[Federal Register Volume 91, Number 106 (Wednesday, June 3, 2026)]
[Notices]
[Pages 33238-33249]
From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ]
[FR Doc No: 2026-11038]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105587; File No. SR-CboeEDGX-2026-019]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing of Amendment No. 1 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Amended by Amendment No. 1, To Extend the
Exchange's Trading Hours to 23 Hours per Day, Five Days per Week
May 29, 2026.
On March 31, 2026, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to section 19(b)(1) of the Securities
Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to permit the Exchange to offer trading for equity
securities and exchange traded products 23 hours per day, five days per
week. The proposed rule change was published for comment in the Federal
Register on April 15, 2026.\3\ The Commission received comment on the
Notice and a response from the Exchange.\4\ On May 26, 2026, the
Exchange filed Amendment No. 1 to the proposed rule change, which
superseded the original proposed rule change in its entirety (``Amended
Proposal'').\5\ The Commission is publishing this notice to solicit
comments on Amendment No. 1 from interested persons and is approving
the Amended Proposal, on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 105206 (Apr. 10,
2026), 91 FR 20213 (``Notice'').
\4\ Comments received in response to the proposal can be found
on the Commission's website at https://www.sec.gov/rules-regulations/public-comments/sr-cboeedgx-2026-019 .
\5\ Amendment No. 1 to the proposed rule change contains certain
revisions that clarify when the Exchange would be open for trading,
and to distinguish the terms ``business day'' and ``trading day''
within the context of the Exchange rules related to the 23x5 trading
framework. The full text of Amendment No. 1 can be found on the
Commission's website at https://www.sec.gov/rules-regulations/public-comments/sr-cboeedgx-2026-19 .
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to
amend its rules to permit the trading of equity securities and
Derivative Securities on the Exchange 23 hours per day, five days per
week. The text of the proposed rule change is in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website ( https://www.sec.gov/rules/sro.shtml ), the
Exchange's website ( https://www.cboe.com/us/equities/regulation/rule_filings/bzx/ ), 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
Purpose
This Amendment No. 1 to SR-CboeEDGX-2026-019 amends and replaces in
its entirety the proposal as originally submitted on April 1, 2026
[sic]. The Exchange submits this Amendment No. 1 in order to clarify
[[Page 33239]]
certain points and add additional details to the proposal.
The Exchange proposes to amend its rules to permit the trading of
equity securities and Derivative Securities \6\ on the Exchange 23
hours per day, five days per week (``23x5 Trading'').
---------------------------------------------------------------------------
\6\ See Exchange Rule 1.5(ff).
---------------------------------------------------------------------------
Background
The Exchange's proposal to offer 23x5 Trading is driven both by the
growth in the volume during the Exchange's existing Early Trading
Session, as well as the growing demand for access to the U.S. markets,
particularly by retail investors in the Asia Pacific (``APAC'') region.
The Exchange has consistently heard from APAC broker-dealers that their
retail investors--particularly those in Hong Kong, Japan, Korea,
Singapore, and Australia--want greater access to the U.S. equities
market and that they desire trusted venues that offer transparency,
robust liquidity, and efficient price discovery.\7\
---------------------------------------------------------------------------
\7\ See ``What Does it Take to Offer Around the Clock Equities
Trading?''--Cboe Insights, February 2, 2025, available at: https://www.cboe.com/insights/posts/what-does-it-take-to-offer-around-the-clock-equities-trading/ .
---------------------------------------------------------------------------
The average daily volume (``ADV'') during the Early Trading Session
\8\ across Cboe's U.S. equities exchanges increased 110% from January
2023 to February 2026, and increased 404% between January 2022 and
February 2026.\9\ Cboe's U.S. equities exchanges have also increased
their market share during the Early Trading Session since 2022, with
Early Trading Session ADV increasing 258%\10\ between January 2023 and
February 2026 alone.\11\ The Exchange believes that 23x5 Trading will
further benefit investors and the national market system by increasing
market accessibility, promoting capital formation, and facilitating
portfolio management.
---------------------------------------------------------------------------
\8\ See Exchange Rule 1.5(jj).
\9\ Source: Internal Cboe Data.
\10\ Cboe's market share for the Early Trading Session (i.e.,
4:00 to 7:00 a.m.) trading increased by 305 basis points (``bps'')
from January 2023 to February 2026. Source: Internal Cboe Data.
\11\ Market share increased 33 bps from January 2022 to February
2026. Looking at the full year 2022 against the full year 2025,
market share increased 336 bps. Source: Internal Cboe Data.
---------------------------------------------------------------------------
Currently, Users \12\ may enter orders into the System \13\ from
2:30 a.m. to 8:00 p.m. Eastern Time (``ET'').\14\ The Exchange
currently offers five trading sessions on each day it is open for
trading: (1) the Early Trading Session \15\ (4:00 a.m. to 8:00 a.m.);
(2) the Pre-Opening Session \16\ (8:00 a.m. to 9:30 a.m.); (3) the
Regular Session \17\ (the time between the completion of the Opening
Process or Contingent Open, as defined in Rule 11.7, and 4:00 p.m.);
(4) Regular Trading Hours \18\ (9:30 a.m. to 4:00 p.m.); and (5) the
Post-Closing Session \19\ (4:00 p.m. to 8:00 p.m.). During each
session, orders may be entered, executed, or routed away.\20\
---------------------------------------------------------------------------
\12\ The term ``User'' shall mean any Member or Sponsored
Participant who is authorized to obtain access to the System
pursuant to Rule 11.3. See Rule 1.5(ee).
\13\ The term ``System'' shall mean the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away. See Rule 1.5(cc).
\14\ See Exchange Rule 11.1(a). All times stated herein are in
ET.
\15\ See Rule 1.5(jj).
\16\ See Rule 1.5(s).
\17\ See Rule 1.5(ii).
\18\ The term ``Regular Trading Hours'' means the time between
9:30 a.m. and 4:00 p.m. Eastern Time. See Rule 1.5(y).
\19\ See Rule 1.5(r).
\20\ See Exchange Rule 11.1(a).
---------------------------------------------------------------------------
Under current Rule 11.1(a)(1), the Exchange will not accept the
following orders prior to 4:00 a.m., or prior to 7:00 a.m. for orders
eligible for a ``7:00 a.m. Start'': \21\
---------------------------------------------------------------------------
\21\ An order designated as eligible for execution during the
Early Trading Session beginning at 7:00 a.m. is referred to as a
``7:00 a.m. Start.''
---------------------------------------------------------------------------
orders with a Post Only \22\ instruction;
---------------------------------------------------------------------------
\22\ ``Post Only Orders'' refers to an instruction that may be
attached to an order that is to be ranked and executed on the
Exchange pursuant to Rule 11.9 and Rule 11.10(a)(4) or cancelled, as
appropriate, without routing away to another trading center except
that the order will not remove liquidity from the EDGX Book, except
as described below. An order with a Post Only instruction will
remove contra-side liquidity from the EDGX Book if the order is an
order to buy or sell a security priced below $1.00 or if the value
of such execution when removing liquidity equals or exceeds the
value of such execution if the order instead posted to the EDGX Book
and subsequently provided liquidity, including the applicable fees
charged or rebates provided. To determine at the time of a potential
execution whether the value of such execution when removing
liquidity equals or exceeds the value of such execution if the order
instead posted to the EDGX Book and subsequently provided liquidity,
the Exchange will use the highest possible rebate paid and highest
possible fee charged for such executions on the Exchange. See
Exchange Rule 11.6(n)(4).
---------------------------------------------------------------------------
intermarket sweep orders (``ISOs''); \23\
---------------------------------------------------------------------------
\23\ ``Intermarket Sweep Orders'' or ``ISO'' are orders The
System will accept ISOs (as such term is defined in Regulation NMS).
To be eligible for treatment as an ISO, the order must be: (i) a
Limit Order; (ii) marked ``ISO''; and (iii) the User entering the
order must simultaneously route one or more additional Limit Orders
marked ``ISO,'' if necessary, to away Trading Centers to execute
against the full displayed size of any Protected Quotation for the
security with a price that is superior to the limit price of the ISO
entered in the System. Such orders, if they meet the requirements of
the foregoing sentence, may be executed at one or multiple price
levels in the System without regard to Protected Quotations at away
Trading Centers consistent with Regulation NMS (i.e., may trade
through such quotations). See Exchange Rule 11.8(c).
---------------------------------------------------------------------------
Market Orders \24\ other than those with a time-in-force-
(``TIF'') \25\ instruction of Regular Hours Only (``RHO'') \26\ or a
Stop Price; \27\
---------------------------------------------------------------------------
\24\ ``Market Orders'' are orders to buy or sell a stated amount
of a security that is to be executed at the NBBO or better when the
order reaches the Exchange. See Exchange Rule 11.8(c).
\25\ The term ``Time in Force'' means the period of time that
the System will hold an order. See Rule 2.1(f).
\26\ The term ``Regular Hours Only'' (``RHO'') means an
instruction a User may attach to an order designating it for
execution only during Regular Trading Hours, which includes the
Opening Process and Re-Opening Process following a halt suspension
or pause. See Rule 11.6(q)(6).
\27\ An order may include a ``Stop Price'' which will convert
the order into a Market Order when the Stop Price is triggered. An
order to buy converts to a Market Order when the consolidated last
sale in the security occurs at, or above, the specified Stop Price.
An order to sell converts into a Market Order when the consolidated
last sale in the security occurs at, or below, the specified Stop
Price. See Rule 11.8(a)(1).
---------------------------------------------------------------------------
orders with a Minimum Execution Quantity \28\ instruction
that also include a TIF instruction of RHO, and all orders with a TIF
instruction of Immediate-or-Cancel (``IOC'') \29\ or Fill-or-kill
(``FOK'').\30\
---------------------------------------------------------------------------
\28\ ``Minimum Execution Quantity'' is an instruction a User may
attach to an order with a Non-Displayed instruction or a Time-in-
Force of Immediate-or-Cancel requiring the System to execute the
order only to the extent that a minimum quantity can be satisfied.
See Rule 11.6(h)
\29\ ``Immediate Or Cancel'' or ``IOC'' refers to an instruction
the User may attach to an order stating the order is to be executed
in whole or in part as soon as such order is received. The portion
not executed immediately on the Exchange or another trading center
is treated as cancelled and is not posted to the EDGX Book. An order
with an IOC instruction that does not include a Book Only
instruction and that cannot be executed in accordance with Rule
11.10(a)(4) on the System when reaching the Exchange will be
eligible for routing away pursuant to Rule 11.11.See Rule
11.6(q)(1).
\30\ ``Fill-or-Kill'' or ``FOK'' refers to an instruction the
User may attach to an order stating that the order is to be executed
in its entirety as soon as it is received and, if not so executed,
cancelled. An order with a FOK instruction is not eligible for
routing away pursuant to Rule 11.11. See Rule 11.6(q)(3).
---------------------------------------------------------------------------
Certain order types are also subject to session-specific
restriction. For example, orders with a Post Only instruction and ISOs
are not accepted for queueing during the Pre-Opening Session if
designated with a TIF instruction of RHO. To accommodate 23x5 Trading,
the Exchange proposes to extend the order entry window and introduce a
new Overnight Trading Session, along with conforming amendments to its
session-specific order handling rules, as described below.
Proposal
The Exchange proposes to amend its rules to enable 23x5 Trading by
expanding the Pre-Opening Session and
[[Page 33240]]
replacing the Early Trading Session with a new Overnight Trading
Session.
Definitions
The Exchange proposes to amend and adopt certain definitions
provided in Exchange Rule 1.5.
First, the Exchange proposes to expand the Pre-Opening Session
under Rule 1.5(s) from 8:00 a.m. to 4:00 a.m., covering the period from
4:00 a.m. to 9:30 a.m. Because this expansion absorbs the period
currently covered by the Early Trading Session under Rule 1.5(jj), the
Exchange also proposes to delete the ``Early Trading Session''
definition and replace it with a new defined term, ``Overnight Trading
Session.''
As proposed, the Overnight Trading Session shall mean the time
between 9:00 p.m. on any night preceding a business day \31\ and 4:00
a.m. on the following calendar day. Rather than defining the Overnight
Trading Session by reference to specific calendar days of the week
(e.g., Sunday through Thursday), the proposed definition is anchored to
the concept of a ``night preceding a business day.'' This approach
provides that the Overnight Trading Session is triggered by the
existence of an upcoming trading day rather than by enumeration of
calendar days, providing a more durable and flexible framework that is
consistent with the Exchange's proposed Order Acceptance Queueing Time
definition in proposed Rule 1.5(kk), as discussed below, and that
accommodates changes to the Exchange's trading calendar (including
holidays and other non-business days) without requiring conforming
amendments to the session definition itself. For example, when a
holiday falls on a Monday, there is no night preceding a business day
on the prior Sunday and therefore no Overnight Trading Session will
commence that Sunday evening, consistent with the Exchange's proposed
holiday schedule under Rule 11.1(b). As discussed further below under
``Contingency on Industry Readiness,'' the Exchange shall not commence
operation of the Overnight Trading Session until specified Equity Data
Plan readiness conditions have been satisfied. The proposed term would
provide ``Overnight Trading Session'' shall mean the time between 9:00
p.m. on any night preceding a business day, as provided in Rule
11.1(b), and 4:00 a.m. Eastern Time on the following calendar day. For
the avoidance of doubt, notwithstanding anything to the contrary in
these Rules, the Exchange shall not commence operation of the Overnight
Trading Session unless the Equity Data Plans (1) have established a
mechanism to collect, consolidate, process and disseminate quotation
and transaction information at all times during the Overnight Trading
Session that is equivalent to the mechanism established for Exchange
trading hours during Regular Trading Hours, and (2) have provided the
Exchange with notification that they are prepared to collect,
consolidate, process and disseminate quotation and transaction
information to accommodate the Overnight Trading Session. Prior to
commencing operation during the Overnight Trading 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 Overnight Trading
Session and that such Equity Data Plans are prepared to collect,
consolidate, process and disseminate quotation and transaction
information at all times during the Overnight Trading Session
(``Overnight Trading Session Proposed Rule Change''). If the Overnight
Trading 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 Overnight Trading Session.
---------------------------------------------------------------------------
\31\ See proposed Rule 11.1(b). A business day is any day the
Exchange is open for trading, which includes any Monday, Tuesday,
Wednesday, Thursday, and Friday, other than a holiday.
---------------------------------------------------------------------------
Second, proposed Rule 1.5(kk) would define ``Order Acceptance
Queueing Time'' to mean 8:55 p.m., the time at which orders may be
entered into the System on each night preceding a business day as
specified in Rule 11.1(b). The Order Acceptance Queueing Time marks the
point at which the System begins accepting orders each night in advance
of the Overnight Trading Session. Orders entered during the Order
Acceptance Queueing Time will queue until the official start of the
session designated in the order instruction.
Third, proposed Rule 1.5(ll) would define ``Equity Data Plans'' to
mean the effective national market system plan(s) governing the
collection, consolidation, processing, and dissemination of
consolidated equity market data via the exclusive securities
information processors (``SIPs''), including: (1) the Consolidated Tape
Association Plan (``CTA Plan''); (2) the Consolidated Quotation Plan
(``CQ Plan''); (3) the Joint Self-Regulatory Organization Plan
Governing the Collection, Consolidation and Dissemination of Quotation
and Transaction Information for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading Privileges Basis (``UTP Plan''); (4)
the CT Plan established by the Limited Liability Company Agreement of
CT Plan LLC; and (5) any successor to the named Plan(s).
Finally, the Exchange proposes a non-substantive amendment to Rule
1.5(ii) to correct a typographical error, changing the word
``Continent'' to ``Contingent.'' As amended, Rule 1.5(ii) would define
the Regular Session as ``the time between the completion of the Opening
Process or Contingent Open as defined in Rule 11.7 and 4:00 p.m.
Eastern Time.''
Trading Rules
The Exchange proposes to amend Rules 11.1 (Hours of Trading and
Trading Days), 11.6 (Definitions), 11.7 (Opening Process), 11.8 (Order
Types), 11.10 (Order Execution), 11.15 (Clearly Erroneous Executions)
and to adopt Rule 11.25 (Weekday Trading Pauses) to reflect necessary
updates to provide for 23x5 trading functionality.
a. Rule 11.1--Hours of Trading and Trading Days
The Exchange proposes to amend Rule 11.1(a) to replace reference to
the Early Trading Session with the Overnight Trading Session, and to
amend Rule 11.1(a)(1) to update the order entry window and session
eligibility framework to accommodate 23x5 Trading.
Under current Rule 11.1(a)(1), Users may enter orders into the
System beginning at 2:30 a.m. Orders entered between 2:30 a.m. and 4:00
a.m. are not eligible for execution until the start of the Early
Trading Session, Pre-Opening Session, or Regular Trading Hours,
depending on the TIF instruction selected. The current rule also
provides for two start times within the Early Trading Session (a 4:00
a.m. Start and a 7:00 a.m. Start) each with distinct order acceptance
restrictions.
The Exchange proposes to replace this framework with a streamlined
structure that reflects the introduction of the Overnight Trading
Session and the expanded order entry window. As proposed, Users may
enter orders into the System beginning at the Order Acceptance Queueing
Time (8:55 p.m.) on each night preceding a business day through 8:00
p.m. on the same trading
[[Page 33241]]
day.\32\ Orders entered during the Order Acceptance Queueing Time will
queue until the official start of the session designated in the order
instruction. This approach applies uniformly across all trading
sessions (i.e., the Overnight Trading Session, Pre-Opening Session,
Regular Session, and Post-Closing Session) providing Members with a
consistent and simplified order entry experience. The 4:00 a.m. Start
and 7:00 a.m. Start construct is removed, as these designations are no
longer necessary under the proposed framework.
---------------------------------------------------------------------------
\32\ A ``trading day'' refers to the 23-hour period commencing
at 9:00 p.m. ET on one calendar day and ending at 8:00 p.m. ET on
the next calendar day for the period from Sunday at 9:00 p.m. ET
through Friday at 8:00 p.m. ET.
---------------------------------------------------------------------------
Proposed Rule 11.1(a)(2) would provide that an order is eligible to
participate in the designated trading session(s) only and may remain in
effect for one or more consecutive trading sessions on a particular
day. An order designated for a session that has not yet begun will be
accepted into the System but will not be eligible to trade until that
session commences. An order designated solely for a session that has
already ended will be rejected. An order entered without a trading
session designation will default to a Day \33\ order, making it
eligible to participate from the Overnight Trading Session through the
end of Regular Trading Hours. Proposed Rule 11.1(a)(2) also permits
Members to designate a specific Start Time for their orders in thirty-
minute increments prior to the start of Regular Trading Hours,
replacing the 4:00 a.m. Start and 7:00 a.m. Start designations with a
more flexible and uniform framework. Start Times must be set to a time
prior to the commencement of Regular Trading Hours and may not be
designated during Regular Trading Hours. At each Start Time, orders
will be handled in time sequence beginning with the oldest time stamp,
and will be placed on the EDGX Book, routed, cancelled, or executed in
accordance with the terms of the order.
---------------------------------------------------------------------------
\33\ An instruction the User may attach to an order stating that
an order to buy or sell which, if not executed, expires at the end
of Regular Trading Hours. Any Day Order entered into the System
before the opening for business on the Exchange as determined
pursuant to Rule 11.1, or after the closing of Regular Trading
Hours, will be rejected. See Exchange Rule 11.6(q)(2).
---------------------------------------------------------------------------
Proposed Rule 11.1(a)(3) would specify the orders the Exchange will
not accept during the Order Acceptance Queueing Time: (i) orders with a
Post Only instruction; (ii) ISOs; (iii) Market Orders, other than those
with a TIF instruction of RHO or a Stop Price; \34\ (iv) orders with a
Minimum Execution Quantity instruction that also include a TIF
instruction of RHO; and (v) orders with a TIF instruction of IOC or
FOK. These restrictions are consistent with the order type limitations
currently applicable prior to the pre-market sessions and are intended
to ensure orderly trading prior to the commencement of the Overnight
Trading Session.
---------------------------------------------------------------------------
\34\ Once the trigger price is reached during Regular Trading
Hours, the order will be elected (activated). Election results in a
Market order sent to the book. See Cboe Titanium U.S. Equities FIX
Specification, at 61, available at https://cdn.cboe.com/resources/membership/Cboe_US_Equities_FIX_Specification.pdf .
---------------------------------------------------------------------------
The Exchange also proposes to amend Rule 11.1(b) to define
``business day'' and to specify the days on which the Exchange will be
open for trading under the proposed 23x5 framework. A business day is
any day the Exchange is open for trading, which includes any Monday,
Tuesday, Wednesday, Thursday, and Friday, other than a holiday listed
below. The Exchange will not be open for business on the following
holidays: New Year's Day, Dr. Martin Luther King Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Juneteenth National Independence Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. When
a holiday falls on a Saturday, the Exchange will not be open for
business on the preceding Friday. When a holiday falls on a Sunday, the
Exchange will not be open for business on the following Monday, unless
otherwise indicated by the Exchange. On days when the Exchange closes
early (``Early Market Close''), Regular Trading Hours will be from 9:30
a.m. to 1:00 p.m. and the Post-Closing Session will be from 1:00 p.m.
to 5:00 p.m. Trading shall resume with the Overnight Trading Session on
any night preceding a business day. The Exchange also proposes to amend
Rule 11.1(b) to provide that the Exchange will be open for the
transaction of business on each business day, including the Overnight
Trading Session on the preceding calendar day.
Under the proposed 23x5 framework, the trading day will be
structured as follows. The Overnight Trading Session will run from 9:00
p.m. to 4:00 a.m., followed by the Pre-Opening Session from 4:00 a.m.
to 9:30 a.m., Regular Trading Hours from 9:30 a.m. to 4:00 p.m., and
the Post-Closing Session from 4:00 p.m. to 8:00 p.m. Between 8:00 p.m.
and 9:00 p.m. each weekday, the Exchange will pause trading to conduct
maintenance, testing, and processing of corporate actions (such as
mergers, stock splits, and dividends) that become effective the
following trading day. This pause also provides market participants
with time to process and clear trades before the start of a new trading
day. For dates on which the Exchange is not open for business under
Rule 11.1(b), the market closure will be effective at 8:00 p.m. on the
calendar day preceding the closure date. For Early Market Close
days,\35\ the closure will instead be effective at 5:00 p.m. on the
calendar day preceding the closure date. In either case, the Exchange
will re-open at 9:00 p.m. on the closure date, unless the closure date
is immediately followed by a non-business day, in which case the
Exchange will re-open at 9:00 p.m. on the day preceding the next
business day.
---------------------------------------------------------------------------
\35\ Regular trading hours for days when the markets close early
are typically 9:30 a.m. to 1:00 p.m. See e.g., Thanksgiving Early
Close and Christmas Early Close at https://www.cboe.com/about/hours .
---------------------------------------------------------------------------
b. Rule 11.6(q)(2)--TIF Day Instructions
The Exchange does not propose any changes to its existing TIF
instructions in connection with the Overnight Trading Session, with one
exception described below. The Exchange believes the existing TIF
framework otherwise accommodates the proposed 23x5 structure without
modification.
The Exchange proposes a conforming amendment to the Day order TIF
definition to permit acceptance of Day Orders during the Overnight
Trading Session. Under the current definition, a Day Order entered
``after the closing of Regular Trading Hours'' is rejected. Because the
Overnight Trading Session commences at 9:00 p.m. the current definition
would, as written, result in the rejection of Day Orders entered during
the Overnight Trading Session or during the Order Acceptance Queueing
Time preceding it. This outcome is inconsistent with the proposed 23x5
framework, under which Day Orders should be eligible for entry
beginning at the Order Acceptance Queueing Time and should remain
eligible for execution throughout the Overnight Trading Session, Pre-
Opening Session, and Regular Trading Hours. Accordingly, the Exchange
proposes to amend the Day order TIF definition to provide that a Day
Order entered during the Overnight Trading Session or during the Order
Acceptance Queueing Time will be accepted by the Exchange and, if not
executed, will expire at the end of Regular Trading Hours on the
following business day. This amendment is limited to conforming the Day
order definition to the expanded order entry window introduced by the
proposed 23x5 framework and does not alter any other aspect of the Day
order TIF instruction. For the avoidance of doubt,
[[Page 33242]]
orders will expire on the trading day for which they are entered; as
described above, a trading day is deemed to begin at 9:00 p.m. Eastern
Time on the preceding calendar day.
As amended, a Day Order entered at 9:00 p.m. on a day preceding a
business day will remain eligible for execution throughout the
Overnight Trading Session, Pre-Opening Session, and Regular Trading
Hours on that business day, expiring at 4:00 p.m. Eastern Time that
trading day.
c. Rule 11.7--Opening Process
The Exchange proposes a conforming amendment to Rule 11.7 to
replace the reference to the Early Trading Session with the Overnight
Trading Session in the provision governing re-openings after a halt. As
amended, during the Overnight Trading Session, Pre-Opening Session, or
Post-Closing Session, the Re-Opening Process will occur at the midpoint
of the NBBO after one second has passed following the applicable
resumption trigger. This change is non-substantive and is intended
solely to reflect the replacement of the Early Trading Session with the
Overnight Trading Session under the proposed 23x5 framework.
d. Rule 11.8--Order Types
The Exchange proposes conforming amendments to Rule 11.8 to replace
references to the Early Trading Session with the Overnight Trading
Session across each order type that currently specifies session
eligibility, including Limit Orders, ISOs, MidPoint Peg Orders,\36\
Market Maker Peg Orders,\37\ Supplemental Peg Orders,\38\ and MidPoint
Discretionary Orders.\39\
---------------------------------------------------------------------------
\36\ See Exchange Rule 11.8(d).
\37\ See Exchange Rule 11.8(e).
\38\ See Exchange Rule 11.8(f).
\39\ See Exchange Rule 11.8(g). A Market Order is only eligible
for execution by the System during the Regular Session. See Exchange
Rule 11.8(a)(5).
---------------------------------------------------------------------------
Outside of Regular Trading Hours, only Limit Orders are eligible
for execution. Under proposed Rule 11.8(a)(6), a Limit Order may be
eligible for execution during the Overnight Trading Session, Pre-
Opening Session, Regular Session, Regular Trading Hours, and the Post-
Closing Session. This is consistent with the other order types eligible
outside of Regular Trading Hours; ISOs must be Limit Orders by
definition, and Market Maker Peg Orders, Supplemental Peg Orders, and
MidPoint Discretionary Orders are each expressly defined as or
characterized as Limit Orders under their respective provisions.
Limit MidPoint Peg Orders, which are capped with respect to price,
may be executed during the Overnight Trading Session, Pre-Opening
Session, Regular Trading Hours, and the Post-Closing Session, while
Market MidPoint Peg Orders, which are uncapped with respect to price,
may only be executed during Regular Trading Hours. Because a Market
MidPoint Peg Order carries no price cap, it presents heightened
execution risk in extended hours sessions where liquidity conditions
may differ materially from those present during Regular Trading Hours
and where the NBBO may be wider or less reliable. Without a limit price
to constrain execution, a Market MidPoint Peg Order could execute at a
price that is disadvantageous to the submitting party in a manner that
is less likely to occur during Regular Trading Hours. By contrast,
Limit MidPoint Peg Orders have a price cap and are non-displayed, which
the Exchange views as sufficient safeguards to make them suitable for
execution outside of Regular Trading Hours, consistent with the broader
principle that only Limit Orders are eligible for execution outside of
Regular Trading Hours under the proposed 23x5 framework. Proposed Rule
11.8(d)(4) also provides that a Minimum Execution Quantity instruction
on a MidPoint Peg Order will not be applied during the Opening Process.
Additionally, proposed Rule 11.8(d)(4) replaces the reference to the
Early Trading Session with the Overnight Trading Session, conforming
MidPoint Peg Order session eligibility to the proposed 23x5 framework.
The Exchange also proposes to amend Rule 11.8(e)(7) to replace the
reference to the Early Trading Session with the Overnight Trading
Session for Market Maker Peg Orders. As amended, Users may submit
Market Maker Peg Orders to the Exchange starting at the beginning of
the Overnight Trading Session, though such orders will not be
executable or automatically priced until after the commencement of
Regular Session. All remaining amendments to Rule 11.8 (including those
applicable to ISOs, Supplemental Peg Orders, and MidPoint Discretionary
Orders) are non-substantive and are intended solely to conform existing
session eligibility provisions to the proposed 23x5 framework by
replacing references to the Early Trading Session with the Overnight
Trading Session.
e. Rule 11.10--Order Execution
The Exchange proposes a conforming amendment to Rule 11.10 to
replace the reference to the Early Trading Session with the Overnight
Trading Session in the provision governing compliance with Regulation
NMS. As amended, for any execution to occur during the Overnight
Trading Session, Pre-Opening Session, or Post-Closing Session, the
price must be equal to or better than the highest bid or lowest offer
in the EDGX Book or as disseminated by the responsible single plan
processor, unless the order is marked ISO or a Protected Bid is
crossing a Protected Offer. This amendment is non-substantive and
preserves the existing execution standard applicable outside of Regular
Trading Hours.
f. Rule 11.15--Clearly Erroneous Executions
The Exchange proposes conforming amendments to Rule 11.15 to
replace all references to the Early Trading Session with the Overnight
Trading Session throughout the clearly erroneous execution framework.
These amendments appear in the provisions governing review of
transactions occurring outside of Regular Trading Hours, including the
numerical guidelines table, the Multi-Stock Event provisions, the
additional factors provision, the Outlier Transaction provision, the
Reference Price provision, and the Officer Acting On Own Motion
provision. In each case, the amendment substitutes ``Overnight Trading
Session'' for ``Early Trading Session'' without altering the
substantive standards or procedures applicable to clearly erroneous
execution reviews. The Exchange notes that the numerical guidelines
applicable to the Overnight Trading Session, Pre-Opening Session, and
Post-Closing Session will remain the same as those currently applicable
to the Early Trading Session, Pre-Opening Session, and Post-Closing
Session, reflecting the Exchange's view that the same heightened
thresholds appropriate for extended hours trading remain appropriate
for the Overnight Trading Session.
g. Rule 11.25--Weekday Trading Pause
The Exchange proposes to adopt new Rule 11.25 to govern the daily
trading pause that will occur between the close of the Post-Closing
Session and the commencement of the Overnight Trading Session on each
weekday. As proposed, the Exchange will pause trading at the conclusion
of the Post-Closing Session at 8:00 p.m. and resume trading with the
commencement of the Overnight Trading Session at 9:00 p.m. on the day
preceding the next business day. This one-hour pause is intended to
provide the Exchange with time to conduct necessary maintenance and
testing, and to process corporate actions, such as mergers, stock
splits, and
[[Page 33243]]
dividends, that become effective the following trading day. The pause
also provides market participants with time to process and clear trades
before the start of a new trading day.
Proposed Rule 11.25(a)(1) provides that all orders outstanding on
the EDGX Book as of 8:00 p.m. at the end of the Post-Closing Session
will be cancelled. The Exchange believes it is appropriate to cancel
all resting orders at the close of the Post-Closing Session each
weekday to ensure that orders are not carried over into the next
trading day without an explicit order instruction by a Member. This
approach provides Members with a clean start to each trading day and
reduces the risk of unintended executions based on stale order
instructions.
Proposed Rule 11.25(a)(2) provides that the Exchange will begin
accepting orders again at the Order Acceptance Queueing Time (i.e.,
8:55 p.m.) and will continue accepting orders through 8:00 p.m. on the
following calendar day, provided the next calendar day is a business
day. Orders entered during the Order Acceptance Queueing Time will
queue until the commencement of the Overnight Trading Session at 9:00
p.m. Proposed Rule 11.25(a)(2) also provides that trades occurring at
or after the commencement of the Overnight Trading Session at 9:00 p.m.
will be assigned a trade date of the following calendar day, reflecting
that the Overnight Trading Session economically belongs to the next
trading day even though it commences the prior evening.
The Exchange notes that while the Order Acceptance Queueing Time
applies on Sunday prior to the commencement of the Overnight Trading
Session at 9:00 p.m., the one-hour trading pause described in Rule
11.25(a) does not apply on Sunday. Unlike Monday through Thursday,
where trading pauses at 8:00 p.m. following the close of the Post-
Closing Session and resumes at 9:00 p.m., Sunday does not follow a
Post-Closing Session and therefore there is no intervening pause
period. The Exchange will begin accepting orders at the Order
Acceptance Queueing Time on Sunday evening and the Overnight Trading
Session will commence at 9:00 p.m., marking the start of the trading
week. The Exchange believes this distinction is appropriate because the
operational and processing considerations that necessitate a pause
between the Post-Closing Session and the Overnight Trading Session on
weekdays, such as processing corporate actions and clearing end-of-day
positions, are not present on Sunday.
Unlisted Trading Privileges
The Exchange proposes conforming amendments to Rule 14.1 to replace
references to the Early Trading Session with the Overnight Trading
Session. Specifically, the Exchange proposes to amend Rule 14.1(c)(1)
to replace the reference to the ``Early Trading Session (7:00 a.m.-8:00
a.m. Eastern Time)'' with the ``Overnight Trading Session (9:00 p.m.-
4:00 a.m. Eastern Time).'' The Exchange also proposes conforming
amendments to Interpretations and Policies .01(a) and .01(b)(2) to
replace each reference to the ``Early Trading Session'' with the
``Overnight Trading Session.'' These amendments are non-substantive and
are intended solely to conform the unlisted trading privileges
framework to the proposed 23x5 session structure by updating the
applicable session nomenclature and hours.
Risk Disclosures
The Exchange proposes to adopt new Rule 3.21(h) to establish
tailored customer disclosure obligations specific to the Overnight
Trading Session and Pre-Opening Session. The existing customer
disclosure framework under Rule 3.21 requires Members to disclose the
material trading risks associated with extended hours trading prior to
accepting an order for execution in those sessions. The Exchange
believes that the unique characteristics of the Overnight Trading
Session and Pre-Opening Session (including the hours during which they
operate, the market conditions that may be present, and the novel
nature of overnight exchange trading) warrant additional disclosures
beyond those currently required for other extended hours sessions.
Proposed Rule 3.21(h) sets forth seven categories of risks that Members
must disclose to customers in connection with trading during the
Overnight Trading Session and Pre-Opening Session.
First, proposed Rule 3.21(h)(1) addresses the risk of trading
during hours in which primary listing markets may not be open. Unlike
the Post-Closing Session, which occurs in close proximity to Regular
Trading Hours, the Overnight Trading Session and Pre-Opening Session
operate during hours in which primary listing exchanges may not be
conducting their own trading, regulatory surveillance, or other
regulatory functions with respect to their listed securities. The
Exchange believes it is important that customers understand that the
regulatory infrastructure ordinarily provided by primary listing
exchanges may not be available during these sessions.
Second, proposed Rule 3.21(h)(2) addresses the risk that regulatory
protections available during the Overnight Trading Session and Pre-
Opening Session may be more limited or different than those available
during Regular Trading Hours. For example, certain volatility control
mechanisms applicable to individual symbols and the broader equities
market may not be available during the Overnight Trading Session and
Pre-Opening Session. The Exchange believes customers should be informed
of these potential gaps in regulatory protections before trading during
these sessions.
Third, proposed Rule 3.21(h)(3) addresses the risk arising from
limited trading alternatives during the Overnight Trading Session and
Pre-Opening Session. Because the Exchange may be the only exchange
trading certain securities during these hours, customers may face
greater exposure to losses in the event of systems failures or other
operational issues on the Exchange, as alternative execution venues may
not be available.
Fourth, proposed Rule 3.21(h)(4) addresses the risks associated
with near-continuous trading under the 23x5 framework. With the
implementation of the Overnight Trading Session, trading on the
Exchange will occur on a near-continuous basis throughout the week,
with only limited breaks. This structure may present heightened risks
related to system maintenance and testing, as well as the pausing and
resumption of trading, as there will be fewer extended breaks during
which such activities can be conducted without impacting market
participants.
Fifth, proposed Rule 3.21(h)(5) addresses the risk of trading
during hours in which financial market infrastructure companies are
closed. Certain important financial market infrastructure providers,
including other markets, banks, Fedwire Funds Service, and certain
other providers of settlement services, may be closed during the
Overnight Trading Session and Pre-Opening Session. Trading during hours
in which the relevant clearing agency and other settlement service
providers are closed may result in an increased passage of time between
the execution of a transaction and its final settlement, which may
expose customers to additional counterparty and settlement risk.
Sixth, proposed Rule 3.21(h)(6) addresses the risk arising from the
novel nature of overnight exchange trading. Exchange-facilitated
trading during overnight hours is a relatively new development in the
U.S. equities market, and as such, the Overnight
[[Page 33244]]
Trading Session may present unforeseen risks that are not yet fully
understood or anticipated. The Exchange believes it is appropriate to
specifically call out the novelty of the Overnight Trading Session so
that customers can make informed decisions about whether overnight
trading is appropriate for them.
Seventh, proposed Rule 3.21(h)(7) provides a general catch-all
disclosure acknowledging that the Overnight Trading Session and Pre-
Opening Session may present additional unforeseen risks beyond those
specifically enumerated in proposed Rule 3.21(h)(1) through (6). The
Exchange believes this provision is appropriate given the evolving
nature of extended hours trading and the potential for market
conditions or operational circumstances that cannot be fully
anticipated at this time.
The Exchange believes that the proposed disclosures under Rule
3.21(h) are necessary and appropriate to ensure that customers are
fully informed of the unique risks presented by the Overnight Trading
Session and Pre-Opening Session prior to participating in trading
during those hours. The proposed disclosures are consistent with the
customer protection principles underlying the existing Rule 3.21
framework and reflect the Exchange's commitment to investor protection
in connection with the expansion of its trading hours under the
proposed 23x5 framework.
Protections
The implementation of 23x5 Trading represents an extension of
trading hours rather than a fundamental restructuring of Exchange
operations or rules. With the exception of the specific amendments
discussed above, the Exchange's operational processes, rule text, and
surveillance programs will continue to apply in the same manner as they
do today. The following EDGX rules and system features will remain
unchanged and will apply in full during the Overnight Trading Session:
Order Types and Order Execution; Membership Rules and Rules of Fair
Practice; Market Maker Obligations and Priority of Orders; Trading
Practice Rules and Disciplinary Rules and Enforcement; Opening and
Closing Crosses; Clearly Erroneous Execution Protections; and Risk
Settings and Fat Finger Protections.
With respect to trading halts, the Exchange's existing halt rules
will apply during the Overnight Trading Session. Consistent with
current practice during other extended hours sessions, the Exchange
will halt trading in a security during the Overnight Trading Session to
the extent required to follow a halt imposed by the primary listing
exchange for that security. To the extent a security is subject to a
regulatory halt, news dissemination halt, or other trading pause
imposed by the primary listing exchange or a national securities
regulator, the Exchange will halt trading in that security consistent
with applicable rules and regulatory requirements.
The Exchange's clearly erroneous execution rules under Rule 11.15
will apply in full during the Overnight Trading Session, as they
currently apply during the Early Trading Session and other extended
hours sessions. No substantive changes to those rules are proposed in
connection with this filing. As such, the Exchange's Clearly Erroneous
rules will continue to mirror those adopted by each national security
exchange and will continue to ensure that there are consistent
standards across each exchange for breaking trades, and continuing to
promote the orderly and efficient operation of the equities markets.
The Exchange's existing surveillance programs and compliance
infrastructure will likewise apply fully to trading in the Overnight
Trading Session and the modified Pre-Opening Session. The Exchange
currently operates a comprehensive regulatory program applicable to the
Early Trading Session, Pre-Opening Session, Regular Trading Hours, and
Post-Closing Session, encompassing a suite of automated trade
surveillance tools, routine Member examinations, and an exam-based
regulatory program. This regulatory program will extend to the
Overnight Trading Session without modification, ensuring that Members
trading during overnight hours are subject to the same level of
oversight applicable to trading in other sessions.
Similarly, the Exchange's existing risk settings and controls
(including single-order price and size protections and other fat finger
safeguards) will remain available and operative during the Overnight
Trading Session. The Exchange believes that these existing protections,
taken together, provide a robust framework for managing risk during
overnight trading that is consistent with the protections available
during other extended hours sessions.
Contingency on Industry Readiness
As noted above, the Exchange will not implement its proposed rule
changes or commence operation of the Overnight Trading Session until
the Equity Data Plan readiness conditions set forth in proposed Rule
1.5(jj) have been satisfied. Prior to commencing operation of the
Overnight Trading Session, the Exchange will file a proposed rule
change pursuant to Section 19(b) of the Exchange Act and the rules
thereunder confirming that: (i) the Exchange is able to comply with its
obligations under the Exchange Act and the rules thereunder during the
Overnight Trading Session; and (ii) the Equity Data Plans are prepared
to collect, consolidate, process, and disseminate quotation and
transaction information at all times during the Overnight Trading
Session. Upon satisfaction of the foregoing conditions, the Exchange
will announce via Exchange notice the implementation date for its
proposed rule changes and the go-live date for 23x5 Trading. If the
Overnight Trading 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
applicable to the Overnight Trading Session.
Impact on Fees
Any impact of the Exchange's 23x5 proposal on its fee schedule will
be addressed in a subsequent fee filing.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\40\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \41\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and 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.
---------------------------------------------------------------------------
\40\ 15 U.S.C. 78f(b).
\41\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
23x5 Trading Framework
The Exchange believes the proposed rule change is consistent with
the Act because it would remove impediments to and perfect the
mechanism of a free and open market and a national market system by
providing a rules framework to support 23x5 Trading. As described
above, the Exchange has observed
[[Page 33245]]
sustained and significant growth in Early Trading Session volume, with
average daily volume across Cboe's U.S. equities exchanges increasing
404% between January 2022 and February 2026. The Exchange has also
received consistent feedback from APAC broker-dealers that their retail
investors desire greater access to the U.S. equities market during
their local business hours. The Exchange believes that 23x5 Trading
will benefit investors and the national market system by increasing
market accessibility, promoting capital formation, and facilitating
portfolio management, including for the growing number of retail
investors in the Asia-Pacific region whose local business hours do not
coincide with U.S. Regular Trading Hours.
The Exchange further believes the proposal is consistent with the
Act because the proposed Overnight Trading Session and the modified
Pre-Opening Session will operate in substantially the same manner as
the Exchange's existing extended hours sessions. All order types,
execution processes, membership rules, market maker obligations,
priority rules, disciplinary rules, clearly erroneous execution
protections, risk settings, and fat finger safeguards applicable to the
Exchange's existing sessions will continue to apply in full during the
Overnight Trading Session and the expanded Pre-Opening Session. The
Exchange believes that applying its existing operational and regulatory
framework to the Overnight Trading Session is consistent with the Act's
goals of ensuring market integrity, investor protection, and fair and
orderly trading. The Exchange represents that its systems have the
capacity to accommodate the proposed 23x5 Trading functionality.
Session Definitions and Order Entry Framework
The Exchange believes that the proposed new definitions, including
the Overnight Trading Session, Order Acceptance Queueing Time, and
Equity Data Plans, would remove impediments to and perfect the
mechanism of a free and open market and a national market system by
adding clarity and transparency to the Exchange's rules. The proposed
Overnight Trading Session definition, anchored to the concept of a
``night preceding a business day'' rather than enumerated calendar
days, provides a durable and flexible framework that accommodates the
Exchange's trading calendar without requiring recurring conforming
amendments. The proposed Order Acceptance Queueing Time definition
similarly adds clarity by establishing a defined, consistent time at
which the System begins accepting orders ahead of the Overnight Trading
Session each weekday evening and on Sunday nights. The Exchange
believes these definitional additions facilitate the understanding of
and compliance with Exchange rules, thereby removing potential
confusion and promoting just and equitable principles of trade.
The Exchange believes the proposed streamlined order entry
framework under Rule 11.1(a) similarly removes impediments to the
mechanism of a free and open market by replacing the existing 4:00 a.m.
Start and 7:00 a.m. Start construct with a uniform structure applicable
across all trading sessions. The proposed trading session designation
requirement under Rule 11.1(a)(2) promotes transparency and investor
protection by ensuring that each order is clearly designated for the
session(s) in which it will remain eligible to participate, consistent
with the approach taken by other national securities exchanges that
have adopted or sought to adopt extended overnight trading
frameworks.\42\
---------------------------------------------------------------------------
\42\ See NYSE Arca Rule 7.34-E(T); Nasdaq Rule Equity 1, Section
1(a)(19).
---------------------------------------------------------------------------
The Exchange believes that the proposed introduction of a defined
term ``business day'' in Rule 11.1(b), together with the codification
of the concept of an Early Market Close and the corresponding
adjustments to the Exchange's trading calendar, is consistent with
Section 6(b)(5) of the Act because these amendments remove impediments
to and perfect the mechanism of a free and open market and a national
market system. As proposed, a ``business day'' is any day the Exchange
is open for trading, each Monday through Friday that is not a holiday,
thereby providing a clear and predictable foundation for determining
when the Overnight Trading Session will operate. This definition, which
does not rely on enumerated calendar days, enhances transparency and
flexibility by ensuring that the commencement of the Overnight Trading
Session is tied to whether the following day is a trading day rather
than to fixed days of the week. The proposed amendment also provides
that the Exchange will be open for the transaction of business on each
business day, including the Overnight Trading Session on the preceding
calendar day, thereby confirming the full scope of Exchange operations
under the 23x5 framework and providing Members with a clear and
comprehensive statement of when the Exchange is open. This structure
accommodates holiday closures, holiday-observed weekends, and
unforeseen non-business days without requiring further amendments to
the session definition. Likewise, the proposal's integration of Early
Market Close days (under which Regular Trading Hours conclude at 1:00
p.m. and the Post-Closing Session ends at 5:00 p.m., with the market
closure becoming effective on the calendar day preceding the closure
date) provides that the transition into the Overnight Trading Session
remains orderly, predictable, and aligned with the modified market-wide
trading schedule. Together, these provisions provide Members with a
uniform, rules-based mechanism for determining when the Exchange will
commence and pause trading under the proposed 23x5 framework, promote
just and equitable principles of trade by reducing uncertainty and the
risk of misaligned order entry during session transitions, and foster
cooperation and coordination with other market participants and
infrastructure providers by grounding the Overnight Trading Session in
a clear and durable trading-day framework. Accordingly, the Exchange
believes the proposed amendments are consistent with the protection of
investors and the public interest because they provide predictable and
transparent operational parameters for the launch and operation of the
Overnight Trading Session.
Contingency on Equity Data Plan Readiness
The Exchange believes that conditioning commencement of the
Overnight Trading Session on satisfaction of the Equity Data Plan
readiness requirements set forth in proposed Rule 1.5(jj) is consistent
with the Act and, in particular, with the Act's requirements that
exchange rules be designed to prevent fraudulent and manipulative acts
and practices, foster cooperation and coordination with persons engaged
in regulating, clearing, settling, and processing information with
respect to securities transactions, and perfect the mechanism of a free
and open market and a national market system. As the Commission has
recognized in approving similar conditions for other exchanges seeking
to operate overnight sessions, this requirement is designed to
reasonably ensure that consolidated quotation and transaction data are
provided in a manner consistent with existing extended hours sessions,
and that trading will not occur until the infrastructure necessary to
support fair and orderly markets during overnight
[[Page 33246]]
hours is in place.\43\ Prior to commencing operation of the Overnight
Trading Session, the Exchange will confirm via a subsequent Section
19(b) filing that the Equity Data Plans are prepared to collect,
consolidate, process, and disseminate quotation and transaction
information at all times during the Overnight Trading Session and that
the Exchange is able to comply with its obligations under the Act
during those hours. The Exchange believes this approach promotes
transparency because trading will not commence until these conditions
are verified and publicly filed.
---------------------------------------------------------------------------
\43\ See Securities Exchange Act Release No. 101777 (November
27, 2024), 89 FR 97092, 97105 (December 6, 2024) (approving
application of 24X National Exchange, LLC); Securities Exchange Act
Release No. 102400 (February 11, 2025), 90 FR 9794 (February 18,
2025) (approving SR-NYSEArca-2024-89).
---------------------------------------------------------------------------
Order Type Eligibility
The Exchange believes the proposed conforming amendments to its
order type rules are consistent with the Act because they apply the
same limitations on order type availability outside of Regular Trading
Hours that exist today to the Overnight Trading Session, thereby
ensuring a consistent and investor-protective trading environment
across all extended hours sessions. Restricting order eligibility
during the Overnight Trading Session and Pre-Opening Session to Limit
Orders reflects the reduced liquidity conditions characteristic of
extended hours trading and is consistent with the approach taken by
other national securities exchanges.\44\ The Exchange believes
restricting MidPoint Peg Orders that are uncapped with respect to price
to Regular Trading Hours only further protects investors by limiting
unpriced execution risk to the session in which price discovery
mechanisms and liquidity conditions are most robust.
---------------------------------------------------------------------------
\44\ See NYSE Arca Rule 7.34-E(T)(c); Nasdaq Rule 4702.
---------------------------------------------------------------------------
Weekday Trading Pause
The Exchange believes the proposed Weekday Trading Pause under new
Rule 11.25 is consistent with the Act because it promotes the
protection of investors and the public interest by providing the
Exchange and market participants with a defined period each weekday to
conduct maintenance and testing, process pending corporate actions, and
clear end-of-day positions before a new trading day commences. The
cancellation of all resting orders at the end of the Post-Closing
Session at 8:00 p.m. each weekday promotes investor protection by
ensuring that Members must affirmatively re-enter orders for the
following trading day, reducing the risk of unintended executions based
on stale order instructions.
Customer Disclosures
The Exchange believes proposed Rule 3.21(h) is consistent with the
Act and, in particular, with the Section 6(b)(5) requirement that
exchange rules be designed to promote just and equitable principles of
trade, remove impediments to and perfect the mechanism of a free and
open market and a national market system, and protect investors and the
public interest. The seven categories of risk disclosure required by
proposed Rule 3.21(h) (addressing the absence of primary listing market
oversight during overnight hours, the potential for more limited
regulatory protections, limited trading alternatives, risks associated
with near-continuous trading, the closure of financial market
infrastructure companies during overnight hours, the novel nature of
overnight exchange trading, and potential unforeseen risks) are
tailored to the specific characteristics of the Overnight Trading
Session and the expanded Pre-Opening Session, and are substantially
similar to the disclosures required by the Commission in approving the
rules of other national securities exchanges operating on an extended
overnight basis.\45\ The Exchange believes that requiring these
disclosures will enhance transparency and enable investors to make
informed decisions about whether participating in the Overnight Trading
Session or the Pre-Opening Session is appropriate for them, consistent
with the investor protection objectives of the Act. These proposed
disclosures are also consistent with FINRA Rule 2265, which separately
requires brokers to affirmatively disclose to investors that extended
hours trading carries greater risks than trading during Regular Trading
Hours.
---------------------------------------------------------------------------
\45\ See 24X Rule 3.21(g) & (i)(1)-(5); NYSE Arca Rule 7.34-
E(T)(d)(3)(viii)-(xiii); Nasdaq Rule Equity 2, Section 20(8)(A)-(G).
---------------------------------------------------------------------------
Market Surveillance
The Exchange believes that extending its existing surveillance
programs and compliance infrastructure to the Overnight Trading Session
is consistent with the Act because it provides that trading during
overnight hours is subject to the same comprehensive regulatory
oversight applicable to trading during other sessions, including
automated trade surveillance, routine Member examinations, and an exam-
based regulatory program. Exchange staff will be available during the
Overnight Trading Session to maintain a fair and orderly market, issue
necessary rulings, implement trading halts, and take any other action
that may be necessary, consistent with the Exchange's obligations under
the Act and its rules.
Competitive Considerations
The Exchange also believes the proposal is consistent with the Act
because it will foster competition by providing investors with access
to another regulated national securities exchange that offers trading
during overnight hours, consistent with similar proposals approved by
the Commission for other national securities exchanges.\7\ The Exchange
operates in a highly competitive market in which investors seeking
overnight access to U.S. equities currently resort to alternative
trading systems, foreign securities markets, and other venues. Enabling
23x5 Trading on the Exchange will allow it to compete for order flow
from these investors, which the Exchange believes will increase market
accessibility, promote capital formation, and facilitate portfolio
management.
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. The Exchange believes the
proposed rule change will, in fact, enhance competition by providing
investors with access to an additional regulated national securities
exchange offering trading during overnight hours.
The Exchange does not believe the proposed rule change will impose
any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Overnight
Trading Session will be available to all Members on an equal and non-
discriminatory basis. All Members will have the same opportunity to
enter orders, access liquidity, and participate in trading during the
Overnight Trading Session under the same rules, order type eligibility
requirements, and session designation framework applicable to all other
Exchange trading sessions. The proposed customer disclosure
requirements under Rule 3.21(h) will similarly apply uniformly to all
Members that accept orders for execution during the Overnight Trading
Session and Pre-Opening Session, ensuring that all customers receive
[[Page 33247]]
consistent information about the risks associated with trading during
those hours regardless of which Member they use. The proposed rule
change does not create any special rights, preferences, or advantages
for any particular class of Member or market participant.
The Exchange does not believe the proposed rule change will impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. To the contrary,
the Exchange believes the proposed rule change will promote intermarket
competition by enabling the Exchange to compete with other national
securities exchanges and trading venues that currently offer, or are in
the process of offering, extended overnight trading in U.S. equity
securities. Investors currently seeking overnight access to U.S.
equities may resort to alternative trading systems, foreign securities
markets, or other off-exchange venues. By enabling 23x5 Trading on a
regulated national securities exchange, the Exchange's proposal
provides investors with a regulated, transparent, and competitive
alternative to these venues, which the Exchange believes will benefit
the national market system.
The Exchange notes that its proposal is substantively consistent
with similar overnight trading proposals that the Commission has
previously approved for other national securities exchanges. The
Exchange does not believe that its proposal confers any competitive
advantage on EDGX relative to other exchanges that have received or are
seeking approval for similar frameworks. Rather, the Exchange's
proposal places it on equal competitive footing with those venues,
which the Exchange believes is necessary and appropriate in furtherance
of the purposes of the Act.
Furthermore, the Exchange's proposal to condition commencement of
the Overnight Trading Session on satisfaction of the Equity Data Plan
readiness requirements provides that 23x5 Trading will not commence
until the consolidated data infrastructure necessary to support a fair,
transparent, and competitive overnight trading market is in place. The
Exchange believes this condition serves the interests of the national
market system as a whole and does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
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. Discussion and Commission Findings
The Commission finds that the Amended Proposal is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\46\ In particular, the
Commission finds that the Amended Proposal is consistent with section
6(b)(5) of the Act,\47\ which requires, among other things, that the
rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices, 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; and not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\46\ 15 U.S.C. 78f(b). In approving this proposed rule change,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\47\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange proposes to extend its hours of operation to include
an Overnight Trading Session, which is modeled on the Exchange's rules
for the Exchange's Pre-Opening Session and Post-Closing Session, as
well as rules approved by the Commission for similar sessions on other
national securities exchanges.\48\ The Exchange also proposes to
eliminate the Early Trading Session, which operated from 4:00 a.m. to
8:00 a.m. and extend the Pre-Opening Session, which operated from 8:00
a.m. to 9:30 a.m. As proposed the Pre-Opening Session will operate from
4:00 a.m. to 9:30 a.m. Accordingly, the Exchange will operate four
individual trading sessions--the Overnight Trading Session from 9:00
p.m. to 4:00 a.m. on any day preceding a business day, and the Pre-
Opening Session from 4:00 a.m. to 9:30 a.m., Regular Trading Hours from
9:30 a.m. to 4:00 p.m., and the Post-Closing Session from 4:00 p.m. to
8:00 p.m., Monday through Friday.
---------------------------------------------------------------------------
\48\ See Securities Exchange Act Release No. 101777 (Nov. 27,
2024), 89 FR 97092, 97105 (Dec. 6, 2024) (approving application of
24X National Exchange, LLC) (``24X Approval Order''); Securities
Exchange Act Release No.102400 (Feb. 11, 2025), 90 FR 9794 (Feb. 18,
2025) (approving SR-NYSEArca-2024-89) (``NYSE Arca approval
Order''); Securities Exchange Act Release No.105199 (Apr. 10, 2026),
91 FR 20222 (Apr. 15, 2026) (approving SR-Nasdaq-2025-109) (``Nasdaq
Approval Order'').
---------------------------------------------------------------------------
The Exchange proposes Rule 11.25 to require weekday trading pauses.
Between the end of the Post-Closing Session and the beginning of the
Overnight Trading Session, i.e., Monday through Thursday between 8:00
p.m. and 9:00 p.m., the Exchange proposes to pause trading to conduct
maintenance, testing, and processing of corporate actions (such as
mergers, stock splits, and dividends). Orders on the EDGX Book as of
8:00 p.m. will be cancelled. The Exchange will begin accepting orders
at 8:55 p.m., at the Order Acceptance Queueing Time.
The Commission received a comment letter in support of the proposed
rule change.\49\ The commenter stated that the ``Commission should
approve EDGX's Proposal, as it is generally consistent with other
exchange plans to expand trading hours and harmonizes the definition of
the trading day.'' \50\ The commenter also requested that the Exchange
clarify whether it would ``run the same systems and technologies in the
day versus night.'' \51\ The Exchange responded that it will ``run the
same systems and technologies across all proposed trading sessions.''
\52\ In addition, the commenter questioned whether the Exchange's
proposal to accept orders at 8:55 p.m. would reduce the one-hour
trading pause for system maintenance by five minutes and place the
Exchange ``out of synch'' with the other national securities exchanges
that have been approved for overnight trading.\53\ The Exchange
responded that it did not believe that its proposed Order Acceptance
Queueing Time (1) will reduce its ability to conduct necessary
maintenance and testing, and process corporate actions, or (2) is
inconsistent with the ``emerging industry standard'' to pause trading
between 8 p.m. and 9 p.m.\54\ The Exchange stated that the Order
Acceptance Queueing Time will not involve trading and is being offered
as an optional feature to Exchange participants that may wish to enter
orders just prior to the start of the
[[Page 33248]]
Overnight Trading Session for operational reasons, such as managing
message traffic and ensuring orderly submission of orders. The Exchange
also stated that the Order Acceptance Queueing Time ``allows for a more
orderly opening process.'' \55\ In addition, the Exchange stated that
information about orders accepted during the Order Acceptance Queueing
Time would not be disseminated to the Equity Data Plans or to the
Exchanges proprietary data fees until the market opens at 9:00 p.m.
Finally, the Exchange noted that other exchanges have different trading
frameworks, and that one exchange will begin accepting orders at 8:59
p.m. so that the Order Acceptance Queueing Time is not outside of
industry norms.\56\
---------------------------------------------------------------------------
\49\ See Letter from Katie Kolchin, CFA Managing Director, Head
of Equity & options Market Structure, and Gerald O'Hara, Vice
President, Assistant General Counsel, SIFMA, dated Apr. 16, 2026
(``SIFMA Letter'').
\50\ See SIFMA Letter at 1.
\51\ See SIFMA Letter at 5.
\52\ See Letter from Matthew Iwamaye, Vice President, Associate
General Counsel, Cboe Global Markets, Inc, dated May 29, 2026
(``Exchange Response Letter'').
\53\ See SIFMA Letter at 5, supra note 49.
\54\ See Exchange Response Letter at 3, supra note 52.
\55\ See Exchange Response Letter, supra note 52 at 3.
\56\ See Exchange Response Letter, supra note 52 at 3.
---------------------------------------------------------------------------
The Exchange will not commence operation of the Overnight Trading
Session prior to the filing of a proposed rule change to confirm its
and the Equity Data Plans' readiness. Specifically, Exchange Rule
1.5(jj) requires the Exchange to file a proposed rule change, pursuant
to section 19(b) and the rules thereunder, to amend its rules
confirming that the Exchange is able to comply with its obligations
under the Act during the Overnight Trading Session and that the Equity
Data Plans are prepared to collect, consolidate, process and
disseminate quotation and transaction information during that time
period.
The Exchange rule requiring the operation of the Equity Data Plans
during the Overnight Trading Session is designed to ensure that
consolidated quotation and transaction information are provided in a
manner that is consistent with the existing extended hours sessions on
exchanges, including EDGX. The Exchange rules for the Overnight Trading
Session are designed to perfect the mechanism of a free and open market
and a national market system, protect investors and the public
interest. Further, the Amended Proposal will foster competition by
introducing another trading venue during these trading hours. The
Commission has approved other national securities exchanges' rules to
introduce overnight trading hours with substantively identical
provisions.\57\
---------------------------------------------------------------------------
\57\ See 24xRule 1.5(c), NYSE Arca Rule 7.34-E, and Nasdaq Rule
Equity 1, Sec. 1(a)(19).
---------------------------------------------------------------------------
In addition, the Exchange proposes to add customer risk disclosures
specifically related to the Overnight Trading Session and Pre-Opening
Session,\58\ and to only permit Limit Orders outside of the Regular
Trading Hours (i.e., unpriced orders are ineligible for use outside of
Regular Trading Hours).\59\ Finally, the Exchange, like other national
securities exchanges, states that its rules and processes related to
trading halts, Clearly Erroneous filings, and surveillance during the
Overnight Trading Session will operate in a manner that is consistent
its current extended hours trading sessions. In addition, the Exchange
states that its rules and system features will remain unchanged and
will apply in full during the Overnight Trading Session, including
Order Types and Order Execution; Membership Rules and Rules of Fair
Practice; Market Maker Obligations and Priority of Orders; Trading
Practice Rules and Disciplinary Rules and Enforcement; Opening and
Closing Crosses; Clearly Erroneous Execution Protections; and Risk
Settings and Fat Finger Protections.
---------------------------------------------------------------------------
\58\ See proposed Exchange Rule 3.21(h).
\59\ See Exchange Rule 11.8(a)(6) (stating that a Market Order
is only eligible for execution by the System during the Regular
Session). See also Exchange Rule 11.1(a)(3). In addition, under
proposed Rule 11.8(b)(6), a Limit Order may be eligible for
execution during the Overnight Trading Session, Pre-Opening Session,
Regular Session, Regular Trading Hours, and the Post-Closing
Session. Other order types eligible for execution outside of Regular
Trading Hours must be Limit Orders, including ISOs, Market Maker Peg
Orders, Supplemental Peg Orders, and MidPoint Discretionary Orders.
The Exchange proposes to amend Rule 11.8(d)(4) to require MidPoint
Peg Orders executed outside of Regular Trading Hours to be Limit
Orders.
---------------------------------------------------------------------------
Accordingly, the Amended Proposal is designed to prevent fraudulent
and manipulative acts and practices, promote just and equitable
principles of trade, foster cooperation and coordination with persons
engaged in regulating, clearing, settling, processing information with
respect to and facilitating transactions in NMS stocks, and perfect the
mechanism of a free and open market and a national market system.
Moreover, the Amended Proposal will foster competition by introducing
another trading venue during the overnight hours. As amended, the
Exchange's rules for the Overnight Trading Session are designed to
increase transparency and enhance customer risk disclosures such that
the Exchange will operate the Overnight Trading Session in a manner
that is consistent with the regulatory framework of the extended hours
sessions of other national securities exchanges.
IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to submit written data, views and
arguments concerning whether the proposed rule change, as amended by
Amendment No. 1, is consistent with the Act. Comments may be submitted
by any of the following methods:
Electronic Comments
Use the Commission's internet comment form ( https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking );
or
Send an email to [email protected] . Please include
file number SR-CboeEDGX-2026-019 on the subject line.
Paper Comments
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-2026-019. 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 ( https://www.sec.gov/rules/sro.shtml ). 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-2026-019 and should be
submitted on or before June 24, 2026.
V. Accelerated Approval of Proposed Rule Change, as Amended by
Amendment No. 1
The Commission finds good cause to approve the Amended Proposal
prior to the thirtieth day after the date of publication of the notice
of filing of Amendment No. 1 in the Federal Register. The Amended
Proposal is substantially similar to the approved rules of other
national securities exchanges.\60\ Amendment No. 1 is substantially
similar to the Notice with certain revisions that clarify when the
Exchange would be open for trading and to distinguish the terms
``business day'' and ``trading day'', particularly within the context
of the use Day Orders that may be entered during the Overnight Trading
Session.
---------------------------------------------------------------------------
\60\ See 24xApproval Order, NYSE Arca Approval Order, and Nasdaq
Approval Order, supra note 48.
---------------------------------------------------------------------------
[[Page 33249]]
In light of the previous Commission orders approving other national
securities exchanges' rules to allow trading during the times that
coincide with the Overnight Trading Session, and the substantive
similarity of the Exchange's Amended Proposal to existing exchange
rules, Amendment No. 1 does not raise any new or novel regulatory
issues. Accordingly, the Commission finds good cause, pursuant to
Section 19(b)(2) of the Act,\61\ to approve the Amended Proposal, prior
to the thirtieth day after the date of publication of the notice of
Amendment No. 1 thereof in the Federal Register.
---------------------------------------------------------------------------
\61\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
VI. Conclusion
For the reasons set forth above, the Commission finds that the
proposed rule change, as amended by Amendment No. 1, is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange and, in particular, the
requirements of Section 6(b)(5) of the Act.\62\
---------------------------------------------------------------------------
\62\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\63\ that the proposed rule change (SR-CBOEEDGX-2026-019) be, as
amended by Amendment No. 1, be, and is hereby, approved on an
accelerated basis.
---------------------------------------------------------------------------
\63\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\64\
---------------------------------------------------------------------------
\64\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-11038 Filed 6-2-26; 8:45 am]
BILLING CODE 8011-01-P
Source
https://www.federalregister.gov/documents/2026/06/03/2026-11038/self-regulatory-organizations-cboe-edgx-exchange-inc-notice-of-filing-of-amendment-no-1-and-orderCanonical document at the regulator. Always cite this URL — not the Vantage detail page — in compliance evidence.