Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 11.271 Regarding the Resumption of Trading Following a Level 3 Market-Wide Circuit Breaker Halt

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<title>Federal Register, Volume 91 Issue 215 (Monday, November 9, 2026)</title>
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[Federal Register Volume 91, Number 215 (Monday, November 9, 2026)]
[Notices]
[Pages 70912-70914]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22752]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106810; File No. SR-IEX-2026-45]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 11.271 Regarding the Resumption of Trading Following a Level 3 
Market-Wide Circuit Breaker Halt

November 4, 2026.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on November 2, 2026, the Investors Exchange LLC (``IEX'' 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

    Pursuant to the provisions of Section 19(b)(1) of the Act,\4\ and 
Rule 19b-4 thereunder,\5\ the Exchange proposes to amend Rule 11.271 
(``Trading Halts Due to Extraordinary Market Volatility'') concerning 
the resumption of trading following a Level 3 market-wide circuit 
breaker halt in connection with the upcoming expansion of trading by 
other national securities exchanges to 23 hours per day, 5 days per 
week. The Exchange has designated this proposal as non-controversial 
pursuant to Section 19(b)(3)(A)(iii) of the Act \6\ and provided the 
Commission with the notice required by Rule 19b-4(f)(6)(iii) 
thereunder.\7\
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available at the Exchange's 
website at <a href="https://www.iex.io/resources/regulation/rule-filings">https://www.iex.io/resources/regulation/rule-filings</a> and at 
the principal office of the Exchange.

II. Self-Regulatory Organization's Statement of the Purpose of, and the 
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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 11.271 (``Trading Halts Due to 
Extraordinary Market Volatility'') concerning the resumption of trading 
following a Level 3 market-wide circuit breaker (``MWCB'') halt in 
connection with the upcoming extension of trading by other national 
securities exchanges to 23 hours per day, 5 days per week. Although 
only some exchanges will offer overnight trading, the uniform Level 3 
MWCB rules of every exchange are being modified, as explained further 
below.
Background
    The MWCB mechanism under Rule 11.271 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.\8\ Currently, market-wide

[[Page 70913]]

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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    \8\ 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''). IEX's MWCB rule has been effective since its 
approval for registration as a national securities exchange in 2016. 
See Securities Exchange Act Release No. 78101 (June 17, 2016), 81 FR 
41142 (June 23, 2016) (File No. 10-222).
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    Pursuant to Rule 11.271, 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. Eastern Time and 
before 3:25 p.m. Eastern Time would halt market-wide trading for 15 
minutes, while a similar market decline at or after 3:25 p.m. Eastern 
Time 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 8:00 a.m. Eastern Time.
Proposal
    The Exchange now proposes to amend Rule 11.271 to reflect the 
upcoming extended trading hours, i.e., 23/5 trading, that other 
exchanges will participate in. When 23/5 trading begins on December 6, 
2026, the Exchange's current trading sessions will not change. The 
Exchange operates three separate trading sessions between 8:00 a.m. 
Eastern Time and 5:00 p.m. Eastern Time. These are the Pre-Market 
Session, which operates from 8:00 a.m. Eastern Time to 9:30 a.m. 
Eastern Time; the Regular Market Session, which operates from 9:30 a.m. 
Eastern Time to 4:00 p.m. Eastern Time; and the Post-Market Session, 
which operates from 4:00 p.m. Eastern Time to 5:00 p.m. Eastern 
Time.\9\ Consistent with the uniform rules in place across all SROs, 
current Rule 11.271(b)(2) provides that if a Level 3 MWCB 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, that means 
that the earliest that any exchange would re-open trading after a Level 
3 MWCB is at 4:00 a.m. Eastern Time the following day, since no SROs 
are open for trading before 4:00 a.m. Eastern Time.
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    \9\ See Rules 1.160(z), (aa), and (gg). The IEX Rule Book uses 
the terms ``Regular Market Hours'' and ``Regular Market Session'' 
interchangeably. See Rule 1.160(gg).
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    Unless amended, when 23/5 trading is launched, the current rule's 
reference to halting ``for the remainder of the trading day'' would 
require SROs participating in 23/5 trading to re-open trading at an 
earlier time, i.e., 9:00 p.m. Eastern Time 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. Eastern Time 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 MWCB.
    To effect this change, the Exchange proposes to delete the language 
in Rule 11.271(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 
MWCB 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. Eastern Time or later on the following 
trading day.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\10\ 
Specifically, the Exchange believes the proposed rule change is 
consistent with Section 6(b)(5) of the Act \11\ 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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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The MWCB mechanism described in Rule 11.271 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. Eastern Time 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. Eastern Time 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 MWCB.
    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 overnight trading on some SROs at 9:00 p.m. Eastern Time, 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. 
Eastern Time 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. Eastern Time. Notably, while retail 
investors have expressed interest in overnight trading, the Exchange 
expects that institutional investors will take more time to

[[Page 70914]]

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 MWCB 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. Eastern Time 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. Eastern Time to 4:00 a.m. Eastern Time.\12\ 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 MWCB. 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 MWCB, the Exchange believes that requiring SROs to wait until 4:00 
a.m. Eastern Time 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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    \12\ 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. Eastern Time 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. Eastern Time 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. Eastern 
Time 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. 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. Eastern Time or later 
across 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

    Written comments were neither solicited nor received.

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

    The Exchange has designated this rule filing as non-controversial 
under Section 19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) 
thereunder.\14\ Because the 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) of the Act and Rule 19b-
4(f)(6) thereunder.\15\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 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 under 
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 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#740601181159171b1919111a0007340711175a131b02"><span class="__cf_email__" data-cfemail="2c5e594049014f4341414942585f6c5f494f024b435a">[email&#160;protected]</span></a>. Please include 
file number SR-IEX-2026-45 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-IEX-2026-45. 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-IEX-2026-45 and should be submitted on 
or before November 30, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22752 Filed 11-6-26; 8:45 am]
BILLING CODE 8011-01-P


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