Self-Regulatory Organizations: Long-Term Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 11.280 Concerning the Resumption of Trading Following a Level 3 Market-Wide Circuit Breaker Halt

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<title>Federal Register, Volume 91 Issue 210 (Monday, November 2, 2026)</title>
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[Federal Register Volume 91, Number 210 (Monday, November 2, 2026)]
[Notices]
[Pages 69015-69017]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22268]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106763; File No. SR-LTSE-2026-26]


Self-Regulatory Organizations: Long-Term Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 11.280 Concerning the Resumption of Trading Following a 
Level 3 Market-Wide Circuit Breaker Halt

October 28, 2026.
    Pursuant to the provisions of Section 19(b)(1) under the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on October 23, 2026, Long-Term Stock Exchange, 
Inc. (``LTSE'' or the ``Exchange'') filed with the Securities and 
Exchange Commission (``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\ 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 is filing with the Commission a proposed rule change 
to amend Rule 11.280 (``Market-Wide Circuit Breakers'') 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.
    The text of the proposed rule change is available at the Exchange's 
website at <a href="https://longtermstockexchange.com/">https://longtermstockexchange.com/</a> and at the principal 
office of the Exchange.

II. Self-Regulatory Organization's Statement on 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 self-regulatory organization 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 11.280 (``Market-Wide Circuit 
Breakers'') 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''). Some exchanges 
are planning to offer overnight trading,\3\ and as a result, the 
uniform Level 3 Market Decline rules of each exchange are being 
modified, as explained further below.\4\
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    \3\ See, e.g., Securities Exchange Act Release No. 105532 (May 
21, 2026), 91 FR 31509 (May 27, 2026) (SRNYSEARCA-2026-53) (``NYSE 
Arca 23/5 Trading Notice'').
    \4\ The Exchange does not intend to implement 23/5 Trading at 
this time.
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Background
    The MWCB mechanism under Rule 11.280 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.\5\ Such market-wide circuit breakers provide for trading 
halts in all U.S. cash equity and equities options markets during a 
severe market decline as measured by a single-day decline in the S&P 
500 Index during regular trading hours.
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    \5\ See Securities Exchange Act Release No. 67090 (May 31, 
2012), 77 FR 33531 (June 6, 2012) (SR-BATS2011-038; 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-NASDAQ2011-131; SR-NSX-2011-11; SR-NYSE-2011-48; SR-NYSEAmex-
2011-73; SR-NYSEArca-2011-68; SRPhlx-2011-129) (``MWCB Approval 
Order'').
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    Pursuant to Rule 11.280, 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.
Proposal
    The Exchange now proposes to amend Rule 11.280 to reflect extended 
trading hours under 23/5 Trading. On December 6, 2026, several 
exchanges intend to offer new overnight trading sessions that would be 
available from 9:00 p.m. ET to 4:00 a.m. ET, increasing their hours of 
operation.
    As discussed, consistent with the uniform rules in place across all 
SROs, current Rule 11.280(b)(2) provides that if a Level 3 Market 
Decline occurs at any time during the trading day, the Exchange shall 
halt trading in all stocks on the Exchange for the remainder of the 
trading day. Currently, that means that the earliest that any exchange 
would re-open trading after a Level 3 Market Decline is 4:00 a.m. ET 
the following day, since no SROs are open for trading before 4:00 a.m. 
ET.
    Unless amended, when 23/5 Trading is launched, the current rule's 
reference to halting ``for the remainder of the trading day'' \6\ would 
require SROs participating in 23/5 Trading to reopen trading at an 
earlier time, i.e., 9:00 p.m. ET on the same calendar day, when those 
SROs' systems would generally become available for overnight trading. 
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 any SRO will not resume until 4:00 a.m. 
ET or later on the following trading day, consistent with current 
market practice. This proposed rule change is therefore not intended to 
make any substantive changes to the MWCB mechanism. Rather, the 
proposed rule change would preserve the current resumption time 
following a Level 3 Market Decline.
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    \6\ See Rule 11.280(b)(2).
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    To effect this change, the Exchange proposes to delete the language 
in Rule 11.280(b)(2) that provides that trading in

[[Page 69016]]

all stocks will halt on the Exchange ``for the remainder of the trading 
day'' if a Level 3 Market Decline occurs at any time during the trading 
day, and replace it with new language that explicitly provides that 
trading in all stocks would halt on the Exchange until 4:00 a.m. ET or 
later on the following trading day.
Implementation
    The Exchange plans to implement the proposed rule change on 
December 6, 2026, the date on which several exchanges intend to offer 
new overnight trading sessions that would be available from 9:00 p.m. 
ET to 4:00 a.m. ET.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\7\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\8\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
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    The MWCB mechanism described in Rule 11.280 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, when applied uniformly by all SROs, would ensure that the 
current 4:00 a.m. ET resumption time following a Level 3 halt continues 
to apply under 23/5 Trading, notwithstanding current rule text implying 
that the resumption time would coincide with the start of overnight 
trading on SROs operating an overnight session.
    Rather than leave the rule in place as is, which would result in an 
earlier resumption time than originally contemplated when the rule was 
adopted, the Exchange, the other U.S. equity exchanges, and FINRA met 
alongside industry representatives to determine the appropriate 
resumption time. Following those discussions, the collective decision 
was made to retain the 4:00 a.m. ET resumption time, notwithstanding 
the fact that an earlier resumption time would be possible with the 
introduction of 23/5 Trading. The proposed rule change codifies this 
decision into the Exchange's rules. The Exchange understands that the 
other SROs will also be filing similar proposed rule changes. As a 
result, the market as a whole, including on- and off-exchange, will 
continue to be subject to harmonized rules for the resumption of 
trading following a Level 3 Market Decline.
    While the SROs had previously decided to tie the resumption time 
following a Level 3 halt to the earliest SRO opening time, the upcoming 
transition to 23/5 Trading raises various concerns that warrant a 
change from the current approach.
    First, the Exchange notes that the MWCB mechanism was designed to 
provide a cooling-off period where market participants would be 
provided with additional time to evaluate the market events that led to 
the decline before determining how to position their trading activity 
for the next day. With the introduction of 23/5 Trading and the start 
of overnight trading on some SROs at 9:00 p.m. ET, however, this 
cooling-off period could be materially shortened, reducing one of the 
key benefits that the MWCB mechanism was designed to provide in the 
first place. Rather than shorten the cooling-off period and risk this 
benefit, the Exchange believes the market would be better served by a 
change to the length of the associated trading halt that mirrors 
current market practice. Under the proposed rule, as is the case today, 
after a Level 3 halt, all SROs would re-open trading at 4:00 a.m. ET or 
later, and no SRO would offer an overnight trading session starting on 
the day of a Level 3 halt.
    Second, overnight trading may be subject to different liquidity and 
participation considerations than the current pre-market sessions that 
start at or after 4:00 a.m. ET. Notably, while retail investors have 
expressed interest in overnight trading, the Exchange expects that 
institutional investors will take more time to transition to a round-
the-clock model. However, such institutional participation may be of 
heightened importance following a Level 3 halt, as these investors are 
likely to have views on the underlying market events that led to the 
Level 3 Market Decline in the first place. The Exchange is concerned 
that opening during hours that such participants do not normally trade 
may impact the quality of price discovery at a time of significant 
market volatility. Waiting until 4:00 a.m. ET to resume trading would 
facilitate broader participation and therefore price discovery.
    Finally, the Exchange notes that the Commission recently approved 
an amendment to the Plan to Address Extraordinary Market Volatility 
(``LULD Plan'') that would establish new price protections from 9:00 
p.m. ET to 4:00 a.m. ET.\9\ While these price bands would help to 
assure a fair and orderly market during normal market conditions, it is 
possible that they would instead prevent normal price discovery 
following a Level 3 Market Decline. Rather than allowing trading to 
resume with such price bands in effect, which would represent a change 
from the current trading reopening following a Level 3 Market Decline, 
the Exchange believes that requiring SROs to wait until 4:00 a.m. ET or 
later to resume trading would ensure that price discovery can occur 
unimpeded during pre-market trading, as it does today, which may 
further inform prices going into the opening auction and regular market 
hours trading following a Level 3 halt.
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    \9\ See Securities Exchange Act Release No. 106042 (August 5, 
2026), 91 FR 51515 (August 10, 2026) (Order Granting Approval of the 
Twenty-Seventh Amendment to the National Market System Plan to 
Address Extraordinary Market Volatility to Establish Temporary Price 
Band Protections in Overnight Trading).
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    Given the factors discussed above, the Exchange believes that 
trading in all securities on the Exchange should not resume before 4:00 
a.m. ET on the trading day after a Level 3 halt. This decision, which 
the Exchange understands will also be reflected in the rules of the 
other SROs, would promote a fair and orderly market at a time of 
significant market volatility, and thereby protect investors and the 
public interest. In addition, while the actual Level 3 resumption time 
would not be changing in practice--as proposed, the current resumption 
time and future resumption time would both be 4:00 a.m. ET at the 
earliest--the Exchange believes that it is appropriate to amend its 
rules to ensure that its rules reflect the upcoming changes due to 23/5 
Trading. Without this change, market participants may mistakenly 
believe that the Exchange intends for trading to re-open on overnight 
trading exchanges 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 that is 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.

[[Page 69017]]

securities markets. Further, the Exchange understands that the other 
SROs intend to file proposed rule changes to ensure a consistent 
resumption time at 4:00 a.m. or later ET across markets. Thus, the 
proposed rule change will help to ensure consistency across

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

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) \10\ of the Act and Rule 19b-4(f)(6) \11\ thereunder 
in that it effects a change that: (i) does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file a proposed rule change under 
that subsection at least five business days prior to the date of 
filing, 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 the rule 
change if it appears to the Commission that the action is necessary or 
appropriate in the public interest, for the protection of investors, or 
would otherwise further the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) of the Act \12\ to determine whether the proposed 
rule should be approved or disapproved.
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    \12\ 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#5e2c2b323b733d3133333b302a2d1e2d3b3d70393128"><span class="__cf_email__" data-cfemail="1e6c6b727b337d7173737b706a6d5e6d7b7d30797168">[email&#160;protected]</span></a>. Please include 
file number SR-LTSE-2026-26 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-LTSE-2026-26. 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-LTSE-2026-26 and should be submitted on 
or before November 23, 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. 2026-22268 Filed 10-30-26; 8:45 am]
BILLING CODE 8011-01-P


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