Joint Industry Plan; Notice of Filing 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

[Federal Register Volume 91, Number 107 (Thursday, June 4, 2026)]

[Notices]

[Pages 33774-33832]

From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ]

[FR Doc No: 2026-11147]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-105596; File No. 4-631]

Joint Industry Plan; Notice of Filing 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

June 1, 2026.

I. Introduction

On May 27, 2026, Nasdaq, Inc., on behalf of Nasdaq Texas LLC

(``NDTX''), Nasdaq PHLX LLC (``PHLX''), and The Nasdaq Stock Market LLC

(``Nasdaq''), and the following parties to the Plan to Address

Extraordinary Market Volatility (``Plan'') Pursuant to Rule 608 of

Regulation NMS under the Securities Exchange Act of 1934 (``Act'' or

``Exchange Act'') \1\: 24X National

[[Page 33775]]

Exchange LLC, Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Cboe

EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry

Regulatory Authority, Inc., Investors Exchange LLC, Long-Term Stock

Exchange, Inc., MEMX LLC, MIAX PEARL, LLC, New York Stock Exchange LLC,

NYSE American LLC, NYSE Arca, Inc., NYSE Texas, Inc., and NYSE

National, Inc., (collectively with NDTX, PHLX, and Nasdaq,

``Participants''), filed with the Securities and Exchange Commission

(``Commission'') pursuant to Section 11A(a)(3) of the Exchange Act \2\

and Rule 608 thereunder,\3\ a proposal to amend the Plan (``Twenty-

Seventh Amendment'').\4\ The proposal reflects changes unanimously

approved by the Participants. The Twenty-Seventh Amendment proposes to

amend the Plan to establish temporary price band protections to

overnight trading (``Overnight Protections'') in anticipation of

overnight trading by certain national securities exchanges. The

Commission is publishing this notice to solicit comments from

interested persons on the Twenty-Seventh Amendment.\5\

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\1\ See Securities Exchange Act Release No. 67091, 77 FR 33498

(June 6, 2012); Securities Exchange Act Release No. 68953 (February

20, 2013), 78 FR 13113 (Feb. 26, 2013); Securities Exchange Act

Release No. 69287 (April 3, 2013), 78 FR 21483 (Apr. 10, 2013);

Securities Exchange Act Release No. 70273 (August 27, 2013), 78 FR

54321 (September 3, 2013); Securities Exchange Act Release No. 70530

(September 26, 2013), 78 FR 60937 (October 2, 2013); Securities

Exchange Act Release No. 71247 (January 7, 2014), 79 FR 2204

(January 13, 2014); Securities Exchange Act Release No. 71851 (April

3, 2014), 79 FR 19687 (April 9, 2014); Securities Exchange Act

Release No. 74323 (February 19, 2015), 80 FR 10169 (February 25,

2015); Securities Exchange Act Release No. 76244 (October 22, 2015),

80 FR 66099 (October 28, 2015); Securities Exchange Act Release No.

77679 (April 21, 2016), 81 FR 24908 (April 27, 2016); Securities

Exchange Act Release No. 78703 (August 26, 2016), 81 FR 60397

(September 1, 2016); Securities Exchange Act Release No. 79845

(January 19, 2017), 82 FR 8551 (January 26, 2017); Securities

Exchange Act Release No. 80455 (April 13, 2017), 82 FR 18519 (April

19, 2017); Securities Exchange Act Release No. 80549 (April 28,

2017), 82 FR 20928 (May 4, 2017); Securities Exchange Act Release

No. 81720 (September 26, 2017), 82 FR 45922 (October 2, 2017);

Securities Exchange Act Release No. 82887 (March 15, 2018), 83 FR

12414 (March 21, 2018); Securities Exchange Act Release No. 83044

(April 12, 2018), 83 FR 17205 (April 18, 2018); Securities Exchange

Act Release No. 85623 (April 11, 2019), 84 FR 16086 (April 17,

2019); Securities Exchange Act Release No. 88122 (February 5, 2020),

85 FR 7805 (February 11, 2020); Securities Exchange Act Release No.

88704 (April 21, 2020), 85 FR 23383 (April 27, 2020); Securities

Exchange Act Release No. 89420 (July 29, 2020), 85 FR 46762 (August

3, 2020); Securities Exchange Act Release No. 90068 (October 1,

2020), 85 FR 63322 (October 7, 2020); Securities Exchange Act

Release No. 101036 (September 16, 2024), 89 FR 77203 (September 20,

2024); Securities Exchange Act Release No. 103042 (May 14, 2025), 90

FR 21529 (May 20, 2025); Securities Exchange Act Release No. 103845

(September 3, 2025), 90 FR 43254 (September 8, 2025); Securities

Exchange Act Release No. 105443 (May 12, 2026), 91 FR 27995 (May 15,

2026).

\2\ 15 U.S.C 78k-1(a)(3).

\3\ 17 CFR 242.608.

\4\ See Letter from Andrew Oppenheimer, Head of U.S. Equities,

Nasdaq, to Vanessa Countryman, Secretary, Commission, dated May 27,

2026 (``Transmittal Letter'').

\5\ 17 CFR 242.608.

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II. Description of the Plan

Set forth in this Section II is the statement of the purpose and

summary of the Twenty-Seventh Amendment, along with the information

required by Rule 608(a)(4) and (5) under the Exchange Act,\6\ prepared

and submitted by the Participants to the Commission.\7\

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\6\ See 17 CFR 242.608(a)(4) and (a)(5).

\7\ See Transmittal Letter, supra note 4.

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A. Statement of Purpose and Summary of the Plan Amendment

The Participants filed the Plan with the Commission on April 5,

2011, to create a market-wide limit up-limit down mechanism intended to

address extraordinary market volatility in NMS Stocks, as defined in

Rule 600(b)(65) of Regulation NMS under the Exchange Act.\8\ The Plan

sets forth procedures that provide for market-wide limit up-limit down

requirements to prevent trades in individual NMS Stocks from occurring

outside of the specified Price Bands.\9\ These limit up-limit down

requirements are coupled with Trading Pauses, as defined in Section

I(Y) of the Plan, to accommodate more fundamental price moves. In

particular, the Participants adopted this Plan to address extraordinary

volatility in the securities markets, i.e., significant fluctuations in

individual securities' prices over a short period of time, such as

those experienced during the ``Flash Crash'' on the afternoon of May 6,

2010.

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\8\ 17 CFR 242.600(b)(65).

\9\ Unless otherwise stated, capitalized terms are defined in

the LULD Plan.

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As set forth in more detail in the Plan, all trading centers in NMS

Stocks, including both those operated by Participants and those

operated by members of Participants, are required to establish,

maintain, and enforce written policies and procedures that are

reasonably designed to comply with the Limit Up-Limit Down requirements

specified in the Plan. The Participants believe that the Limit Up-Limit

Down mechanism specified in the Plan has reduced the negative impacts

of sudden, unanticipated price movements in NMS Stocks (and erroneous

trades in such stocks), thereby protecting investors and promoting a

fair and orderly market.\10\

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\10\ Data collected during the pilot period between the initial

filing of the Plan and the approval of the Plan on a permanent basis

by the Commission, and studies conducted by the Participants and the

Commission's Division of Economic and Risk Analysis demonstrated

that the Plan has been beneficial to markets by serving to dampen

price volatility, and the Commission approved the Plan on a

permanent basis after finding that the LULD mechanism effectively

addressed extraordinary market volatility. See Securities Exchange

Act Release No. 84843 (December 18, 2018), 83 FR 66464 (December 26,

2018); Securities Exchange Act Release No. 85623 (April 11, 2019),

84 FR 16086 (April 17, 2019).

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The Participants propose a cautious approach to extending

protections to the unique conditions presented by overnight markets.

The proposal is to be implemented in two phases. In the first phase,

the Participants propose to apply protections based on those currently

used by certain ATSs to constrain significant fluctuations in

individual securities' prices over a short period of time. The

Participants believe that these protections are narrowly tailored to

current market conditions, and will promote market stability over an

interim period.

During implementation of this first phase, Participants will gather

and analyze information concerning overnight trading, and will use that

information to develop recommendations for a final proposal to be

implemented in the overnight session. The final proposal will be

submitted to the Commission as a plan amendment that will remove the

interim measures and replace them with revised overnight protections.

1. Authority To Amend Under Rule 608 of Regulation NMS

The Participants respectfully submit this amendment to the Plan

pursuant to Rule 608 of Regulation NMS under the Exchange Act, which

authorizes the Participants to act jointly in preparing, filing, and

implementing national market system plans. Rule 608(a)(3) specifically

provides that any two or more self-regulatory organizations, acting

jointly, may file a national market system plan or any amendment

thereto with the Commission. The Participants are self-regulatory

organizations that are parties to the Plan and have the authority under

Rule 608 to propose amendments to the Plan for Commission approval.

Section III(A) of the Plan provides that, except with respect to

the addition of new Participants to the Plan, any proposed change in,

addition to, or deletion from the Plan shall be effected by means of a

written amendment to the Plan that: (1) sets forth the change,

addition, or deletion; (2) is executed on behalf of each Participant;

and (3) is approved by the SEC pursuant to Rule 608 of Regulation NMS

under the Exchange Act, or otherwise becomes effective under Rule 608

of Regulation NMS under the Exchange Act.

Each of the Participants has approved this Twenty-Seventh Amendment

in accordance with Section III(C) of the Plan. The Participants also

received and incorporated feedback from the Plan Advisory Committee in

preparing this proposal.

The Participants believe that this amendment is consistent with

Section 11A of the Exchange Act and Rule 608 thereunder. Rule 608

provides that the Commission shall approve a proposed NMS plan, or

proposed amendment thereto, if it finds that such plan or amendment is

necessary or appropriate in the public interest, for the protection of

investors, or otherwise in furtherance of the purposes of the Act; and

such

[[Page 33776]]

plan provides that all brokers and dealers may obtain access to

transaction reports and quotations on terms that are not unreasonably

discriminatory.\11\ Section 11A of the Act establishes the

Congressional finding that it is in the public interest and appropriate

for the protection of investors and the maintenance of fair and orderly

markets to assure economically efficient execution of securities

transactions, fair competition among brokers and dealers and exchange

markets, and the availability to brokers, dealers, and investors of

information with respect to quotations for and transactions in

securities.\12\ Consistent with these standards, the proposed amendment

would enhance the stability and integrity of the national market system

by implementing price band protections during overnight trading

sessions, thereby reducing the risk of extraordinary volatility and

erroneous trades during periods of reduced liquidity.

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\11\ 15 U.S.C. 78k-1(a)(1)(C).

\12\ 15 U.S.C. 78k-1(a)(1)(C).

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2. Summary of Proposed Amendment

The Participants propose to add a new Section VIII to the Plan,

entitled ``Overnight Protections,'' which establishes a framework for

calculating and disseminating Overnight Price Bands for use during

Overnight Protected Hours (defined as 9:00 p.m. Eastern Time on Sunday

through Thursday to 4:00 a.m. Eastern Time on the next calendar day),

and requires all trading centers that are operative during such hours

to establish, maintain, and enforce written policies and procedures

that are reasonably designed to prevent trades outside of such

Overnight Price Bands. In Phase 2 of the proposal, Participants intend

to replace the interim Section VIII proposed in this amendment with a

more permanent Section VIII to govern overnight trading protections,

and expect these protections to more closely resemble the LULD program

in place during Regular Trading Hours, for instance by including

sliding bands.

The proposed amendment for Phase 1 includes the following key

aspects:

(a) Overnight Price Bands. The Primary Listing Exchange for each

NMS Stock shall calculate and disseminate to the Processors an

Overnight Lower Price Band and an Overnight Upper Price Band to be

applied during Overnight Protected Hours for NMS Stocks. The Overnight

Price Bands shall be based on two reference prices as adjusted for any

relevant corporate actions, (i) the official closing price of a stock

as reported by the listing market for such NMS stock and (ii) the

consolidated last round lot sale as of 7:45 p.m. Eastern Time, with the

Overnight Lower Price Band being 20% lower than the lower of the

reference prices, and the Overnight Upper Price Band being 20% greater

than the greater of the reference prices; the Overnight Percentage

Parameter for a leveraged ETP shall be 20%, multiplied by the leverage

ratio. For NMS Stocks with a Closing Price of less than $1.00, the

minimum Overnight Upper Price Band and minimum Overnight Lower Price

Band thresholds shall each be $1.00 from the applicable reference

price; for NMS Stocks with a Closing Price of $1.00 or more, the

minimum Overnight Upper Price Band and minimum Overnight Lower Price

Band thresholds shall each be $3.00 from the applicable reference

price. The Minimum Price Band for a leveraged ETP shall be multiplied

by the leverage ratio of such product.

(b) Primary Listing Exchanges shall transmit the calculated

Overnight Price Bands to the Processors no later than 8:55 p.m. Eastern

Time, and the Processors shall disseminate such bands to the public

prior to 9:00 p.m. Eastern Time.

(c) All trading centers in NMS Stocks that are operative during

Overnight Protected Hours, must establish, maintain, and enforce

written policies and procedures that are reasonably designed to prevent

both trades and the display of prices outside the Overnight Price Bands

during Overnight Protected Hours.

(d) The Primary Listing Exchange of a stock may declare a

Regulatory Halt in accordance with Primary Listing Exchange rules, and,

if so, shall notify the Processor.\13\ During a Regulatory Halt during

Overnight Protected Hours, Participants shall reject orders. Any NMS

Stock subject to a Regulatory Halt during Overnight Protected Hours

shall not reopen during Overnight Protected Hours.

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\13\ The Primary Listing Exchanges anticipate using halt codes

currently available within the Processors' specifications.

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(e) The proposed amendment also amends Section IV of the Plan to

require that trading center policies and procedures comply with the

overnight requirements specified in the new Section VIII.\14\

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\14\ Unlike policies at certain ATSs, the proposed amendment

does not include guidance regarding how to handle corporate actions

during Overnight Protected Hours, as this decision will be left to

the discretion of each listing exchange.

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Overnight Protected Hours

The Participants have determined to implement overnight protections

between the hours of 9:00 p.m. and 4:00 a.m. Eastern Time. The 9:00

p.m. Eastern Time commencement of the Overnight Protected Hours

corresponds to the time at which the Processors will open for overnight

trading, thereby ensuring that the limit up-limit down mechanism is

operative from the moment overnight trading activity becomes available

through the consolidated market data infrastructure. The 4:00 a.m.

Eastern Time conclusion of the Overnight Protected Hours was selected

to accommodate the well-established practice of issuers releasing

earnings announcements, material corporate disclosures, and other

price-sensitive information during pre-market hours in advance of the

Regular Trading Session. By terminating Overnight Protected Hours at

4:00 a.m. Eastern Time, the Participants intend for market participants

to be able to incorporate newly disclosed information into securities

prices without the constraints of pricing bands based on the prior

day's activity.

The Participants acknowledge that the application of price bands

during Overnight Protected Hours has the potential to inhibit price

discovery to some degree, insofar as the bands may constrain the range

of prices at which transactions can occur during those hours. However,

the Participants believe that this risk does not outweigh the

significant investor protections afforded by the proposed amendment. In

particular, the Participants' analysis \15\ indicates that only a

minority of NMS stocks would be materially impacted by the presence of

price bands during Overnight Protected Hours, suggesting that the

constraining effect on price discovery would be limited in scope and

would not broadly impair the market's ability to reflect fundamental

value. Moreover, to the extent that the price band mechanism may in

certain instances restrain price movement during the overnight session,

the Participants believe that this trade-off is justified by the

protections that the amendment provides against erroneous trades and

aberrant executions in a low-liquidity trading environment--protections

that serve the interests of investors and the integrity of the national

market system. Finally, in a circumstance in which orders are

consistently being placed outside the bands or the price bands are

otherwise limiting price discovery, Primary Listing

[[Page 33777]]

Exchanges will be able to declare a Regulatory Halt \16\ to suspend

trading for the remainder of the overnight session, allowing the market

to resume price discovery in the more liquid environment following the

end of Overnight Protected Hours.

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\15\ See Section 2 above.

\16\ In accordance with Primary Listing Exchange rules.

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This calibration of the Overnight Protected Hours appropriately

balances the Plan's dual objectives of preventing extraordinary

volatility and facilitating price discovery: during the overnight

session, when liquidity is reduced and the risk of erroneous trades or

transitory gaps in liquidity is heightened, the price band mechanism

will prevent trades at prices far removed from a security's recent

fundamental value, thereby protecting investors who might otherwise

execute transactions at aberrant prices. This is in contrast to the

pre-market session, when fundamental corporate information is being

disseminated and absorbed by the market, and the price discovery

process will be allowed to function without impediment. Accordingly,

the Participants believe that the proposed Overnight Protected Hours

window removes impediments to, and perfects the mechanism of, the

national market system by extending proven investor protections to a

trading environment that presents the types of risks that the Plan was

designed to address, while preserving the market's capacity to

efficiently incorporate material new information during the pre-market

period.

Overnight Price Band Calculation

The Participants have designed the Overnight Price Bands to balance

the Plan's dual objectives of preventing extraordinary volatility and

facilitating price discovery during overnight trading sessions. The

Overnight Price Bands are calculated using two reference prices: the

Closing Price and a more recent Consolidated Price representing an

execution in the post-market. The use of dual reference prices is

designed to mitigate the risks associated with reliance on a single

closing price that may become stale or unrepresentative of current

market conditions by the time overnight trading commences. Material

information is frequently disseminated after the close of the Regular

Trading Session, and post-market trading activity may result in prices

that differ meaningfully from the Closing Price.

If the Overnight Price Bands were anchored to just one price, the

bands could be misaligned with prevailing market sentiment, potentially

resulting in price bands that are too restrictive impeding legitimate

price discovery based on post-market developments. By incorporating the

Consolidated Price, the Overnight Price Bands dynamically account for

post-market trading activity, ensuring that the bands reflect a price

at which market participants have demonstrated a willingness to

transact, which is aligned with ATS practice, while also incorporating

the Closing Price to reflect market sentiment during Regular Trading

hours. This dual-reference methodology grounds the Overnight Price

Bands in demonstrated market sentiment across both the Regular Trading

Session and post-market hours, providing maximum flexibility in the

protections while ensuring those protections remain appropriately

calibrated to actual market conditions. The Participants believe that

this approach is consistent with the protection of investors and the

maintenance of fair and orderly markets, and removes impediments to,

and perfects the mechanism of, the national market system.

The Participants selected a Percentage Parameter of 20% for

Overnight Price Bands to align with the 20% static band protections

currently in place for overnight trading on ATSs, while differing from

ATS approach by using two reference prices in calculating those bands.

Furthermore, the Participants expect that during the initial period of

overnight trading hours (commonly referred to as ``23/5 trading''),

when market participants are adjusting to the new structure, applying

the same Percentage Parameters to all stocks in the Overnight trading

session will be easier for participants to understand, balancing the

interest of protecting investors with ensuring transparent market

practices.

The Overnight Price Bands are also subject to minimum price band

thresholds \17\ to ensure that a minimum range of permissible trading

prices remains available during overnight hours. These minimum

thresholds prevent the Overnight Price Bands from becoming so narrow as

to unduly restrict trading activity or impede legitimate price

movements, particularly for lower-priced securities where the

application of percentage-based parameters alone could result in price

bands of only a few cents. The Participants believe that establishing

minimum price band thresholds appropriately balances investor

protection against extraordinary volatility with the preservation of

fair and orderly markets by ensuring that overnight trading can

continue to occur within a reasonable price range, consistent with the

purposes of Section 11A of the Exchange Act and Rule 608 thereunder.

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\17\ For stocks with a Closing Price of $1.00 or greater, the

minimum band is $3.00, and for stocks with a Closing Price of less

than $1.00, the minimum band size is $1.00.

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Primary Listing Exchange and Processor Obligations

This proposed amendment requires the Primary Listing Exchange of an

NMS Stock to calculate the price bands and disseminate them to the

Processors, who will then disseminate those bands to the market. This

was chosen as the approach in Phase 1 because the Processors are

currently testing and implementing extensive updates \18\ and the

Participants agreed that the most effective way to implement Overnight

Protections would be to reduce the burden on the Processors that would

have come from calculating the bands themselves. Phase 1 is designed to

require minimal work from the Processors. The Processors, however, will

then disseminate the bands to the public over trade and quote multicast

channels via existing fields in the LULD messages starting at

approximately 8:55 p.m. Eastern Time, in line with their current role

during Regular Trading Hours.

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\18\ Including to implement 23/5 trading, implement changes to

collect and disseminate odd-lot quote information, incorporating

fractional share trading information, preparing for amended tick

sizes, implementing a new Issue Symbol Directory Message, and

transitioning to a new Consolidated Tape Plan. See Securities

Exchange Act Release No. 101070 (September 18, 2024), 89 FR 81620

(October 8, 2024), File No. S7-30-22; Securities Exchange Act

Release No. 88827 (May 6, 2020), 85 FR 28702 (May 13, 2020).

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Overnight Halts

At this time, the Participants have determined not to implement

automatic Trading Pauses during Overnight Protected Hours, similar to

ATSs which also do not implement automatic trading pauses during

overnight trading sessions (ATSs simply reject orders that fall outside

their bands). This approach reflects the Participants' careful

consideration of the distinct characteristics of overnight trading,

including significantly reduced liquidity, lower trading volumes, and

fewer active market participants relative to Regular Trading Hours.

During the Regular Trading Session, automatic Trading Pauses serve to

provide market participants with a brief opportunity to reassess their

trading interest and supply additional liquidity following a

significant price movement, after which trading resumes with an auction

to

[[Page 33778]]

facilitate orderly price discovery. Instead of implementing a similar

process of automatic Trading Pauses followed by an auction for the

Overnight Protected Hours, Primary Listing Exchanges would instead

retain discretion to announce Regulatory Halts, in accordance with

Primary Listing Exchange rules, during Overnight Protected Hours, which

would remain in place for the duration of the overnight trading

session. The Participants have elected not to reopen trading halts with

auctions during Overnight Protected Hours because they expect that

there will be insufficient liquidity in the initial phase of the

overnight trading session for an efficient auction to occur. Without

confidence in the standard method of reopening trading following a

halt, and without sufficient information to create a different method,

the Participants believe that it is in the best interests of the market

not to reopen trading following a halt in the overnight session.

The Participants believe that permitting the Primary Listing

Exchanges to announce Regulatory Halts during Overnight Protected Hours

aligns with the Plan's fundamental purpose of promoting a fair and

orderly market. Under this framework, the Overnight Price Bands will

continue to operate as a safeguard against trades occurring at prices

that deviate significantly from a security's recent fundamental value,

thereby preventing extraordinary volatility and protecting investors

from executing transactions at aberrant prices. When an event occurs

that a Primary Listing Exchange, in accordance with Primary Listing

Exchange rules, determines merits a Regulatory Halt, the Primary

Listing Exchange will have the authority, but not the obligation, to

announce a Regulatory Halt if, in its judgment, such action is

warranted to maintain a fair and orderly market. This discretionary

approach permits the Primary Listing Exchange to evaluate the totality

of the circumstances, including any material information that may be

affecting the security's price, and which may also include, in certain

circumstances, prevailing liquidity conditions, before determining

whether a halt is necessary and appropriate.

The Participants believe this framework is consistent with Section

11A of the Securities Exchange Act of 1934 and Rule 608 thereunder

because it preserves the core investor protections of the limit up-

limit down mechanism while the Participants analyze data on overnight

trading, thereby removing impediments to, and perfecting the mechanism

of, the national market system.

Ministerial Amendments

The Participants have proposed ministerial changes to update the

addresses of certain Participants in Section II(A) of the Plan.

The Participants have also proposed a change to the definition of

Regular Trading Hours, in Section I(S) to conform to the amended

citation in Regulation NMS for the definition of Regular Trading

Hours.\19\

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\19\ 17 CFR 242.600(b)(88). See also Securities Exchange Act

Release No. 99679 (March 6, 2024), 89 FR 26428 (April 15, 2024).

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3. Proposed Overnight Trading Protections Based on Current ATS

Protections in Anticipation of 23/5 Exchange Trading

The Commission has recently approved applications by 24X National

Exchange LLC, NYSE Arca Inc., and Nasdaq to conduct trading on a near-

continuous 23/5 basis.\20\ These approvals represent a significant

expansion of exchange trading into periods that have historically been

characterized by lower liquidity, wider spreads, and the potential for

increased price volatility due to the release of overnight news and

developments in foreign markets. The Processors are preparing to

commence overnight trading on December 6, 2026.\21\

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\20\ See Securities Exchange Act Release No. 34-102400 (Feb. 11,

2025); 90 FR 9794 (Feb. 18, 2025) (order approving NYSE Arca Inc.

proposal to lengthen its trading session to 22 hours per day, 5 days

per week) (``NYSE Arca Approval Order''); Securities Exchange Act.

Release No. 89-235 (Nov. 27, 2024); 89 FR 97092 (order approving

application of 24X National Exchange, LLC for registration as a

national securities exchange and to trade 23 hours per day, 5 days

per week) (``24X Approval Order''); Securities Exchange Act Release

No. 34-105199 (April 10, 2026) 91 FR 20222 (April 15, 2026) (SR-

NASDAQ-2025-109) (``Nasdaq Approval Order''). The Commission is also

contemplating a similar proposal by Cboe EDGX Exchange, Inc. See

Securities Exchange Act Release No. 34-105206 (April 10, 2026) 91 FR

20213 (April 15, 2026) (SR-CboeEDGX-2026-019).

\21\ See letter from Jeff Kimsey, Chair of the Operating

Committees of the Equity Data Plans, dated March 23, 2026.

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The 20% Percentage Parameter proposed in this amendment reflects

the existing price protection mechanisms employed by ATSs that

currently operate in the overnight trading space. ATSs that currently

facilitate overnight trading have generally adopted 20% trading bands

as a market-wide price protection standard, although those bands are

based on a single static price,\22\ unlike the two reference prices in

this proposal.\23\ The Participants expect that adopting a band

percentage consistent with these established ATS practices will

facilitate a smoother transition for market participants as overnight

trading expands to national securities exchanges. By aligning the

Overnight Price Bands with protections conceptually familiar to broker-

dealers, institutional investors, and retail participants who have

engaged in overnight trading through ATSs, the proposed amendment

reduces operational complexity and minimizes the risk of market

disruption that could arise from the introduction of materially

different price protection standards. The Participants submit that this

alignment serves the public interest and the protection of investors by

establishing uniform expectations across trading venues, thereby

promoting confidence in the integrity of overnight trading and

supporting the orderly expansion of 23/5 trading to the national market

system.

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\22\ See, e.g., Blue Ocean Technologies LLC, Frequently Asked

Questions, available at https://blueocean-tech.io/faq/ .

\23\ Due to the different approaches of one vs. two reference

prices with the same percentage parameters applied, this proposal

could result in wider trading bands than those currently used by

ATSs, although the current expectation is that using two reference

prices will have minimal impact on the bands the majority of the

time, while capturing the reality of any extraordinary shifts in the

market following the close of Regular Trading Hours.

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The Participants believe that the application of protections to

these newly approved overnight trading sessions is necessary and

appropriate and in the public interest, for the protection of investors

and for the maintenance of fair and orderly markets. The fundamental

purpose of the Plan--to prevent trades in individual NMS Stocks from

occurring at prices that are not reflective of a fair and orderly

market--applies with equal, if not greater, force during overnight

periods when market conditions may exacerbate the risk of sudden,

unanticipated price movements similar to the ``Flash Crash.'' The LULD

mechanism is intended to reduce the negative impacts of sudden,

unanticipated price movements in NMS Stocks, thereby protecting

investors and promoting a fair and orderly market. Previously conducted

data and analysis have demonstrated that the LULD mechanism has been

largely effective at reducing the negative impacts of such price

movements,\24\ and the Participants believe protections should extend

to overnight trading sessions where similar risks--or heightened risks

due to reduced liquidity--may arise.

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\24\ See, e.g., Securities Exchange Act Release No. 84843

(December 18, 2018), 83 FR 66464 (December 26, 2018).

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Based on an analysis of data from the ATS Blue Ocean, the

Participants expect

[[Page 33779]]

that the impact of this proposal on actual overnight trading will be

minimal, although the guardrails are valuable to the outliers. Using an

approximation of the proposed overnight trading bands \25\ and the

closing price and the price of a stock as of 7:45 p.m. Eastern Time, an

average of 0 S&P 500 stocks, 0.6 ETPs and 0.4 non-S&P 500 stocks per

day, or less than 0.1% of total volume, would be impacted by the bands.

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\25\ Blue Ocean rejects orders that are 20% away from the last

sale price for the security printed on a national securities

exchange as of 7:30 p.m. ET, so this analysis was conducted using

18% bands as a proxy for orders likely to hit the 20% threshold of

the proposed overnight trading bands. The Participants acknowledge

that this analysis is unable to capture orders that are currently

being cancelled or rejected for falling outside the bands, but

believe that if orders were surpassing the bands, there would also

be a concentration of orders that approach the bands, and so this

18% approximation should capture and reflect that reality.

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Overnight trading sessions present unique challenges for market

integrity, including reduced liquidity, increased information asymmetry

due to overnight news flow and global developments, and a heightened

potential for erroneous trades. Implementing the proposed market

protections during overnight trading sessions should limit the

frequency and severity of harmful price dislocations, consistent with

the purposes for which the Plan was adopted.

Indeed, the development of price band protections in the overnight

trading space illustrates the organic evolution of similar safeguards

in response to market need. Before national securities exchanges sought

to extend their operating hours into overnight sessions, ATSs pioneered

overnight trading and independently implemented price band mechanisms

to protect market participants from aberrant executions during periods

of reduced liquidity. The adoption of 20% price bands by ATSs operating

in this space emerged as a market-driven response to the unique risks

presented by overnight trading--demonstrating that sophisticated market

participants recognize the necessity of such protections. Market

participants who have engaged in overnight trading through ATSs have

come to rely on these safeguards. These market participants have a

reasonable expectation that comparable protections will accompany the

expansion of overnight trading to national securities exchanges, which

the Participants believe this proposed amendment will achieve, although

with some differences to the ATS approach, including by using two

reference prices in order to reflect relevant market activity.

4. Phased Implementation of Overnight Protections

As noted above, the Participants propose to implement Overnight

Protections in two phases. The amendments to the Plan set forth herein

constitute Phase 1 of this implementation. Phase 2 is anticipated to be

implemented in 2027, following a

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period of observation, data gathering, and assessment of overnight

trading. As no national exchange currently conducts trading in the

overnight session, comprehensive and reliable data on overnight trading

activity remains limited, and the Participants recognize that the

provisions of Phase 1 in the proposed Plan may require recalibration as

empirical evidence accumulates. Phase 1 is therefore designed not only

to provide meaningful protections against extraordinary volatility

during overnight hours, but also to serve as a structured framework for

generating the granular, real-world data necessary to evaluate and

refine these overnight provisions to craft a thoughtful Phase 2.

The Participants currently expect Phase 2 to include: (1) sliding

price bands that adjust based on market activity during Overnight

Protected Hours without imposing an absolute limit on prices (e.g.,

sliding the Upper Price Band to a higher price if a security is in a

prolonged limit state where the national best bid is equal to the

Overnight Upper Price Band; (2) the Processors calculating and

disseminating the Overnight Price Bands, rather than the Primary

Listing Exchanges; and (3) recalibrated Overnight Percentage

Parameters, which may be lower than the proposed parameters set forth

in Section VIII(A)(3) of the Plan and which may differ between Tier 1

and Tier 2 NMS Stocks.

Each of these anticipated Phase 2 enhancements reflects the

Participants' recognition that certain provisions in the current

proposal--including the initial Overnight Percentage Parameters, the

assignment of calculation and dissemination responsibilities, and the

static nature of the price bands--may not be optimally calibrated for

the unique liquidity and volatility conditions that characterize

overnight trading sessions. The Participants believe that the phased

approach is the most prudent and responsible means of addressing them

these challenges, by enabling the Plan and the Commission to collect

and analyze data on overnight trading before proceeding to a more

complex system of overnight protections.

The Operating Committee intends to evaluate data on overnight

trading and the performance of Phase 1 in 2027 and determine the

appropriate timing and specifications for Phase 2. In conducting this

evaluation, the Operating Committee will analyze, among other things,

the interactions between the market and Overnight Price Bands across

varying liquidity conditions, the incidence and causes of any trading

halts declared by Listing Exchanges, the adequacy of the Overnight

Percentage Parameters in mitigating extraordinary volatility without

unduly constraining legitimate price discovery, and the operational

performance of the Primary Listing Exchanges in calculating Overnight

Price Bands and the Processors in disseminating them. The Participants

are committed to a rigorous, evidence-based assessment and intend to

work collaboratively with the Commission and its Staff throughout this

process to identify additional data points or analytical methodologies

that may enhance the evaluation. The Participants expect to include

information regarding the operations of Phase 1 in the Plan's quarterly

reports, commencing with the quarterly report covering the first full

quarter of overnight trading. Participants expect to submit a Phase 2

proposal for consideration by the Commission with sufficient time for

implementation by the fourth quarter of 2027. The Participants will

report on the evidence gathered on overnight trading together with its

proposal for Phase 2 revisions to overnight protections.

Just as the Plan was initially approved on a trial basis \26\ to

allow the Participants and the public to gain valuable practical

experience with Plan operations, and subsequently made permanent

following extensive data collection and analysis,\27\ the Participants'

proposal to implement Overnight Protections in a phased approach will

enable the Operating Committee, the Commission, and the market as a

whole, to observe overnight trading and the effectiveness of the

Overnight Protections and compile data to inform future decisions.

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\26\ See Securities Exchange Act Release No. 67091 (May 31,

2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (``Approval

Order'').

\27\ See Securities Exchange Act Release No. 85623 (April 11,

2019), 84 FR 16086 (April 17, 2019) (File No. 4-631).

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The Plan has always operated on the premise that the Participants

will engage in a continuous data-intensive review of the National

Market System and the Plan's impact on that market. That premise

carries particular force here, where the implementation of protections

to Overnight Protected Hours presents novel challenges--including

thinner liquidity, wider spreads, and the potential for price

dislocations driven by international developments or after-hours

corporate announcements--that cannot be fully anticipated or addressed

through existing data alone. The current provisions of the proposal

reflect the Participants' best judgment based on available information,

but the Participants recognize that certain parameters and operational

assignments may require adjustment once real-world evidence becomes

available. The proposed two-phased approach, based on a review of the

evidence prior to implementing a final proposal, is consistent with

that fundamental approach, and will enable the Operating Committee and

the Commission to collaborate to review new information.

The Commission has repeatedly emphasized the importance of ongoing

review and assessment to ensure that the Plan continues to achieve its

objective of reducing extraordinary volatility. The Participants

believe that the same data-driven approach is appropriate for overnight

protections, and that the restrained approach of observing the interim

effects of this Twenty-Seventh Amendment during new overnight trading

hours will enable the Plan to respond to market activity with overnight

protections that are effective and specifically tailored to the

particular circumstances that present during overnight trading.

5. Consistency With the Purposes of the Plan and the Exchange Act

The Participants believe that the proposed amendment is necessary

and appropriate in the public interest, for the protection of

investors, and for the maintenance of fair and orderly markets, because

extending the protections afforded by the Plan to overnight hours is

consistent with the fundamental purposes of the Plan. The Plan was

originally adopted to address extraordinary volatility in the

securities markets and to prevent trades in individual NMS Stocks from

occurring outside of Price Bands selected to maintain orderly market

conditions. These objectives are equally applicable--and may be more

critical--during overnight trading sessions when market conditions may

be less liquid and more susceptible to price dislocations. The efficacy

of current LULD mechanisms in addressing extraordinary market

volatility, moreover, informs the Participants' belief that it is

appropriate to also establish price protections in the new overnight

trading environment.

The Participants believe that the proposed amendment is consistent

with Section 11A(a)(1)(C) of the Exchange Act, which directs the

Commission to facilitate the establishment of a national market system

that assures, among other things, economically efficient execution of

securities transactions, fair competition among brokers and dealers

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and among markets, and the practicability of brokers executing

investors' orders in the best market.\28\ Applying uniform protections

across all trading centers that operate during Overnight Protected

Hours promotes fair competition and ensures that investor protection

does not vary based on the venue at which an order is executed during

overnight hours.

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\28\ 15 U.S.C. 78k-1(a)(1)(C) and (a)(2).

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This Twenty-Seventh Amendment to the Plan would enhance the public

interest, protect investors, and help maintain fair and orderly

markets, while removing impediments to and perfecting the mechanism of

the national market system in conformance with Rule 608.\29\ This

proposed amendment establishes guardrails for overnight trading to

mitigate the risk of excessive volatility in markets and will help to

prevent extreme price swings and erroneous trades, which will protect

investors from excessive volatility in the new overnight trading

session. The amendment appropriately balances the dual objectives of

preventing extraordinary volatility and facilitating price discovery,

and will thus enhance confidence in the market as a whole by

demonstrating the exchange industry's thoughtful approach to

implementing new market protections in the new world of 23/5 Trading.

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\29\ 17 CFR 242.608(b)(2).

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B. Governing or Constituent Documents

The governing documents of the Processor, as defined in Section

I(P) of the Plan, will not be affected by the Amendment.

C. Implementation of Amendment

The Participants will announce the operative date of the amendment

(``Operative Date''), which will be subject to the completion of

certain systems changes by the Processors for the Unlisted Trading

Privileges (UTP) Plan and Consolidated Tape Association (CTA) Plan to

ensure dissemination of overnight trading bands.

D. Development and Implementation Phases

The Participants propose to implement the proposed amendment on the

Operative Date. As discussed, a separate ``Phase 2'' proposal will be

filed with the Commission at a later date. Phase 1 overnight

protections will remain in place until the operative date of such Phase

2 proposal.

E. Analysis of Impact on Competition

The Participants believe that the proposed amendment does not

impose any burden on competition that is not necessary or appropriate

in furtherance of the purposes of the Exchange Act. The proposed

amendment to the Plan would apply to all market participants equally

and would not impose a competitive burden on one category of market

participants in favor of any other category of market participant. The

proposed amendment would apply to trading on all trading centers that

operate during Overnight Protected Hours, and all NMS Stocks (other

than rights and warrants, which are excluded from the Plan) would be

subject to the amended Plan's requirements. The Participants do not

believe that the proposed amendment introduces terms that are

unreasonably discriminatory for the purposes of Section 11A(c)(1)(D) of

the Exchange Act because it would apply to all market participants

equally.

F. Written Understanding or Agreements Relating to Interpretation of,

or Participation in, Plan

The Participants have no written understandings or agreements

relating to interpretation of the Plan. Section II(C) of the Plan sets

forth how any entity registered as a national securities exchange or

national securities association may become a Participant.

G. Approval of Amendment of the Plan

Each of the Participants has approved this Twenty-Seventh Amendment

in accordance with Section III(C) of the Plan. The Participants also

received and incorporated feedback from the Plan Advisory Committee in

preparing this proposal. Each of the Plan's Participants has executed a

written amended Plan.

H. Description of Operation of Facility Contemplated by the Proposed

Amendment

Not applicable.

I. Terms and Conditions of Access

Section II(C) of the Plan provides that any entity registered as a

national securities exchange or national securities association under

the Exchange Act may become a Participant by: (1) becoming a

participant in the applicable Market Data Plans, as defined in Section

I(F) of the Plan; (2) executing a copy of the Plan, as then in effect;

(3) providing each then-current Participant with a copy of such

executed Plan; and (4) effecting an amendment to the Plan as specified

in Section III(B) of the Plan.

J. Method of Determination and Imposition, and Amount of, Fees and

Charges

This section is not applicable as the proposed amendment to the

Plan does not involve fees or charges.

K. Method and Frequency of Processor Evaluation

Not applicable.

L. Dispute Resolution

Section III(C) of the Plan provides that each Participant shall

designate an individual to represent the Participant as a member of an

Operating Committee. No later than the initial date of the Plan, the

Operating Committee shall designate one member of the Operating

Committee to act as the Chair of the Operating Committee. Any

recommendation for an amendment to the Plan from the Operating

Committee that receives an affirmative vote of at least two-thirds of

the Participants, but is less than unanimous, shall be submitted to the

Commission as a request for an amendment to the Plan initiated by the

Commission under Rule 608.

III. Solicitation of Comments

Interested persons are invited to submit written data, views and

arguments concerning the foregoing, including whether the amendment is

consistent with the Exchange Act and the rules thereunder. Comments may

be submitted by any of the following methods:

Electronic Comments

Use the Commission's internet comment form ( https://www.sec.gov/rules/sro.shtml ); or

Send an email to [email protected] . Please include

file number 4-631 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 4-631.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 ( http://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

information in submissions; you should submit only information that you

wish to make available publicly. We may redact in

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part or withhold entirely from publication submitted material that is

obscene or subject to copyright protection. All submissions should

refer to File Number 4-631 and should be submitted on or before June

25, 2026.

For the Commission, by the Division of Trading and Markets,

pursuant to delegated authority.\30\

Sherry R. Haywood,

Assistant Secretary.

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\30\ 17 CFR 200.30-3(a)(85).

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[FR Doc. 2026-11147 Filed 6-3-26; 8:45 am]

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