Federal Register, Volume 91 Issue 8 (Tuesday, January 13, 2026)

[Federal Register Volume 91, Number 8 (Tuesday, January 13, 2026)]
[Notices]
[Pages 1350-1357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-00416]

[[Page 1350]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-104563; File No. SR-NASDAQ-2025-109]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Proposed Rule Change To Extend the Exchange's U.S.
Equities Trading Hours to 23 Hours a Day, Five Days a Week

January 8, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 29, 2025, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

The Exchange proposes to amend the Exchange's Rulebook to provide
for the Exchange to trade equity securities and exchange traded
products 23 hours per day, five days per week.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings, and at the principal office of the Exchange.

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

In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
The purpose of the proposed rule change is to amend the Exchange's
Rulebook to provide for the Exchange to trade equity securities and
exchange traded products (``ETPs'') on a 23 hours per day, five days
per week basis (``23/5'').
Background and Overview
The history of the U.S. equities markets is one marked by
successive waves of change and technological innovation. Among other
things, these changes and innovations included the automation of
trading and the introductions of decimalization, algorithmic trading,
and colocation. When these innovations arose, they spurred equity
market structure to evolve to accommodate them. The latest change to
impact the markets is rising investor interest in trading U.S. equities
during overnight hours, especially among investors located outside of
the United States.\3\ To align Nasdaq with emerging investor interest
in trading outside of traditional U.S. market hours, Nasdaq now
proposes to extend its hours for trading equity securities and ETPs on
the Exchange from 16 hours per day, 5 days per week, to 23 hours per
day, 5 days per week.
---------------------------------------------------------------------------

\3\ Certain alternative trading systems (``ATS''), such as Blue
Ocean, already trade securities on an overnight basis. Meanwhile,
the Commission has approved several new and existing exchanges to
securities on an extended overnight basis, but none has begun to do
so. 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'').
---------------------------------------------------------------------------

Nasdaq has designed its proposal for 23/5 trading carefully. We
have solicited and we continue to solicit feedback from those who stand
to be impacted most by the proposal, including Nasdaq's listed
companies and market participants. Nasdaq is also an active participant
in ongoing industry discussions about how to address, in a coordinated
manner, market protections, halts, and corporate actions. We expect to
supplement and refine this proposal as we receive feedback and work
through technical and policy issues.
By way of background, Nasdaq presently trades securities in three
daily sessions during each weekday from Monday through Friday. First,
Nasdaq operates a Pre-Market Hours session from 4:00 a.m. to 9:30 a.m.
ET.\4\ Second, commencing at 9:30 a.m. with the execution of the Nasdaq
Opening Cross, Nasdaq conducts its Regular Market Hours trading session
until 4:00 p.m.\5\ Third, commencing at 4:00 p.m. with the execution of
the Nasdaq Closing Cross, Nasdaq conducts a Post-Market Hours \6\
trading session until 8:00 p.m.\7\ During weekdays, between the hours
of 8:00 p.m.-4:00 a.m. ET, the Exchange is closed to trading as it is
during all weekend hours.
---------------------------------------------------------------------------

\4\ See Rule Equity 1, Section 1(a)(9) (defining the term ``Pre-
Market Hours'' as ``the period of time beginning at 4:00 a.m. ET and
ending immediately prior to the commencement of Market Hours.). As
discussed below, the Exchange is proposing non-substantive changes
to this rule.
\5\ See Rule Equity 1, Section 1(a)(9) (defining the term
``Market Hours'' as the period of time beginning at 9:30 a.m. ET and
ending at 4:00 p.m. ET or such earlier time as may be designated by
Nasdaq on a day when Nasdaq closes early). As discussed below, the
Exchange proposes to rename this session ``Regular Market Hours''
and make other non-substantive conforming changes to this rule.
\6\ See Rule Equity 1, Section 1(a)(9) (defining the term
``Post-Market Hours'' as the period of time beginning immediately
after the end of Market Hours and ending at 8:00 p.m. ET). As
discussed below, the Exchange is proposing non-substantive changes
to this rule.
\7\ The Exchange uses different terms to describe each of its
trading sessions. For example, to refer to its pre-market hours
session, the Exchange uses varying terms, such as ``Pre-Market,''
``Early Market Hours,'' or ``Early Market.'' And to refer to its
post-market hours session, the Exchange uses varying terms, such as
``Post-Market,'' ``Extended Hours,'' and ``Extended Market Hours.''
As part of this filing, the Exchange proposes to harmonize disparate
and inconsistent references to these concepts to avoid confusion.
Throughout the Rulebook, as amended, the Exchange proposes to define
the terms ``Pre-Market Hours'' and ``Post-Market Hours'' exclusively
to refer to those specific trading periods. In addition, the
Exchange proposes to define the term ``Extended Hours'' to refer
more generally to trading that occurs outside of Regular Market
Hours. See proposed Rule 1, Equity 1, Sections 1(a)(20)-(21) and
(23) (defining the terms ``Pre-Market Hours,'' Post-Market Hours, ``
and ``Extended Hours,'' respectively).
---------------------------------------------------------------------------

During its current Pre-Market and Post-Market trading sessions,
Nasdaq offers more limited trading functionality than it does during
the Regular Market Hours trading session and trading during that period
is subject to less stringent regulation. For example, outside of
``regular trading hours,'' \8\ most aspects of the SEC's Regulation
National Market System (``Reg. NMS'') \9\ do not apply, including the
prohibition against trade-throughs.\10\ Meanwhile, the Exchange does
not offer certain order types during these trading sessions, such as
pegged orders. Moreover, during extended hours trading sessions,
liquidity tends to be lower than it is during regular trading

[[Page 1351]]

hours. Stock prices, which are not linked to an NBBO during extended
hours trading, may differ from market to market, and spreads may be
wider. Additionally, stocks often experience more volatile trading
activity during these sessions. Accordingly, to the extent that markets
like Nasdaq allow trading to occur in extended hours trading sessions,
FINRA requires brokers that participate in these sessions to
affirmatively disclose to investors that extended hours trading carries
greater risks than trading during regular market hours.\11\
---------------------------------------------------------------------------

\8\ See 17 CFR 242.600(b)(88) (defining the term ``regular
trading hours'' to mean 9:30 a.m.-4 p.m. Eastern Time).
\9\ 17 CFR 242.600-614.
\10\ See 17 CFR 242.600(b)(105) (defining a trade-through, for
purposes of Rule 611 of Reg. NMS, as the purchase or sale of an NMS
stock ``during regular trading hours'').
\11\ See FINRA Rule 2265 (Extended Hours Trading Risk
Disclosure).
---------------------------------------------------------------------------

Although trading volume in extended hours trading tends to be
considerably lower than it is during regular market hours, Nasdaq has
observed a growing interest in trading during overnight hours,
particular among investors located in Asia and other foreign
jurisdictions where business hours do not coincide, fully or otherwise,
with U.S. regular market hours. For these investors, extended market
hours trading sessions often provide some real-time access to Nasdaq
during their business hours, but for many, Nasdaq is closed during
hours when they are most apt to trade. Increasingly, these investors
are turning to ATSs that offer overnight trading, such as Blue Ocean,
Bruce, Interactive Brokers, and OTC Moon. They are also increasingly
utilizing trading platforms that provide access to markets for digital
assets, including cryptocurrencies, tokenized assets, and tokenized
securities, on a 24/7 basis. Nasdaq submits its proposal to extend its
trading hours to compete for order flow from these investors, as well
as to position itself favorably in the future to participate in markets
that trade digital assets.
Overview of Nasdaq's Proposal for 23/5 Trading
Going forward, Nasdaq proposes to conduct trading 23 hours per day,
5 days per week. It proposes doing so in two trading sessions rather
than three. First, it will conduct a ``Day'' trading session, which
will be the same and comprise its existing Pre-Market Hours, Regular
Market Hours, and Post-Market Hours trading sessions.\12\ The Day
Session will commence at 4:00 a.m. ET and end at 8:00 p.m. ET, and it
will continue to feature both the Nasdaq Opening Cross and the Nasdaq
Closing Cross. Second, Nasdaq will conduct a ``Night'' trading session,
which will commence at 9:00 p.m. ET and end at 4:00 a.m. ET the next
calendar day.\13\ As we explain below, between 8:00 p.m. and 9:00 p.m.
ET on each weekday, the Exchange will pause trading on its market to
conduct maintenance, testing, and to process those corporate actions,
such as mergers, stock splits, and dividends, that will become
effective the following trading day. The pause will also allow for
market participants to process and clear trades before proceeding to a
new trading day. Nasdaq proposes to keep its markets closed during all
weekend hours, except that the trading week will commence with a Night
Session on Sunday nights at 9:00 p.m. ET.\14\ The trading week will end
at the conclusion of the Day session on Friday.\15\
---------------------------------------------------------------------------

\12\ See Rule Equity 1, Section 1(a)(9).
\13\ See proposed Rule Equity 1, Section 1(a)(19) (defining the
term ``Night Session'' as ``the time between 9:00 p.m. on one
calendar day through 4:00 a.m. the next calendar day Sunday through
Thursday provided that each such next calendar day is a Business
Day.''). To enhance clarity and consistent with approved rules of
other national securities exchanges, and specifically 24X and NYSE
Arca, the Exchange proposes to define the term ``Business Day'' to
means any Sunday from 9 p.m. ET through Monday, and any Tuesday,
Wednesday, Thursday or Friday other than any of the following U.S.
holidays if they are celebrated on a Monday, Tuesday, Wednesday,
Thursday or Friday: New Year's Day, Martin Luther King Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Juneteenth National
Independence Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day Eastern Time, or such other U.S. holiday(s) as
published by the Exchange from time to time). See proposed Rule
Equity 1, Section 1(a)(17).
\14\ See proposed Rule Equity 1, Section 1(a)(19) (defining the
term ``Night Session'').
\15\ See proposed Rule Equity 1, Section 1(a)(18). The Exchange
proposes a non-substantive change to define the term ``Day Session''
in proposed Rule 1 Equity 1, Section 1(a)(18) as follows: ``[t]he
term ``Day Session'' means the time between 4:00 a.m. Eastern Time
and 8:00 p.m. Eastern Time on Business Days, during which period the
Pre-Market Hours, Regular Market Hours and Post-Market Hours are in
operation.'' The Exchange believes this non-substantive change is
designed to facilitate application of the rules by combining
references to the three current trading sessions into one broader
day trading session for referencing purposes only thereby
simplifying the conceptualization and application of the proposed
rules. See id.
---------------------------------------------------------------------------

On a holiday or another day when the Exchange is closed for
business, the closure will be effective as of 8:00 p.m. ET on the
calendar day prior to the closure date, and the market will reopen at
9:00 p.m. ET on the closure date, unless the closure date is a Friday,
in which case the market will reopen on Sunday evening at 9:00 p.m.
ET.\16\ On a day when Nasdaq closes the market early, it will resume
trading at 9:00 p.m. ET on the same calendar day, unless again, the
early closure date is a Friday, in which case the Exchange will resume
trading on Sunday evening at 9:00 p.m. ET.\17\
---------------------------------------------------------------------------

\16\ See proposed Rule Equity 1, Section 1(a)(19).
\17\ See proposed Rule Equity 1, Section 1(a)(19).
---------------------------------------------------------------------------

Consistent with the approved rules of other national securities
exchanges that are similarly proposing to extend their trading hours
overnight,\18\ Nasdaq proposes to launch the operation of its 23/5
market upon the availability of the Securities Information Processor
(``SIP'') to operate during the Night session.\19\
---------------------------------------------------------------------------

\18\ See 24X Approval Order, supra note 3, 89 FR at 97105-07
(approving application of 24X to trade overnight provided that it
may not begin doing so until the Equity Data Plans have announced
their preparedness to collect, consolidate, process, and disseminate
quotation and transaction information during the overnight hours;
the SEC would nullify approval of 24X rules governing overnight
trading if such readiness does not occur within 18 months of the
issuance of the approval order); NYSE Arca Approval Order, supra
note 3. See also 24X Rule 1.5(c); NYSE Arca Rule 7.34-E.
\19\ See proposed Rule Equity 1, Section 1(19) (defining the
term ``Night Session'' and further providing that (1) the Exchange
shall not commence operation of the Night 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 Night Session that is equivalent to the mechanism
established for Exchange trading hours during Regular Market 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 Night Session; (2)
that prior to commencing operation during the Night 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 Night
Session and that such Equity Data Plans are prepared to collect,
consolidate, process and disseminate quotation and transaction
information at all times during the Night Session (``Night Session
Proposed Rule Change''); and (3) that if the Night 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 Night
Session). See id.
---------------------------------------------------------------------------

To facilitate this proposal to extend Nasdaq's trading hours,
Nasdaq proposes to amend numerous rules in its Rulebook. Rather than
catalogue all such proposed changes, the majority of which are non-
substantive changes to reflect revised trading times, we focus below on
describing only those changes that will have a material impact on the
operation of the Nasdaq Stock Market.
Before we describe what Nasdaq proposes to change, we first want to
make clear what will remain the same. The following aspects of Nasdaq's
trading system and procedures will not change when trading equities and
ETPs on a 23/5 basis:

Listing rules
Membership rules
Rules of conduct
Market Maker obligations
Ranking, display, priority and decrementation rules
Disciplinary rules and enforcement
Opening and Closing Crosses

[[Page 1352]]

Clearly Erroneous protections
The ``Day'' Trading Session
The new Day trading session will combine and incorporate, without
substantive changes, all elements of what are now the Pre-Market
Hours,\20\ Regular Market Hours,\21\ and Post-Market Hours \22\ trading
sessions. Going forward, the Rules will delineate these sessions as
distinct sub-parts of the Day Session.\23\ During the Day Session, all
existing requirements, procedures, behaviors and processes, including
those governing the Opening and Closing Crosses, halts, routing, order
types, attributes, times-in-force, order entry protocols, connectivity,
market data, etc., all will persist in their current form, with only
minor conforming changes (described below). For example, Order Type
availability and behavior in the Pre-Market Hours of 4:00-9:30 a.m. ET
will remain the same going forward as it is now.\24\ As another
example, limits on Order Type availability in Post-Market trading will
continue to apply.\25\
---------------------------------------------------------------------------

\20\ See Rule Equity 1, Section 1(a)(9) (defining the terms
``Market Hours,'' ``Pre-Market Hours,'' and ``Post-Market Hours'').
To effect this change, the Exchange proposes a non-substantive term
to define the term ``Pre-Market Hours'' as that subset of the Day
Session comprising the trading session that begins at 4:00 a.m. and
continues until 9:30 a.m. on Business Days. See proposed Rule Equity
1, Section 1(a)(20).
\21\ See Rule Equity 1, Section 1(a)(9). To effect this change,
the Exchange proposes a non-substantive term to define the term
``Regular Market Hours'' as that subset of the Day Session
comprising the trading session that begins at 9:30 a.m. and
continues until 4:00 p.m. or 4:15 p.m. on Business Days. See
proposed Rule Equity 1, Section 1(a)(22).
\22\ See Rule Equity 1, Section 1(a)(9). To effect this change,
the Exchange proposes a non-substantive term to define the term
``Post-Market Hours'' as that subset of the Day Session comprising
the trading session that begins at 4:00 p.m. or 4:15 p.m. and that
continues until 8:00 p.m. on Business Days. See proposed Rule Equity
1, Section 1(a)(21).
\23\ See proposed Rule Equity 1, Sections 1(a)(18), and (20)-
(21).
\24\ See proposed Rule 4702.
\25\ See proposed Rule 4702. Consistent with the behavior of
such order during extended hours, the Exchange proposes to amend
Rule 4702(b)(3)(A), that during the Night Session, as is the case
during Pre- and Post-Market Hours, a Non-Displayed Order will be
posted at its entered limit price without adjustment. See proposed
Rule 4702(b)(3)(A). The Exchange further proposes to amend Rule
4702(b)(4) to provide that, during the Night Session, as is the case
today with respect to the Pre- and Post-Market Hours, a Post-Only
Order will be processed in a manner identical to Regular Market
Hours with respect to locking or crossing Orders on the Nasdaq Book,
but will not be cancelled or have its price adjusted with respect to
locking or crossing the quotations of other market centers. See
proposed Rule 4702(b)(4). The Exchange believes this proposed change
is appropriate because the Night Session is effectively an extension
of the Exchange's current extended hours, and this proposed change
conforms the behavior of this order during the current extended
hours through the hours of operation of the Night Session, as
proposed.
---------------------------------------------------------------------------

The ``Night'' Trading Session
By contrast to the Day trading session, the proposed Night trading
session will be an entirely new trading session that will cover a
period of the night in the Eastern Time Zone in the United States in
which trading on the Exchange does not now occur.\26\ In many ways, the
Night session will be like the existing Post-Market Hours and Pre-
Market Hours trading sessions in that it will feature limited
functionality to reflect the inapplicability of Reg. NMS and reduced
trading activity. The Night Session will also feature a limited number
of Order Types and Attributes.
---------------------------------------------------------------------------

\26\ See proposed Rule 1 Equity, Section 1(a)(19).
---------------------------------------------------------------------------

Specifically, the following Order Types will not be available
during the Night Session: Supplemental; \27\ Market Maker Peg; \28\
Market On Open (``MOO''); \29\ Limit on Open (``LOO''); \30\ Opening
Imbalance Only (``OIO Order''); \31\ Market on Close (``MOC Order'');
\32\ Limit on Close (``LOC Order''); \33\ Imbalance-Only (``IO
Order'').\34\ Company Direct Listing; \35\ Extended Trading Close; \36\
Midpoint Peg Post-Only; \37\ Midpoint Extended Life Order (``M-ELO'');
\38\ and Midpoint Extended Life Order Plus Continuous Book (``M-ELO+CB
Order'').\39\
---------------------------------------------------------------------------

\27\ A ``Supplemental Order'' is an Order Type with a Non-
Display Order Attribute that is held on the Nasdaq Book in order to
provide liquidity at the NBBO through a special execution process
described in Rule 4757(a)(1)(D). A Supplemental Order may be entered
at any time during Pre-Market Hours, or Regular Market Hours, but is
available for potential execution only during Market Hours. Any
Supplemental Orders still on the Nasdaq Book at the conclusion of
Market Hours will be cancelled. See Rule 4702(b)(6).
\28\ A ``Market Maker Peg Order'' is an Order Type designed to
allow a Market Maker to maintain a continuous two-sided quotation at
a displayed price that is compliant with the quotation requirements
for Market Makers set forth in Rule Equity 2, Section 5(a)(2). The
Exchange is proposing to provide Market Maker Peg Orders are not
available during the Night Session, and, further, that Market Maker
Peg Orders designated for the Night Session will be cancelled. See
proposed Rule 4702(b)(7)(A).
\29\ A ``Market On Open Order'' or ``MOO Order'' is an Order
Type entered without a price that may be executed only during the
Nasdaq Opening Cross. Subject to the qualifications provided in Rule
4702(b)(8), MOO Orders may be entered between 4 a.m. ET and
immediately prior to 9:28 a.m. ET. An MOO Order will execute only at
the price determined by the Nasdaq Opening Cross. See Rule
4702(b)(8).
\30\ A ``Limit On Open Order'' or ``LOO Order'' is an Order Type
entered with a price that may be executed only in the Nasdaq Opening
Cross, and only if the price determined by the Nasdaq Opening Cross
is equal to or better than the price at which the LOO Order was
entered. Subject to the qualifications provided in Rule 4702(b)(9),
LOO Orders may be entered between 4 a.m. ET and immediately prior to
9:28 a.m. See Rule 4702(b)(9).
\31\ An ``Opening Imbalance Only Order'' or ``OIO Order'' is an
Order Type entered with a price that may be executed only in the
Nasdaq Opening Cross and only against MOO Orders, LOO Orders, or
Early Market Hours Orders (as defined in Rule 4752). OIO Orders may
be entered between 4:00 a.m. ET until the time of execution of the
Nasdaq Opening Cross, but may not be cancelled or modified at or
after 9:25 a.m. ET. See Rule 4702(b)(10)(A).
\32\ A ``Market On Close Order'' or ``MOC Order'' is an Order
Type entered without a price that may be executed only during the
Nasdaq Closing Cross. Subject to the qualifications provided in Rule
4702(b)(11)), MOC Orders may be entered between 4 a.m. ET and
immediately prior to 3:55 p.m. See Rule 4702(b)(11).
\33\ A ``Limit On Close Order'' or ``LOC Order'' is an Order
Type entered with a price that may be executed only in the Nasdaq
Closing Cross and only if the price determined by the Nasdaq Closing
Cross is equal to or better than the price at which the LOC Order
was entered, subject to qualifications set out in Rule 4702(b)(12).
Subject to qualifications set out in the Rule, LOC Orders may be
entered, cancelled, and/or modified between 4 a.m. ET and
immediately prior to 3:50 p.m. ET. See Rule 4702(b)(12).
\34\ An ``Imbalance Only Order'' or ``IO Order'' is an Order
entered with a price that may be executed only in the Nasdaq Closing
Cross and only against MOC Orders or LOC Orders. IO Orders may be
entered between 4:00 a.m. ET until the time of execution of the
Nasdaq Closing Cross. See Rule 4702(b)(13).
\35\ A ``Company Direct Listing Order'' or ``CDL Order'' is a
``market order'' entered without a price that may be executed only
in the Nasdaq Halt Cross for a Direct Listing with a Capital Raise
(as defined in Listing Rule IM-5315-2). See Rule 4702(b)(16). The
Exchange proposes to amend Rule 4702(b)(16)(A) to provide that CDL
Orders are not eligible to participate in the Night Session, and,
further, that CDL Orders designated for the Night Session will be
rejected. See proposed Rule 4702(b)(16)(A).
\36\ An ``Extended Trading Close'' or ``ETC'' Order is an Order
Type applicable to Nasdaq-listed securities that may be executed
only during the Extended Trading Close and only at the Nasdaq
Official Closing Price, as determined by the Nasdaq Closing Cross.
See Rule 4702(b)(17). The Exchange proposes to amend Rule
4702(b)(17) to provide that ETC Orders are not eligible to
participate in the Night Session, and that ETC Orders designated for
the Night Session will be rejected. See proposed Rule
4702(b)(17)(A).
\37\ A ``Midpoint Peg Post-Only Order'' (``MPPO'') is an Order
Type with a Non-Display Order Attribute that is priced at the
midpoint between the NBBO and that will execute upon entry only in
circumstances where economically beneficial to the party entering
the Order. The Midpoint Peg Post-Only Order is available during
Market Hours only. See Rule 4702(b)(5).
\38\ A ``Midpoint Extended Life Order'' is an Order Type with a
Non-Display Order Attribute that is priced at the midpoint between
the NBBO and that will not be eligible to execute until a minimum
time period has passed after acceptance of the order by the System.
Eligible Midpoint Extended Life Orders may only execute against
other eligible Midpoint Extended Life Orders and M-ELO+CB Orders.
See Rule 4702(b)(14). The Exchange proposes to amend subparagraph
(A) of Rule 4702(b)(14) to provide that Midpoint Extended Life
Orders are not eligible to participate in the Night Session, and
that Midpoint Extended Life Orders designated for the Night Session
will be rejected. See proposed Rule 4702(b)(14)(A).
\39\ A ``Midpoint Extended Life Order Plus Continuous Book'' or
``M-ELO+CB'' is an Order Type that has all of the characteristics
and attributes of a Midpoint Extended Life Order, except that a M-
ELO+CB that satisfies a specified holding period is eligible to
execute (at the midpoint of the NBBO) against other eligible M-
ELO+CBs, eligible Midpoint Extended Life Orders, and as described in
the rule, Non-Displayed Orders with Midpoint Pegging resting on the
Exchange's Continuous Book. See Rule 4702(b)(15). The Exchange
proposes to amend subparagraph (A) of Rule 4702(b)(15) to provide
that M-ELO+CB orders are not eligible to participate in the Night
Session, and that M-ELO+CB orders designated for the Night Session
will be rejected. See proposed Rule 4702(b)(15)(A).

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

[[Page 1353]]

As proposed, orders for the Night Session may be entered into the
System (or previously entered orders cancelled or modified) from 9:00
p.m. ET until 4:00 a.m. ET in accordance with the hours of operation
for the Night Session.\40\
---------------------------------------------------------------------------

\40\ To effect this change, the Exchange proposes to provide in
Rule 4756(a)(3) that orders for the Night Session may be entered
into the System (or previously entered Orders cancelled or modified)
from 9 p.m. until 4:00 a.m. ET in accordance with the hours of
operation for the Night Session. See proposed Rule 4756(b). The
Exchange further proposes to provide in Rule 4120(a)(10)(C) that the
Exchange will begin accepting orders for the Night Session at 9:00
p.m. ET in accordance with Rule 4756 and will trade thereafter
through the Night Session. Similarly, and with respect to entry of
quotes by Nasdaq Market Makers, the Exchange proposes to provide
that during the Night Session, Nasdaq Market Makers and Nasdaq ECNs
can enter quotes into the System from 9:00 p.m. ET to 4:00 a.m. ET.
See proposed Rules 4756(a))(10)(C), 4756(b).
---------------------------------------------------------------------------

Similarly, the following Order Attributes will not be available
during the Night Session: Primary Pegging; \41\ Market Pegging; \42\
Midpoint Pegging; \43\ and Discretion (Pegging).\44\ With respect to
Time-in-Force \45\ order attributes, orders entered during the Night
Session that are designated to deactivate after 4:00 a.m. ET will
deactivate at the conclusion of the Night Session at 4:00 a.m. ET.\46\
---------------------------------------------------------------------------

\41\ See Rule 4703(d). Pegging is a)n Order Attribute that
allows an Order to have its price automatically set with reference
to the National Best Bid and Offer; provided, however, that if
Nasdaq is the sole market center at the Best Bid or Best Offer (as
applicable), then the price of any Displayed Order with Primary
Pegging will be set with reference to the highest bid or lowest
offer disseminated by a market center other than Nasdaq. Pegging is
available only during Market Hours. Nasdaq offers three varieties of
Pegging: Primary Pegging, Market Pegging, and Midpoint Pegging.
Primary Pegging means Pegging with reference to the Inside Quotation
on the same side of the market. See id.
\42\ Market Pegging means Pegging with reference to the Inside
Quotation on the opposite side of the market. Pegging is available
only during Market Hours. See Rule 4703(d).
\43\ See Rule 4703(d). Midpoint Pegging means Pegging with
reference to the midpoint between the Inside Bid and the Inside
Offer. Pegging is available only during Market Hours. See id.
\44\ Discretion is an Order Attribute under which an Order has a
non-displayed discretionary price range within which the entering
Participant is willing to trade; such an Order may be referred to as
a ``Discretionary Order.'' The Discretion Order Attribute may be
combined with the Pegging Order Attribute, in which case either the
price of the Order or the discretionary price range or both may be
pegged in the ways described in Rule 4702(d) with respect to the
Pegging Order Attribute. As discussed above, however, and consistent
with its proposal with respect to the Pegging order attribute during
the Night Session, the Exchange proposes to provide that during the
Night Session, the Discretion attribute may not be combined with the
Pegging Order attribute. See proposed Rule 4703(g) (providing that
the Discretion order attribute is available during the Night
Session, provided however, that during the Night Session, the
Discretion order attribute may not be combined with the Pegging
Order attribute, and further, that orders designated for the Night
Session that combine the Discretion attribute with a Pegging
attribute will be rejected).
\45\ The ``Time-in-Force'' assigned to an Order means the period
of time that the Nasdaq Market Center will hold the Order for
potential execution. Participants specify an Order's Time-in-Force
by designating a time at which the Order will become active and a
time at which the Order will cease to be active. See Rule 4702.
\46\ To effect this change, the Exchange proposes to provide in
Rule 4703(a) that available times for deactivating orders include a
specified time identified by the Participant; provided, however,
that an Order Specifying an expire time after 4:00 a.m. ET will
expire at the conclusion of the Night Session at 4:00 a.m. ET. See
proposed Rule 4703(a). The Exchange further proposes to provide that
an order that is designated to deactivate at 8:00 p.m. may be
referred to as having a Time in Force of ``System Hours Day'' or
``SDAY''; provided, however, that an Order designated for
participation in the Night Session having a Time in Force of
``System Hours Day'' or ``SDAY'' will deactivate at 4:00 a.m. ET.
See proposed Rule 4703(a)(2). The Exchange believes these proposed
changes would enhance transparency with respect to the operation of
the Exchange rules consistent with the protection of investors and
the public interest because the Exchange is proposing to cancel all
orders outstanding in the system at the conclusion of the Night
Session, and, therefore, orders with a time in force extending
beyond the hours of operation for the Night Session would be
cancelled.
---------------------------------------------------------------------------

However, the Night session will differ from Post-Market Hours and
Pre-Market Hours trading in several respects. Below is a summary of the
key functionality of the Night session as it will be available at its
launch date. Note that the Exchange plans to introduce additional
functionality to the Night Session in the future, some of which is also
described below.
Connectivity: The Exchange will require market
participants to use ports specifically designated for use during the
Night session.\47\ Market participants that have already purchased
ports from the Exchange may continue using them to trade during the Day
Session, but if participants wish to trade during the Night session,
then they will need to use a separate Night Session port to do so.\48\
The Exchange proposes this requirement to use Night session ports
because the Exchange will run a distinct instance of its Trading System
during the Night session, and ports used for Day session will only be
capable of connecting to the instance of the Trading System used to
operate the Day session. Day ports will be operational from 4:00 a.m.
ET through 8:00 p.m. ET, and Night ports will be operational from 9:00
p.m. ET through the following day at 4:00 a.m. ET.\49\
---------------------------------------------------------------------------

\47\ See proposed Rule 4702(a) (providing that, to trade in the
Night Session, market participants will be required to use ports
specifically designated for use during the Night Session, and that
ports used for the Day Session will not connect market participants
to trading systems for the Night Session). The Exchange further
proposes to provide that the following protocols will be available
during the Night Session: OUCH 5, Core FIX, and FIX. See proposed
Rule 4702(a).
\48\ See id.
\49\ To effect this change, the Exchange proposes to provide
that Night Session ports will be operational from 9:00 p.m. ET
through the following day at 4:00 a.m. ET in accordance with the
definition of Night Session and that Day ports will be operational
from 4:00 a.m. ET through 8:00 p.m. ET on Business Days. See
proposed Rule 4702(a).
---------------------------------------------------------------------------

Times-in-Force: As noted above, the Exchange will employ
the Time-in-Force Order Attribute during the Night session as it does
now during the Day session, with two changes designed to reflect the
Exchange's proposed hours of operations. First, the Exchange proposes
to (1) amend Rule Equity 1, Section 1(a)(9) to update the definition of
the term ``System Hours''--which is currently defined as the hours of
4:00 a.m. ET through 8:00 p.m. ET--to reflect the Exchange's proposed
hours of operation,\50\ and (2) amend Rule 4703(a) to provide that when
an Order may be deactivated at the end of ``System Hours,'' the term
``System Hours'' refers to the period from 9:00 p.m. ET to the
following calendar day at 8:00 p.m. ET, in accordance with the
definition of ``System Hours'' in Rule Equity 1, Section 1(a)(9).\51\
---------------------------------------------------------------------------

\50\ See proposed Rule 1, Equity 1, Section 1(a)(9). As
proposed, the term ``System Hours'' would mean the 23-hour time
period beginning at 9:00 p.m. ET on one calendar day and ending at
8:00 p.m. ET (or such earlier time as may be designated by Nasdaq on
a day when Nasdaq closes early) on the next calendar day for the
period from Sunday at 9:00 p.m. ET through Friday at 8:00 p.m. ET in
accordance with definitions of Day Session (including the Pre-Market
Hours, Regular Market Hours, Post-Market Hours) and Night Session.
The Exchange further proposes to modify Equity 1, Section 1(a)(9) to
delete the definitions of ``Market Hours,'' ``Pre-Market Hours'' and
``Post-Market Hours,'' as the Exchange is proposing to define each
such term separately elsewhere in Rule Equity 1, Section 1.
\51\ See proposed Rule 4703(a). As proposed, the Exchange would
provide that the available times for deactivating an order include,
among others, at the end of System Hours, in accordance with the
definition of ``System Hours'' in Rule Equity 1, Section 1(a)(9).
See proposed Rule 4703(a).
---------------------------------------------------------------------------

Trading Halts: The Exchange will address trading halts,
including for certain corporate actions, in either an amendment to this
rule filing or in a discrete rule filing prior to the implementation of
23/5 trading on Nasdaq.\52\
---------------------------------------------------------------------------

\52\ Consistent with the approved rules of another national
securities exchange, and specifically, 24X Rule 11.15(c)(5), the
Exchange proposes to provide in Rule 4120(a)(10)(D) that during the
Night Session, if the primary listing market determines to halt
trading, or delay commencement of trading, in one of its listed
securities in accordance with such primary listing market's rules
(e.g., with regard to material corporate actions with respect to a
particular security (i.e., corporate actions that may affect a stock
price, stock additions and subtractions, and similar actions) or
material news announcements), the Exchange will halt trading, or
delay the commencement of, trading (as applicable), in such security
until trading resumes on the primary listing market for the
security. Further, the Exchange proposes to provide that if trading
in a security is halted by the primary listing market before the
commencement of the Night Session and continuing into the Night
Session, or during the Night Session, the Exchange will halt trading
in the security until trading resumes on the primary listing market
for the security. See proposed Rule 4120(a)(10)(D); 24X Rule
11.15(c)(5). The Exchange also proposes a technical, non-substantive
conforming change to renumber subparagraphs (10)-(15) of current
Rule 4120(a) as subparagraphs (11)-(16).

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

[[Page 1354]]

Volatility Moderation Mechanisms: As of the date of
submission of this rule filing, Nasdaq has yet to determine which, if
any, market volatility moderation mechanisms it will employ during the
Night Session. Today, during the Post-Market trading session, the
Exchange does not employ industry-wide mechanisms that apply only
during Regular Market trading hours, including Limit-Up-Limit Down and
Market-wide Circuit Breakers.\53\ Nevertheless, the Exchange and its
peers, through the UTP Plan Operating Committee, are discussing whether
to employ these mechanisms or a similar industry-wide protection
mechanism. Accordingly, Nasdaq intends to address this topic either in
an amendment to this rule filing, or in a separate rule filing.
---------------------------------------------------------------------------

\53\ Nasdaq will implement such industry-wide protections if the
industry or the Commission determines to add them to overnight
trading sessions, pursuant to industry plans or otherwise.
---------------------------------------------------------------------------

Surveillance: During the Night session, the Exchange will
have a dedicated team to conduct real-time surveillance, process
Clearly Erroneous \54\ filings, and as needed, implement trading halts.
Real-time surveillance for the Night session will be similar to real-
time surveillance in other sessions today. Real-time surveillance
includes monitoring for unusual activity, the detection of potential
manipulation and other market abuse, as well as coordination with
Nasdaq departments and member firm representatives as necessary to
monitor and or resolve unexpected matters. The Exchange will utilize
the Nasdaq Market Surveillance system to electronically monitor and
alert trading anomalies. The Clearly Erroneous process and trading
halts for listed securities will be handled by the Exchange
surveillance staff, similar to all other sessions, and in accordance
with the rules applicable to Clearly Erroneous filings and Trading
Halts.
---------------------------------------------------------------------------

\54\ To effect this change, the Exchange proposes to amend
Equity 1, Rule 11890 (``Clearly Erroneous Transactions'') to
incorporate the Night Session as appropriate throughout the various
provisions in the rule. Specifically, the Exchange proposes to
insert references to the Night Session in the following provisions:
romanette (iii) of Rule 11890(a)(2)(A) (with respect to filing time
periods); subparagraph (2) of Rule 11890(C), including the table
under romanette (i) (with respect to eligibility for review) and
romanettes (ii) and (iii) thereunder; subparagraph (3) of Rule
11890(a)(3)(D)(3) (with respect to trades on the Nasdaq Bond
Exchange); and romanette (i) of Rule 11890(b) (with respect to
procedures for reviewing transactions on Nasdaq's own motion).The
Exchange believes this proposed change is appropriate because the
use of clearly erroneous executions rules to address volatility
during the Night Session is consistent with (1) Nasdaq's regulatory
framework for addressing volatility during its extended hours
sessions when other regulatory protections are not in effect, (2)
the regulatory framework applied to other national securities
exchanges, and (3) the approved rules of 24X. See e.g., CboeBZX Rule
11.17; Nasdaq Equity 11, Rule 11890; NYSE Arca Rule 7.10-E; 24X Rule
11.14.
---------------------------------------------------------------------------

Market Data: The Exchange proposes to disseminate the same
market data information during the Night session as are available
during the Day session.
Risk Disclosures: In accordance with Equity 2, Section 20,
the Exchange proposes to supplement its current customer disclosures
concerning risks associated with trading during Pre-Market Hours and
Post-Market Hours to add six additional potential risks associated with
trading during the Night Session based on the approved rules of 24X and
NYSE Arca.\55\ As proposed, the Exchange would require that its members
make certain disclosures to investors concerning risks associated with
trading during Pre-Market Hours, Post-Market and the Night Session.\56\
These proposed disclosures will enhance transparency by warning
customers that trading during these extended hours involves material
trading risks, as outlined in the proposed rules.\57\
---------------------------------------------------------------------------

\55\ See, e.g., 24X Approval Order, supra note 3; 24X Rule 3.21
(``Customer Disclosures''); NYSE Arca Approval Order, supra note 3;
NYSE Arca Rule 7.34-E(T) (``Trading Sessions'').
\56\ See proposed Rule Equity 2, Section 20 (8)(A)-(F)
(providing, in part, that trading during the Night Session may
present risks, including (1) the risk of trading during hours in
which the primary listing market may not be open, (2) the risk of
trading during hours in which there may be limited or different
regulatory protections, (3) the risk of having limited trading
alternatives, (4) risks related to continuous trading, (5) risks of
trading during hours in which financial market infrastructure
companies may be closed), and (6) unforeseen risks beyond those
enumerated in the proposed rules).
\57\ See proposed Rule Equity 2, Section 20.
---------------------------------------------------------------------------

Equity Data Plans: Consistent with the approved rules of
24X and NYSE Arca,\58\ the Exchange proposes to provide that the
Exchange would not commence operation of the Night Session unless the
Equity Data Plans (as proposed to be defined in Rule Equity 1, Section
1(a)(16)) \59\ have established a mechanism to collect, consolidate,
process and disseminate quotation and transaction information at all
times during Extended Trading Hours that is equivalent to the mechanism
established for Regular Market 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 Night Session.\60\
---------------------------------------------------------------------------

\58\ See 24X Rule 1.5(c); NYSE Arca Rule 7.34-E.
\59\ As proposed, the term The term ``Equity Data Plans'' means
the effective national market system plans that govern the
collection, consolidation, processing and dissemination of equity
market data for NMS stocks and oversee 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 thereto to
the named Plans. See proposed Rule Equity 1, Section 1(a)(16).
\60\ Also consistent with the approved rules of 24X and NYSE
Arca, the Exchange further proposes to provide that, prior to
commencing operation during the Night 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 Night Session and
that such Equity Data Plans are prepared to collect, consolidate,
process and disseminate quotation and transaction information at all
times during the Night Session (``Night Session Proposed Rule
Change''). If the Night Session Proposed Rule Change is not filed
within 18 months of the Commission's approval of this proposed rule
change, the Exchange will promptly file a proposed rule change to
remove the rules that apply to the Night Session. See, e.g.,
proposed Rule Equity 1, Section 1(a)(19); 24X Rule 1.5(c); NYSE Arca
Rule 7.34-E.
---------------------------------------------------------------------------

Transition From Night to Day Session
The following describes proposed procedures for the Exchange to
transition from a Night session to a Day session at 4:00 a.m. ET each
weekday. At the conclusion of the Night Session at 4:00 a.m. ET, all
orders outstanding on the Nasdaq Book as of 4:00 a.m. ET will be
canceled.\61\ The Exchange currently begins accepting new orders for
the Pre-Market Session at 4:00 a.m. ET,\62\ and, as proposed, this
would remain unchanged.
---------------------------------------------------------------------------

\61\ To effect this change, the Exchange proposes to provide in
proposed Rule 4120(a)(10)(C) that at the conclusion of the Night
Session at 4:00 a.m. ET, all orders outstanding in the Nasdaq Book
as of 4:00 a.m. ET shall be cancelled. See proposed Rule
4120(a)(10)(C).
\62\ See Rule 4752(b).

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

[[Page 1355]]

Weekday 8:00-9:00 p.m. ET Trading Pause
As proposed, upon conclusion of the Day session on each weekday, at
8:00 p.m. ET, trading on the Exchange will pause for one hour.\63\ It
will resume with commencement of the Night session at 9:00 p.m. ET.\64\
All orders outstanding on the Nasdaq Book as of 8:00 p.m. ET will be
canceled.\65\ The Exchange will begin accepting new orders at 9:00
p.m., Sunday through Thursday and will trade thereafter throughout the
Night Session.\66\ Trades occurring at or after the commencement of a
Night Session and before midnight will be assigned a trade date of the
following day.\67\ At the conclusion of the Night Session at 4:00 a.m.
ET, all orders outstanding in the Nasdaq Book as of 4:00 a.m. ET will
be cancelled.\68\
---------------------------------------------------------------------------

\63\ See proposed Rule 4120(a)(10). To effect this change, the
Exchange proposes to provide in proposed Rule 4120(a)(10) that the
Exchange shall halt trading at the conclusion of the Day Session at
8:00 p.m. ET and resume trading with the commencement of the Night
Session at 9:00 p.m. ET, on Monday, Tuesday, Wednesday and Thursday,
in accordance with Rule Equity 1, Sections 1(a)(18)-(19) of these
rules. As further proposed, weekday trading would commence with a
Night Session beginning at 9:00 p.m. ET, on Sunday. See proposed
Rule 4120(a)(10).
\64\ See proposed Rule 4120(a)10. Consistent with the approved
rules of another national security exchange, and specifically 24X
Rule 11.15(c)(4), the Exchange proposes to provide that the Exchange
may pause trading during the Night Session at such other times as
the Exchange in the exercise of its regulatory functions may
determine is appropriate, and that the Exchange will announce in
advance when such trading will pause and when it will resume
pursuant to this paragraph. See, e.g., proposed Rule 4120(a)(10)(A);
24X Rule 11.15(c)(4).
\65\ See proposed Rule 4120(a)(10)(B). To effect this change,
the Exchange proposes to provide in proposed Rule 4120(a)(10)(B)
that orders outstanding on the Nasdaq Book as of 8:00 p.m. ET shall
be cancelled. See id.
\66\ See proposed Rule 4120(a)(10)(C). To effect this change,
the Exchange proposes to provide that the Exchange will begin
accepting orders for the Night Session at 9:00 p.m. ET in accordance
with Rule 4756 and will trade thereafter throughout the Night
Session. As further proposed, trades occurring at or after the
commencement of the Night Session and before midnight will be
assigned a trade date of the following day. See id. As discussed
above, the Exchange is also proposing to provide in Rule 4756(a)(3)
that Orders for the Night Session may be entered into the System (or
previously entered Orders cancelled or modified) from 9 p.m. until
4:00 a.m. ET in accordance with the hours of operation for the Night
Session. See proposed Rule 4756(a)(3).
\67\ See proposed Rule 4120(a)(10)(C).
\68\ See proposed Rule 4120(a)(10)(C) (proposing to provide, in
part, that at the conclusion of the Night Session at 4:00 a.m. ET,
all orders outstanding in the Nasdaq Book as of 4:00 a.m. ET shall
be cancelled).
---------------------------------------------------------------------------

The proposed daily pause in trading will help delineate when a
trade date session/value date rolls from T to T+1. A trade submitted to
the Exchange prior to 8:00 p.m. ET on a given day will have a trade
date of that same day. However, a trade submitted to the Exchange at or
after 9:00 p.m. ET on a given weekday will have a trade date of the
following calendar day.\69\ For example, a trade submitted at 9:30 p.m.
ET on Monday, October 10th will be assigned a trade date of October
11th. Assuming that clearing and settlement continues to occur on a T+1
basis, then in this example, this trade would clear and settle by
Wednesday, October 12th.
---------------------------------------------------------------------------

\69\ See proposed Rule 4120(a)(10)(C).
---------------------------------------------------------------------------

The trading pause will mitigate systemic risk to the markets and
promote resiliency by providing time for both the Exchange and market
participants to conduct maintenance and testing. During the pause, for
example, the Exchange will shift its operations to a second instance of
its System that will run the Night session.
Finally, the trading pause will allow the Exchange to process, or
to begin processing any corporate actions that may be pending for the
next trading day, including stock splits, dividends, name changes, and
distributions. The Exchange notes that certain corporate actions will
likely require halts beyond the trading pause. For example, dividends
must be paid on particular calendar days, which will not, going
forward, always coincide with the commencement of new trading days on
Nasdaq at 9:00 p.m. ET. Accordingly, Nasdaq will likely need to halt
trading in such securities until sometime during the next calendar
date. As with market protections and halts, the processing of corporate
actions has industry-wide implications and Nasdaq intends to coordinate
with other exchanges to establish a harmonized approach. As such,
Nasdaq intends to address its treatment of corporate actions during and
after the Trading Pause in either an amendment to this rule filing or
in a discrete rule filing prior to the launch of 23/5 trading on
Nasdaq.
Related Proposed Rule Changes
As discussed above, the Exchange proposes to trade equity
securities and ETPs on a 23/5 basis. To effect this change with respect
to certain ETPs, the Exchange proposes to amend certain rules under the
Nasdaq 5700 Series as follows. The Exchange proposes to provide that,
in addition to the Regular Market Hours and the Pre-and Post-Market
Hours, as it does today, Nasdaq may designate the following for trading
during the Night Session: Exchange Traded Fund Shares,\70\ Portfolio
Depositary Receipts listed pursuant to Rules 5705(a)(4) and (5),\71\
and Index Fund Shares.\72\ The Exchange believes this proposed change
would remove impediments to and perfect the mechanism of a free and
open market, and in general, protect investors and the public interest
because the Exchange has rules in place to facilitate the trading of
such ETPs during all trading sessions and may designate such ETPs for
trading during all extended hours sessions, of which the proposed Night
Session would constitute part.
---------------------------------------------------------------------------

\70\ See proposed Rule 5704(b)(1)(C). To effect this change, the
Exchange proposes to insert the words ``or Night Session, as such
terms are defined in Rule 4120'' immediately following the
description of the Pre- and Post-Market Hours sessions in Rule
5704(b)(1)(C). The Exchange also proposes to make related conforming
changes to remove obsolete language describing the current trading
sessions and substitute therefor for the proposed terms for each
such trading session. See proposed Rule 5704(b)(1)(C).
\71\ See proposed Rule 5705(a)(7). To effect this change, the
Exchange proposes to insert the words ``or Night Session, as such
terms are defined in Rule 4120'' immediately following the
description of the Pre- and Post-Market Hours sessions in Rule
5705(a)(7) and make related conforming changes to remove obsolete
language describing the current trading sessions and substitute
therefor for the proposed terms for each such trading session. See
proposed Rule 5705(a)(7).
\72\ See proposed Rule 5705(b)(7). To effect this change, the
Exchange proposes to insert the words ``or Night Session, as such
terms are defined in Rule 4120'' immediately following the
description of the Pre- and Post-Market Hours sessions in Rule
5705(b)(7) and make related conforming changes to remove obsolete
language describing the current trading sessions and substitute
therefor for the proposed terms for each such trading session. See
proposed Rule 5705(b)(7).
---------------------------------------------------------------------------

Impact on Exchange Fees
The Exchange will address any impact of the rule proposal on its
schedule of credits and fees, and its incentive programs, in a
subsequent rule filing.
Clarifying, Conforming and Other Non-Substantive Changes
The Exchange proposes to amend current Equity 1, Section 1 to add
three clarifying definitions. First, the Exchange proposes to define
``Equity Data Plans'' to mean the effective national market system
plans that govern the collection, consolidation, processing and
dissemination of equity market data for NMS stocks and oversee 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,

[[Page 1356]]

and (5) any successor thereto to the named Plans.\73\ Second, the
Exchange proposes to define ``Business Day'' to mean any Sunday from
9:00 p.m. ET through Monday, Tuesday, Wednesday, Thursday or Friday
other than any of the following U.S. holidays if they are celebrated on
a Monday, Tuesday, Wednesday, Thursday or Friday: New Year's Day,
Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Juneteenth National Independence Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day Eastern Time, or such other U.S.
holiday(s) as published by the Exchange from time to time.\74\ Finally,
the Exchange proposes to define ``Extended Hours'' to mean that, unless
otherwise specified in Exchange rules, the term means the hours outside
of Regular Market Hours and specifically comprising the hours during
which Pre-Market Hours, Post-Market Hours, and Night Session are in
operation.\75\
---------------------------------------------------------------------------

\73\ See proposed Rule Equity 1, Section 1(a)(16).
\74\ See proposed Rule Equity 1, Section 1(a)(17).
\75\ See proposed Equity 1, Section 1(a)(23).
---------------------------------------------------------------------------

The Exchange also proposes the following conforming, non-
substantive changes.
The Exchange proposes to amend the following rules to
replace references to ``Market Hours,'' ``regular market hours,'' and
similar references used to designate the trading session operating from
9:30 a.m. ET through 4:00 p.m. ET with the proposed term ``Regular
Market Hours,'' and make related conforming changes: Rule Equity 1,
Section 1(a)(9); Rule Equity 2, Section 20; and Rules 4120, 4702; 4703;
4752; 4753; 4754; IM-5250-1, 5704, 5705, 5710, 5711, 5713, 5745, 5760,
5810(b), 5840, and 11890.
The Exchange proposes to amend the following rules to
replace references to terms such as ``Pre-Market Session,'' ``Early
Market Hours,'' and similar terms used to designate the pre-market
trading session operating from 4:00 a.m. ET through 9:30 a.m. ET with
the defined term ``Pre-Market Hours'' and make related conforming
changes: Rule Equity 2, Section 20, and Rules 4120, 4702, 4703, 4753,
5704, 5705, and 11890.
The Exchange proposes to amend the following rules to
replace references to terms such as ``Post-Market Session,'' ``Extended
Market Hours,'' and similar terms used to designate the trading session
operating from 4:00 p.m. ET through 8:00 p.m. ET, with the term ``Post-
Market Hours'' and make related conforming changes: Rule Equity 2,
Section 20, and Rules 4120, 4702, 4703, 4753, 5704, 5705, and 11890.
The Exchange proposes to amend the following rules to
replace references to ``extended hours'' with the term ``Extended
Hours,'' as defined in Rule 1, Equity Section 1(a)(23): Rule Equity 2,
Section 20, and Rule 4703.
The Exchange would also make certain conforming changes as
follows. First, the Exchange proposes to delete the obsolete reference
to ``4:00 a.m. to 8 p.m. Eastern Time on each business day'' in Rule
Equity 2, Section 8, and substitute therefor [sic] the term ``System
Hours,'' \76\ so as to update and align this rule with the proposed
hours of operation for the Exchange. The Exchange proposes to make non-
substantive changes to Rule 4120 as follows. The Exchange proposes to
amend subparagraph (B) of Rule 4120(b)(4) to (1) to conform the current
terms ``Pre-Market Session,'' ``Post-Market Session,'' and ``Market
Hours'' to the proposed terms ``Pre-Market Hours,'' ``Post-Market
Hours,'' and ``Regular Market Hours,'' as proposed Rule Equity 1,
Sections 1(a)(20)-(22), respectively.\77\ The Exchange further proposes
to add in new subparagraphs (F)-(G) of Rule 4120(b)(4) that the terms
``Day Session'' and ``Night Session'' shall have the same meaning as
defined in Rule Equity 1, Sections 1(a)(18) and (19), respectively.
Consistent with how the Exchange operates during the Post-Market Hours,
the Exchange also proposes to provide in Rule 4120(a)(3)(A), that if an
applicable Required Value \78\ continues not to be calculated or widely
disseminated after the close of the Regular Market Hours, Nasdaq may
trade a Derivative Securities Product \79\ during the Night Session
only if the listing market traded the Derivative Securities Product
until the close of its regular trading session without a halt.\80\
---------------------------------------------------------------------------

\76\ See, e.g., proposed Rule Equity 2, Section 8; proposed Rule
Equity 1, Section 1(a)(9) (defining the term ``System Hours''). To
effect this change, the Exchange proposes to delete, from Rule
Equity 2, Section 8, the words ``from 4:00 a.m. to 8:00 p.m.
Eastern. Time on each business day'' and substitute therefor the
words ``during System Hours.'' See proposed Rule Equity 2, Section
8.
\77\ See proposed Rule 4120(b)(4)(B)-(D).
\78\ ``Required Value'' means (i) the value of any index or any
commodity-related value underlying a Derivative Securities Product,
(ii) the indicative optimized portfolio value, intraday indicative
value, or other comparable estimate of the value of a share of a
Derivative Securities Product updated regularly during the trading
day, (iii) a net asset value in the case of a Derivative Securities
Product for which a net asset value is disseminated, and (iv) a
Disclosed Portfolio in the case of a Derivative Securities Product
that is a series of Managed Fund Shares, as defined in Rule 5735, or
Managed Trust Securities, as defined in Rule 5711(j), and a
Composition File in the case of a Derivative Securities Product that
is a series of NextShares, as defined in Rule 5745. See Rule
4120(b)(4)(E).
\79\ See proposed Rule 4120(b)(3)(A). ``Derivative Securities
Product'' means a series of Exchange Traded Fund Shares, Portfolio
Depository Receipts, Index Fund Shares, Managed Fund Shares,
NextShares, Trust Issued Receipts, or Proxy Portfolio Shares (as
defined in Rules 5704, 5705, 5735, 5745, 5720, and 5750
respectively), a series of Commodity-Related Securities (as defined
in Equity 10, Section 8), securities representing interests in unit
investment trusts or investment companies, Index- Linked
Exchangeable Notes, Equity Gold Shares, Trust Certificates,
Commodity-Based Trust Shares, Currency Trust Shares, Commodity Index
Trust Shares, Commodity Futures Trust Shares, Partnership Units,
Trust Units, Managed Trust Securities, or Currency Warrants (as
defined in Rule 5711(a)-(k)), or any other UTP Derivative Security
(as defined in Rule 5740). See Rule 4120(b)(4)(A).
\80\ To effect this change, the Exchange proposes to amend Rule
4120(b)(3)(A) to insert, immediately after ``Post-Market Session,''
the words ``and during the Night Session.'' The Exchange also
proposes a non-substantive to conform the term ``Post Market
Session'' to the proposed term ``Post-Market Hours'' by deleting the
word ``Session'' and substituting therefor the word ``Hours.'' As
described below, the Exchange is proposing non-substantive changes
to conform terms ``Pre-Market Session,'' Post-Market Session, and
``Market Hours'' in each instance such terms are used within Rule
4120 with the proposed terms ``Pre-Market Hours,'' ``Post-Market
Hours,'' and ``Regular Market Hours,'' respectively. The Exchange
believes that establishing uniform names for its trading sessions,
as proposed, is appropriate because consolidating the varying terms
for each such session into one defined and uniform term for each
such session would facilitate the understanding of and compliance
with the Exchange's rules. See, e.g., proposed Rule 4120; proposed
Rule Equity 1, Section 1(a)(20)-(22).
---------------------------------------------------------------------------

Finally, the Exchange proposes a technical, non-
substantive conforming change to renumber subparagraphs (10)-(15) of
Rule 4120(a) as subparagraphs (11)-(16).
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\81\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\82\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
---------------------------------------------------------------------------

\81\ 15 U.S.C. 78f(b).
\82\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

It is consistent with the Act to permit members of the Exchange to
trade securities on an extended basis, for 23 hours per day, 5 days per
week. As explained above, investors increasingly trade securities,
along with digital assets, on a global basis. Investors located outside
of the United States in places like Asia presently cannot trade on
Nasdaq during what constitutes their regular trading hours, as the
Exchange is closed during that period. Even among U.S.-based investors,
demand is growing for exchanges to expand their market hours to
accommodate overnight trading. Accordingly, investors seeking access to
U.S. equities and ETP markets

[[Page 1357]]

during overnight and weekend hours must resort to trading on a handful
of ATSs that offer round-the-clock trading. Nasdaq's proposal will
enable Nasdaq to serve these investors and to compete with ATSs,
foreign securities markets. and other markets for their order flow. It
will also enable the Exchange to compete with new and incumbent
exchanges which the SEC has approved to trade overnight in a similar
manner.
The Exchange's proposal to operate on an extended hours basis is
largely based on Nasdaq's longstanding rules for extended hours
trading, as well as the approved rules of other national securities
exchanges also seeking to operate on a 23/5 basis. As proposed, these
rules are designed to address potential differences in trading compared
to regular trading hours, as well as to enhance transparency and
investor protections. For example, the Exchange is proposing to
supplement the existing required customer disclosures to require the
disclosure of six additional potential risks associated with trading
during extended hours, including the proposed Night Session. Such
disclosures notify investors of potential risks and allow them to
evaluate whether to trade during extended hours. The Exchange would
also implement measures to safeguard against trade executions that are
clearly erroneous while it works to build industry-wide consensus on
proposals for establishing uniform after-hours volatility moderators.
Nasdaq would also address corporate actions, conduct real-time
surveillance, and implement trading halts consistent with its proposed
rules. Finally, trading overnight will be transparent because Nasdaq
will not commence operations of the proposed extended hours until the
Equity Data Plans are prepared to collect, consolidate, process and
disseminate quotation and transaction information at all times during
the Night Session. The proposed rules will also foster competition by
introducing another trading venue during the overnight hours, as at
least two other exchanges have obtained Commission approval for
operating on an extended hours basis.
In addition to increasing investor access to the Exchange, the
proposal also stands to promote capital formation and facilitate
portfolio management.
Finally, the Exchange believes that the proposed conforming and
other non-substantive changes would remove impediments to and perfect
the mechanism of a free and open market by reducing potential investor
and market participant confusion thereby ensuring that investors and
market participants can more easily navigate, understand and comply
with the Exchange's rules.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange's proposal to
expand its trading hours to 23 hours a day, 5 days per week are neither
intended to nor will they adversely impact competition. If anything,
the Exchange expects that the proposed changes will promote competition
by providing for the Nasdaq Stock Market to accommodate the growing
demand to trade equity securities during overnight hours when the
market is presently closed. Unaffiliated exchanges remain free to
compete by offering extended hours trading of similar duration.
The Exchange operates in a highly competitive market in which
market Participants can readily choose between competing venues if they
deem participation in the Exchange's market to no longer be desirable
or if they do not wish to trade during the new Night session. In such
an environment, the Exchange must carefully consider the impact that
any change it proposes may have on market participants, understanding
that it will likely lose participants to the extent a change is viewed
as unfavorable by them. Because competitors are free to modify the
functionality and structure of their markets, including by availing
themselves of the same capabilities that are being developed to trade
securities and ETPs on a 23/5 basis, the Exchange believes that the
degree to which its proposal imposes any burden on competition is
limited. Last, to the extent the proposed change is successful in
attracting additional market participants or additional activity by
existing participants, the Exchange also believes that the proposed
change will promote competition among trading venues by making the
Exchange a more attractive trading venue.

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

No written comments were either solicited or received.

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

Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) by order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

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 SR-NASDAQ-2025-109 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-NASDAQ-2025-109. 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-NASDAQ-2025-109 and should be submitted
on or before February 3, 2026.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\83\
---------------------------------------------------------------------------

\83\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-00416 Filed 1-12-26; 8:45 am]
BILLING CODE 8011-01-P