the Exchange opening at that time, 
provided the ETP issuer did not opt into the Initial ETP Open to delay 
the opening of the ETP on launch day until Regular Market Hours. In 23/
5 Trading, however, the Night Session concludes at 4:00 a.m. ET and the 
Day Session commences at 4:00 a.m. ET, separated only by the Night-to-
Day Handoff of de minimis duration during which trading is momentarily 
in abeyance to permit the Exchange to transition between the 
technically and functionally separate systems underlying its two 
trading sessions. Any

[[Page 65835]]

commencement of trading in a newly-listed ETP at the start of the Day 
Session at 4:00 a.m. ET would therefore require an affirmative release 
from the mandatory regulatory halt proposed in Rule 4120(b)(1)(C)(vii) 
at that time. The Exchange notes that many newly-listed ETPs are 
expected to continue to use the Initial ETP Open process under Rule 
4120(b)(1)(B)(viii) and (b)(4)(A)(i)d., such that the regulatory halt 
under proposed Rule 4120(b)(1)(C)(vii) is expected to apply to only a 
subset of newly-listed ETPs.
Implementation
    The Exchange proposes that the changes in this proposal 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,\10\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\11\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As discussed above, the Exchange is seeking to amend rules related 
to halting and resuming trading in newly-listed ETPs for which Nasdaq 
is the primary listing exchange and that do not opt into the Initial 
ETP Open in the context of 23/5 Trading. The Exchange believes that 
establishing a regulatory halt rule will protect investors by giving 
the Exchange authority to act in situations where it is necessary to 
maintain fair and orderly markets by ensuring that the initial trades 
in a newly-listed ETP occur at a time when there is greater liquidity 
in the market and the opportunity for price discovery in the ETP will 
be more robust than during the Night Session. Deferring the 
commencement of trading in a newly-listed ETP from the start of the 
Night Session until no earlier than the commencement of the Day Session 
on the first day of trading of the ETP, when market participants like 
authorized participants and market makers that contribute to price 
discovery in ETPs are more present in the market, promotes just and 
equitable principles of trade and protects investors from the risk that 
initial prices in the ETP are established under materially less robust 
price discovery conditions. Further, by providing the Exchange with 
non-discretionary authority to halt trading in a newly-listed ETP that 
does not opt into the Initial ETP Open from the commencement of the 
Night Session, and by directing that trading in the ETP resume no 
earlier than the commencement of the Day Session through the Nasdaq 
Halt Cross under Rule 4753, the proposed rule change extends to newly-
listed ETPs the same operational safeguard the Commission approved for 
reverse stock splits in the RSS Approval Order.\12\
---------------------------------------------------------------------------

    \12\ See supra note 8.
---------------------------------------------------------------------------

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 proposed rule change is not 
designed to address any competitive issue. Rather, its purpose is to 
establish an orderly framework for the first-day trading of newly-
listed ETPs for which Nasdaq is the primary listing market in the 23/5 
Trading environment, by extending the mandatory regulatory halt 
framework the Commission approved in the RSS Approval Order.
    The proposed rule change does not impose any undue burden on intra-
market competition because it will apply uniformly to all newly-listed 
ETPs for which Nasdaq is the primary listing market. The proposed rule 
change preserves issuer choice by carving out ETPs that have elected 
the Initial ETP Open so that the framework the Commission approved in 
Initial ETP Open Approval Order remains available to any ETP issuer. 
The proposed rule change does not impose any undue burden on inter-
market competition as any other exchange may propose an analogous 
framework for the first day of trading of newly-listed ETPs on that 
exchange.

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 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 \13\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 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.
---------------------------------------------------------------------------

    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) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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#e092958c85cd838f8d8d858e9493a0938583ce878f96"><span class="__cf_email__" data-cfemail="86f4f3eae3abe5e9ebebe3e8f2f5c6f5e3e5a8e1e9f0">[email&#160;protected]</span></a> Please include file 
number SR-NASDAQ-2026-088 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-2026-088. 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

[[Page 65836]]

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-2026-088 and should be submitted 
on or before November 6, 2026.


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-21137 Filed 10-15-26; 8:45 am]
BILLING CODE 8011-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>