[Federal Register Volume 91, Number 156 (Friday, August 14, 2026)]
[Notices]
[Pages 52756-52767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-16572]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106061; File No. S7-2026-06]
Order Granting Temporary Conditional Exemptive Relief to 24X
National Exchange LLC From Certain Requirements of Rule 602 of
Regulation NMS, Certain Requirements of Certain Equity Data Plans, and
Section 19(g)(1) of the Securities Exchange Act of 1934, Pursuant to
Section 36 of the Securities Exchange Act of 1934 and Rules 602 and 608
of Regulation NMS, To Permit Certain Overnight Trading, Subject to
Certain Conditions, and Effective As of January 24, 2027 and Until the
Earlier of (1) the date the Extended Hours Amendments Are Implemented
or (2) July 2, 2027
August 7, 2026.
I. Introduction
On December 15, 2025, 24X National Exchange LLC (``24X or
``Exchange'') submitted a request for temporary conditional exemptive
relief \1\ pursuant to section 36 of the Securities Exchange Act of
1934 (``Exchange Act'' or ``Act'') \2\ and pursuant to Rules 602(d) \3\
and 608(e) \4\ of Regulation NMS under the Act, in accordance with
relevant procedures set forth in Exchange Act Rule 0-12.\5\ In the
Application, as discussed further below, the Exchange requested
temporary conditional exemptive relief from: (1) certain requirements
of Rule 602 of Regulation NMS under the Exchange Act; \6\ (2) certain
requirements of 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'') \7\
and the Consolidated Quotation Plan (``CQ Plan'') \8\ with regard to
the reporting of quoting activity during the ``24X Market Session;''
\9\ and (3) the requirement under section 19(g)(l) of the Exchange Act
\10\ to comply with certain requirements set forth in 24X Rules 1.5(c)
and 11.6, to permit the Exchange to offer trading during the 24X Market
Session. On February 25, 2026, the Commission published the Application
for public comment.\11\ The Commission received comment letters on the
Application \12\ and a response from the Exchange.\13\
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\1\ See Letter from David Sassoon, General Counsel, Exchange,
dated Dec. 15, 2025 (``Application''). The Application may be found
on https://www.sec.gov/files/rules/other/2026/34-104894.pdf.
\2\ 15 U.S.C. 78mm.
\3\ 17 CFR 242.602(d).
\4\ 17 CFR 242.608(e).
\5\ 17 CFR 240.0-12.
\6\ 17 CFR 242.602.
\7\ See UTP Plan, available at https://www.utpplan.com/utp_plan.
\8\ See CQ Plan, available at https://www.ctaplan.com/plans.
\9\ See 24X Rule 1.5(c) defining the ``24X Market Session.'' The
24X Market Session would operate between 9:00 p.m. and 4:00 a.m.
Eastern time (``ET'') Sunday, Monday, Tuesday, Wednesday, and
Thursday nights that precede a U.S. Business Day.
\10\ 15. U.S.C. 78s(g)(1). Section 19(g)(1) of the Exchange Act
requires self-regulatory organizations (``SROs'') to comply with,
among other things, their own rules.
\11\ See Securities Exchange Act Release No. 104894 (Feb. 25,
2026), 91 FR 10169 (Mar. 2, 2026) (File No. S7-2026-06).
\12\ Comments received by the Commission are available at
https://www.sec.gov/rules-regulations/public-comments/s7-2026-06.
\13\ See Letter from David Sassoon, General Counsel, Exchange,
dated on Apr. 23, 2026 (``Response Letter''). The Response Letter is
available at https://www.sec.gov/rules-regulations/public-comments/s7-2026-06.
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The relief sought in the Application would allow 24X to operate its
NMS stock trading system during the 24X Market Session (i.e., 9:00 p.m.
to 4:00 a.m. ET, Sunday through Thursday) when the Equity Data Plans
are not collecting, consolidating, processing and disseminating
consolidated SIP data to the public.\14\ In other words, 24X's
Application seeks relief to allow 24X to offer trading during the 24X
Market Session before the Equity Data Plans are ready to accommodate
those overnight hours.\15\ Recently, and after the Application was
published in the Federal Register, the Commission approved the Equity
Data Plans' amendments to extend the operating hours of the exclusive
SIPs to 23 hours per day, 5 days per week,\16\ and the Equity Data
Plans stated that they expect to be ready to collect, consolidate,
process, and disseminate SIP data during the hours that coincide with
the 24X Market Session by December 6, 2026.\17\
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\14\ The three NMS Plans that currently govern the collection,
consolidation, processing, and dissemination of SIP data and oversee
the exclusive securities information processors (``SIPs'') for
equity market data for NMS stocks are (1) the Consolidated Tape
Association Plan (``CTA Plan''), (2) the CQ Plan, and (3) the UTP
Plan (collectively, the Equity Data Plans''). See also 24X Rule
1.5(o), which defines ``Equity Data Plans'' as including the CTA
Plan, CQ Plan, UTP Plan and any successor plan. On Nov. 20, 2024,
the Commission approved the Limited Liability Company Agreement of
the CT Plan LLC (``CT Plan''), which upon implementation, will
replace the Equity Data Plans. See Securities Exchange Act Release
No. 101672 (Nov. 20, 2024), 89 FR 94957 (Nov. 29, 2024). The Equity
Data Plans are administered by the ``Participants'' through an
``Operating Committee,'' which oversee the SIPs, composed of a
representative designated by each Participant. The members of the
Operating Committees of the Equity Data Plans include
representatives from: (1) 24X; (2) Cboe BYX Exchange, Inc.; (3) Cboe
BZX Exchange, Inc.; (4) Cboe EDGA Exchange, Inc.; (5) Cboe EDGX
Exchange, Inc.; (6) Cboe Exchange, Inc.; (7) Financial Industry
Regulatory Authority, Inc.; (8) Investors' Exchange LLC; (9) Long
Term Stock Exchange, Inc.; (10) MEMX LLC; (11) MIAX PEARL, LLC; (12)
Nasdaq ISE, LLC; (13) Nasdaq PHLX LLC; (14) Nasdaq Texas, Inc.; (15)
The Nasdaq Stock Market LLC; (16) New York Stock Exchange LLC; (17)
NYSE American LLC; (18) NYSE Arca, Inc.; (19) NYSE National, Inc.;
(20) NYSE Texas, Inc.; and (21) Texas Stock Exchange LLC.
\15\ As discussed below, the Application was filed with the
Commission before the Equity Data Plans filed the Extended Hours
Amendments. See Extended Hours Amendments, infra note 16. In its
Application, 24X stated that it would comply with a number of
conditions as part of its requested exemptive relief, including
making publicly available for no cost a proprietary real-time data
feed that includes quotation and last sale information, making
certain disclosures, and providing certain quarterly data to the
Commission.
\16\ On June 26, 2026, the Commission approved amendments to the
Equity Data Plans to among other things, extend the exclusive SIPs
hours of operation. See Securities Exchange Act Release Nos. 105780,
91 FR 40058 (July 1, 2026) (order approving amendments to the UTP
Plan); and 105779, 91 FR 40082 (July 1, 2026) (order approving
amendments to the CTA and CQ Plans) (together the ``Extended Hours
Amendments''). In these orders, the Commission stated that the
Participants must comply and enforce compliance with the Plans as
amended starting on December 6, 2026. Further, on May 27, 2026, the
Commission approved rules for the National Securities Clearing
Corporation (``NSCC'') to support extended trading hours for the
U.S. equity markets. See Securities Exchange Act Release No. 105565
(May 27, 2026) 91 FR 32491 (June 1, 2026) (``NSCC Approval Order'').
\17\ See Extended Hours Amendments, supra note 16. See also
Letter from Jeff Kimsey, Chair of the Operating Committees of the
Equity Data Plans Letter, dated Mar. 23, 2026 (``Equity Data Plans
Letter'') (stating in a comment letter on the Application that the
Operating Committees ``expect to launch extended hours for the
Processors on December 6, 2026, subject to [Commission] approval of
the amendments to the Equity Data Plans to implement 23x5 operation
of the Processors.'').
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The relief sought by 24X is novel because no national securities
exchange currently operates its trading system when the exclusive SIPs
are not collecting, consolidating, processing and disseminating
consolidated SIP data. As specified by its own rules, 24X may not
operate its trading system during the 24X Market Session when the
Equity Data Plans are not able to collect, consolidate, process and
disseminate consolidated SIP data, which rule has been in place since
the
[[Page 52757]]
Commission granted 24X's application to register as a national
securities exchange.\18\
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\18\ See 24X Rule 1.5(c). See also Securities Exchange Act
Release No. 101777 (Nov. 27, 2024), 89 FR 97092 (Dec. 6, 2024) (In
the Matter of the Application of 24X National Exchange LLC for
Registration as a National Securities Exchange; Findings, Opinion,
and Order of the Commission) (``24X Approval Order''). Other
national securities exchanges that have rules approved to offer
trading during the overnight hours contain the same requirement. See
NYSE Acra Rule 7.34-E (Preamble), Nasdaq Equity 1. Sec. 1(a)(19),
Cboe EDGX Rule 1.5(jj).
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For the reasons stated below, the Commission is not granting 24X's
requested relief at this time. Rather, starting on January 24, 2027,
the Commission is granting this temporary conditional exemptive relief
that would allow 24X to offer trading during the 24X Market Session but
only in the event that the Equity Data Plans are unable to meet the
December 6, 2026 implementation date for the Extended Hours Amendments
to enable the Equity Data Plans to collect, consolidate, process and
disseminate consolidated SIP data during the operation of the 24X
Market Session.\19\ Specifically, pursuant to its authority under
section 36(a)(1) of the Exchange Act,\20\ Rule 602 \21\ and Rule 608
\22\ the Commission is granting this temporary conditional exemptive
relief to 24X from certain requirements of Rule 602 of Regulation NMS,
certain requirements of certain Equity Data Plans, and section 19(g)(1)
of the Act, as described further below, to allow 24X to commence
operations during the 24X Market Session, subject to certain conditions
that aim to minimize the effect of those Equity Data Plans not being in
place set forth herein, effective as of January 24, 2027 and until the
earlier of (1) the date the Extended Hours Amendments are implemented
or (2) July 2, 2027.
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\19\ To the extent the Equity Data Plans do not implement the
Extended Hours Amendments on December 6, 2026 but implement them
prior to January 24, 2027, this temporary conditional exemptive
relief would not become effective.
\20\ 15 U.S.C. 78mm(a)(1).
\21\ 17 CFR 242.602(d).
\22\ 17 CFR 242.608(e).
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II. Background
In the 24X Approval Order, the Commission approved rules that will
allow the Exchange to ultimately operate 23 hours a day, 5 days per
week.\23\ Specifically, 24X rules provide for four trading sessions:
(1) a Pre-Market Session (4:00 a.m.-9:30 a.m. ET); (2) a Core Market
Session (9:30 a.m.-4:00 p.m. ET); (3) a Post-Market Session (4:00 p.m.-
8:00 p.m. ET); \24\ and (4) a 24X Market Session (9:00 p.m.-4:00 a.m.
ET every Sunday, Monday, Tuesday, Wednesday, and Thursday night that
precedes a U.S. Business Day).\25\ On October 14, 2025, 24X commenced
operations, and offers trading during three of these four trading
sessions--the Pre-Market Session, the Core Market Session and the Post-
Market Session.\26\ As of the date of this order, 24X has not commenced
operation during the 24X Market Session.
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\23\ See 24X Approval Order, supra note 18.
\24\ See 24X Rules 1.5(z), (1), and (y), respectively. On Sept.
24, 2025, 24X amended its hours for the Post-Market Session so that
it concludes at 8:00 p.m. ET and the 24X Market Session so that it
begins at 9:00 p.m. See Securities Exchange Act Release No. 104086
(Sept. 26, 2025), 90 FR 46978 (Sept. 30, 2025).
\25\ See supra note 9.
\26\ See ``24X National Exchange Opens for Trading as First SEC-
Approved 23/5 Stock Exchange'' Press Release (Oct. 15, 2025),
available at https://24exchange.com/24x-national-exchange-opens-for-trading-as-first-sec-approved-23-5-stock-exchange/.
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Pursuant to 24X rules, the Exchange needs to satisfy three
conditions prior to commencing trading during the 24X Market Session.
First, 24X Rule 1.5(c) states that, the Exchange shall not commence
operation of the 24X Market 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 24X Market Session that is equivalent to the mechanism established
for Exchange Trading Hours other than the 24X Market Session,\27\ 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 24X Market Session.\28\
Second, 24X Rule 1.5(c) provides that prior to commencing its operation
of the 24X Market Session, the Exchange will file a proposed rule
change pursuant to section 19(b) of the Exchange Act and the rules
thereunder confirming that the Exchange is able to comply with its
obligations under the Exchange Act and the rules thereunder during the
24X Market Session and that such Equity Data Plans are prepared to
collect, consolidate, process and disseminate quotation and transaction
information at all times during the 24X Market Session (``24X Market
Session Proposed Rule Change''). Finally, 24X Rule 1.5(c) states that
the 24X Market Session Proposed Rule Change must be filed with the
Commission within 25 months of the Commission's approval of the
Exchange's application for registration as a national securities
exchange (i.e., December 27, 2026), and that if it is not filed within
those 25 months, the Exchange will promptly file a proposed rule change
to remove the rules that apply to the 24X Market Session.\29\ In the
24X Approval Order, the Commission stated that requiring the 24X Market
Session to operate concurrently with the operation of the Equity Data
Plans would enhance transparency during the 24X Market Session and
promote the goals of the national market system.\30\
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\27\ See 24X Rule 1.5(r).
\28\ See 24X Rule 1.5(c).
\29\ See Securities Exchange Act Release No. 105497 (May 15,
2026), 91 FR 29241 (May 19, 2026) (extending the date from May 27,
2026 to December 27, 2026). As originally approved, 24X Rule 1.5(c)
stated that the 24X Market Session Proposed Rule Change must be
filed with the Commission within 18 months of the Commission's
approval of the Exchange's application for registration as a
national securities exchange. See 24X Approval Order, supra note 18.
\30\ See 24X Approval Order, supra note 18.
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According to the Exchange, the Equity Data Plans' progress towards
operating during the times that coincide with the 24X Market Session
has encountered various delays.\31\ The Exchange stated that the Equity
Data Plans formed a 24-Hour Committee in June 2024, and timelines and
cost estimates were delivered in October 2025, nearly a year later than
expected.\32\ The Exchange stated that it was given an expected date
for the Equity Data Plans to begin operations during the times that
coincide with the 24X Market Session of November/December 2026, which
is beyond the originally anticipated 18-month period set forth in 24X
Rule 1.5(c) and discussed in the 24X Approval Order.\33\ The Exchange
stated that the timeline for the implementation of necessary technology
may be further delayed by the need for regulatory approval of
amendments to the Equity Data Plans.\34\ 24X stated that ``[i]n light
of substantial, ongoing delays by various Equity Data Plans related to
facilitating overnight trading'' that it requests that the Commission
provide temporary conditional exemptive relief as described in the
Application to allow 24X to offer trading during the 24X Market
Session.\35\
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\31\ See Application at 2, supra note 1.
\32\ See Application at 3, supra note 1.
\33\ See Application at 3, supra note 1. See also Securities
Exchange Act Release No. 105497 (May 15, 2026), 91 FR 29241 (May 19,
2026).
\34\ See Application at 3, supra note 1; As discussed above, the
Commission approved the Extended Hours Amendments. See supra note
16.
\35\ See Application, supra note 1.
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After the Application was submitted, the Equity Data Plans filed
amendments, which were approved by the Commission on June 26, 2026, to
extend their hours of operation to coincide with the hours of the 24X
Market Session.\36\
[[Page 52758]]
In the Extended Hours Amendments, the Equity Data Plans stated that
they expected the implementation of the Extended Hours Amendments to
occur on December 6, 2026. In the orders approving the Extended Hours
Amendments, the Commission stated that the Participants to the Equity
Data Plans must comply and enforce compliance with the Extended Hours
Amendments starting on December 6, 2026. Further, if the Equity Data
Plans are unable to meet the December 6, 2026 implementation date, they
are required to file an amendment pursuant to Rule 608 to reflect a new
implementation date. After the Extended Hours Amendments were issued,
the Equity Data Plans issued a press release announcing the testing
schedule for implementing the Extended Hours Amendments.\37\
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\36\ See Extended Hours Amendments, supra note 16.
\37\ See https://www.prnewswire.com/news-releases/sips-receive-sec-approval-for-extended-trading-hours-initiative-302820006.html.
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III. Discussion of Temporary Conditional Exemptive Relief
Section 36 of the Exchange Act authorizes the Commission by rule,
regulation or order, to exempt, conditionally or unconditionally, any
person, security, or transaction (or classes thereof) from any
provisions of the Exchange Act, or by rule or regulation thereunder, to
the extent that such exemption is necessary or appropriate in the
public interest and is consistent with the protection of investors.\38\
Rule 602(d) of Regulation NMS authorizes the Commission to exempt from
the provisions of Rule 602, either unconditionally or on specified
terms and conditions, any responsible broker or dealer, electronic
communications network, national securities exchange, or national
securities association if the Commission determines that such exemption
is consistent with the public interest, the protection of investors and
the removal of impediments to and perfection of the mechanism of a
national market system.\39\ Rule 608(e) of Regulation NMS authorizes
the Commission to exempt from the provisions of Rule 608, either
unconditionally or on specified terms and conditions, any self-
regulatory organization, member thereof, or specified security, if the
Commission determines that such exemption is consistent with the public
interest, the protection of investors, the maintenance of fair and
orderly markets and the removal of impediments to and perfection of the
mechanism of a national market system.\40\
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\38\ 15 U.S.C. 78mm(a)(1).
\39\ See 17 CFR 242.602(d).
\40\ See 17 CFR 242.608(e).
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The Commission has considered 24X's Application, the comments
received, and the Exchange's response and finds, for the reasons
discussed below, that it is appropriate in the public interest and
consistent with the protection of investors to provide temporary
conditional exemptive relief to 24X pursuant to section 36(a)(1) of the
Exchange Act, and consistent with the public interest, the protection
of investors, the maintenance of fair and orderly markets and the
removal of impediments to and perfection of the mechanism of a national
market system to provide temporary conditional exemptive relief to 24X
pursuant to Rules 602(d) and 608(e) of Regulation NMS, that would only
take effect to permit trading on 24X during the 24X Market Session if
the Equity Data Plans are unable to collect, consolidate, process, and
disseminate SIP data during the hours that coincide with the 24X Market
Session by December 6, 2026.
Efforts by the self-regulatory organizations (``SROs'') and other
market participants to make changes to the infrastructure of the
national market system to accommodate overnight trading are
progressing. As referenced above, the Equity Data Plans are progressing
towards implementing the Extended Hours Amendments on December 6,
2026.\41\ Nevertheless, the Commission is issuing this relief, which,
as described below, is in the public interest and consistent with the
protection of investors, as a contingency in the event that the Equity
Data Plans are unable to implement the Extended Hours Amendments on
December 6, 2026 and to ensure investors will have access to overnight
trading on a national securities exchange without further delay.
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\41\ See supra note 37.
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The core innovation in 24X's Form 1 application was the initiation
of overnight trading on a national securities exchange as a competitive
alternative to the overnight trading that already occurs on various
alternative trading systems (``ATSs''). As described above, the
Commission approved 24X's proposal to commence overnight trading with
24X Rule 1.5(c) which requires the Equity Data Plans to be able to
collect, consolidate, process and disseminate SIP data during the
operation of the 24X Market Session. As originally approved, 24X Rule
1.5(c) also required the 24X Market Session to begin within 18 months
of the Commission's approval, in order to provide certainty as to
implementation of 24X's rules and also to provide the Equity Data Plans
with adequate time to establish procedural and technological readiness
to operate concurrently with the 24X Market Session.\42\ The Commission
stated in the 24X Approval Order that the 24X Rule 1.5(c) will enhance
transparency during the 24X Market Session and promote the goals of the
national market system.\43\
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\42\ See supra note 29.
\43\ See 24X Approval Order, supra note 18
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To date, the Equity Data Plans have not established readiness to
operate during the 24X Market Session and during that interim period
(i.e., 20 months) (1) 24X has not commenced trading during the 24X
Market Session, (2) three other national securities exchange have been
approved to commence overnight trading subject to the readiness of the
Equity Data Plans,\44\ and (3) overnight trading, while still a small
percentage of the overall trading volume of NMS stocks, has steadily
and significantly increased.\45\
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\44\ See Securities Exchange Act Release Nos. 102400 (Feb. 11,
2025), 90 FR 9794 (Feb. 18, 2025) (SR-NYSEARCA-2024-89); 105199
(Apr. 10, 2026), 91 FR 20222 (Apr. 15, 2026) (SR-Nasdaq-2025-109);
105587 (May 29, 2026), 91 FR 33238 (June 3, 2026) (SR-CboeEDGX-2026-
019).
\45\ See MEMX Exchange Highlights, After-Hours Trading Trends;
New Non-Penny Options Market Share Record, May 13, 2026, available
at https://memx.com/insights/after-hours-trading-trends-new-non-penny-options-market-share-record (noting that growth in overnight
trading is up 305% in April 2026 year-over-year, yet it remains the
lowest volume segment accounting for less than 1% of total daily
volume).
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Trading during the overnight hours has occurred on some ATSs for
several years.\46\ Facilitating the expansion of overnight trading to
exchanges would benefit investors by providing greater flexibility,
choice and access to the markets outside regular trading hours. The
Commission is aware that efforts are underway to address and complete
the necessary market data requirements, i.e., the Equity Data Plans,
before overnight trading can begin. Granting this temporary conditional
exemptive relief will provide assurance to the market that overnight
trading will not be delayed due to outstanding Equity Data Plan
implementation such that efforts to continue this innovation would be
sustained.
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\46\ See Application at 3, supra note 1.
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The Commission also recognizes the critical role that consolidated
market data plays in ensuring transparency and fairness within the
national market system. This temporary conditional exemptive relief
reflects an appropriate balance of the need for timely access to
overnight trading and support for innovation, with the essential
[[Page 52759]]
requirement for robust consolidated market data infrastructure. The
temporary conditional exemptive relief is subject to conditions that
are designed to ensure that market participants have access to certain
quotation and transaction data at no cost for the limited time of this
exemption. Therefore, the Commission finds it appropriate in the public
interest and for the protection of investors to grant this narrow,
time-limited exemption, which will only become effective if the Equity
Data Plans are not fully implemented by December 6, 2026.
National securities exchanges are SROs and among other things, are
required to comply with the Exchange Act, the rules thereunder, and its
own rules,\47\ and national securities exchanges are also required to
enforce compliance with such provisions by its members.\48\ ATSs, which
are not SROs, are not bound by the regulatory requirements and
obligations of SROs, and investors may wish to trade on national
securities exchanges that are SROs subject to these requirements during
overnight hours.
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\47\ 15 U.S.C. 78(s)(g)(1).
\48\ See also 15 U.S.C. 78f(b)(1).
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Accordingly, the Commission, in order to benefit investors through
the enhanced competition that such trading will bring in the national
market system, is granting this temporary conditional exemptive relief
as a contingency should the Equity Data Plans be unable to implement
the Extended Hours Amendments on December 6, 2026. If, on December 6,
2026, the Equity Data Plans are unable to begin collecting,
consolidating, processing and disseminating SIP data during the time
that the 24X Market Session would operate, it is appropriate in the
public interest and consistent with the protection of investors to
allow 24X to commence operation of the 24X Market Session on January
24, 2027, subject to certain conditions that aim to minimize the effect
of the Equity Data Plans not being in place, on a temporary basis.
Notwithstanding the potential for this order to allow 24X to
operate its 24X Market Session without the concurrent operation of the
Equity Data Plans, the principles set forth in section 11A of the Act
and the importance of the operation, transparency and accessibility of
SIP data remain at the foundation and core of the national market
system.\49\ It is in the public interest to have a contingency in place
should the Equity Data Plans be unable to meet the December 6, 2026
implementation date for the Extended Hours Amendments, in order to
provide investors an option to trade during overnight hours on a
national securities exchange without further delay. It would also allow
24X, and any other similarly situated registrant that requests and is
granted a comparable exemption, to continue innovative efforts in
preparing for overnight trading without those preparations being
disrupted in the event the Equity Data Plans do not meet the December
6, 2026 implementation date.
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\49\ See 15 U.S.C. 78k-1(a)(1)(C)(iii) (stating that it is in
the public interest and appropriate for the protection of investors
and the maintenance of fair and orderly markets to assure the
availability to brokers, dealers, and investors of information with
respect to quotations for and transactions in securities).
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The timing of the effectiveness of this relief is designed so as
not to disrupt preparations for implementation of the Extended Hours
Amendments and to support industry efforts to prepare for the expansion
of trading on national securities exchanges. However, the Commission is
issuing this order at this time to provide market participants with
notice of the contingency that if the Equity Data Plans are unable to
implement the Extended Hours Amendments on December 6, 2026, 24X will
be permitted, pursuant to this Order, to begin operating the 24X Market
Session on January 24, 2027.
Further, the Commission is granting the exemption with an effective
date of January 24, 2027 because the Commission understands that market
participants typically observe a system freeze in December and January
for end-of-year maintenance and therefore, market participants could be
short on technological and operations personnel during that period.
Accordingly, it is in the public interest and consistent with the
protection of investors for the Commission to set an effective date
that is beyond the expected timeframe of the industry's widespread,
annual system freeze in order to avoid the potential for unintended
consequences that could occur if the exemptive relief started during
the timeframe where the availability of industry resources related to
technology and personnel would likely be reduced.\50\
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\50\ See, e.g., Letter from Leslie M. Norwood, Managing Director
and Associate General Counsel, Securities Industry and Financial
Markets Association (``SIFMA''), dated Dec. 19, 2008 at 2-3
(``First, it is critical to point out that virtually all broker
dealers have a year-end ``system freeze'' that extends for a two to
four week period in December and/or January. This ``system freeze''
is a time when no operational systems changes can be made, as annual
systems maintenance on the firm's computer systems is being done.
Second, many technology and operations personnel take scheduled time
off during December and January, not only due to the holidays but
specifically to coincide with the scheduled ``system freeze'' at
their particular firm. Some of these technology and operations
personnel are required by banking regulations to take off two
consecutive weeks of leave. This leaves the firms shorthanded during
this season . . .''), available at https://www.sec.gov/comments/sr-msrb-2008-07/msrb200807-2.pdf.
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Finally, this temporary conditional exemptive relief will expire at
the earlier of (1) the date the Extended Hours Amendments are
implemented or (2) on July 2, 2027. As noted elsewhere herein, the
Commission believes that the Equity Data Plans will be ready to
accommodate overnight hours by December 6, 2026, or a later date soon
thereafter. As soon as the Extended Hours Amendments are implemented by
the Equity Data Plans, the temporary conditional exemptive relief will
expire. However, the Commission also selected a firm end date of July
2, 2027, which is the end-of-trading for the week concluding the second
quarter of 2027, to minimize disruptions. If the Equity Data Plans miss
the December deadline and the relief becomes effective the Commission
still expects that the Equity Data Plans will have made significant
progress towards implementation of the Extended Hours Amendments, and
thus the time to complete the implementation and the relief to allow
24X and investors to commence overnight trading on an exchange should
not be needed any longer than July 2, 2027.
A. Issues Raised and Discussion
The Commission received comments on the Application, some of which
supported the Exchange's Application,\51\ some expressed no
position,\52\ and others opposed the Application.\53\
---------------------------------------------------------------------------
\51\ See Letters from James J. Angel, Associate Professor,
Georgetown University dated Mar. 10, 2026 (``Angel Letter'');
Rakuten Securities, Inc, dated Mar. 16, 2026 (``Rakuten Letter'');
Global Business Team, Eugene Investment & Securities Co, Ltd,
received on Mar. 27, 2026 (``EIS Letter''); Ocean Fintech Ventures,
dated Mar. 30, 2026 (``OFV Letter''); Shinhan Securities Co. Ltd.
Dated Mar. 31, 2026 (``Shinhan Letter''); and Mario Josipovic, VP,
Regulatory Affairs and General Counsel, Select Vantage Inc,
(``Select Vantage Letter'').
\52\ See Letter from David Taylor, CEO Exegy Inc dated Mar. 31,
2026 (``Exegy Letter'') and Equity Data Plans Letter.
\53\ See Letters from Enrico Cacciatore, Co-Founder CalcGuard
Technologies, dated Mar. 3, 2026 (``Cacciatore Letter''); Joseph
Saluzzi, Partner, Themis Trading dated Mar. 5, 2026 (``Themis
Letter''); Luke Peeler dated Mar. 7, 2026 (``Peeler Letter''); C.
Zachary Meyers, C. Zachary Meyers, PLLC dated Mar. 25, 2026
(``Meyers Letter''); Haoxiang Zhu, Associate Professor of Finance,
MIT and NBER, dated Mar. 30, 2026 (``Zhu Letter''); Jason Wallach,
CEO, Bruce Markets LLC dated Mar. 31, 2026 (``Bruce Letter'');
Matthew Iwamaye, VP, Cboe Global Markets, Inc. Apr. 1, 2026 (``Cboe
Letter''); Angela S. Dunn, Principal Associate General Counsel,
Nasdaq Inc. dated Apr. 1, 2026 (``Nasdaq Letter''); Benjamin L.
Schiffrin, Director of Securities Policy, Better Markets, Inc. dated
Apr. 1, 2026 (``Better Markets Letter''); Katie Kolchin, et al.,
SIFMA, dated Apr. 23, 2026 (``SIFMA Letter''); and John Ramsey,
Chief Market Policy Officer, IEX, dated May 12, 2026 (``IEX
Letter'').
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[[Page 52760]]
Commenters who supported the Application stated that overnight
trading currently occurs on ATSs and that allowing overnight trading on
a national securities exchange would provide stronger surveillance and
investor protection.\54\ Other commenters stated that there is investor
demand for overnight trading.\55\ Some commenters stated that granting
the Application would support continued accessibility and global
competitiveness of the U.S. market.\56\ Other commenters stated that
granting the Application would allow regulators and market participants
to gain practical experience with overnight trading.\57\ One commenter
stated that the after-hours trading market is not fully developed and,
``[a]ccordingly, it is entirely reasonable to allow the 24X Market
Session time to reach critical mass of liquidity . . . in advance of
the Equity Data Plans'' and that 24X should not ``be held back by the
veto of competitors.'' \58\
---------------------------------------------------------------------------
\54\ See e.g., Angel Letter at 2; EIS Letter at 2; and OFV
Letter.
\55\ See e.g., Shinhan Letter; OFV Letter; EIS Letter at 1; and
Rakuten Letter (``we have observed increasing interest among market
participants in the ability to access U.S. equity markets outside
traditional trading hours.'').
\56\ See e.g., Shinhan Letter and Rakuten Letter.
\57\ See e.g., Rakuten Letter and OFV Letter.
\58\ See Select Vantage Letter at 2. See also e.g., Angel
Letter; EIS Letter at 1 (stating that ``the current timeline for
Equity Data Plan updates should not act as a barrier for innovative
exchanges that are ready to provide necessary liquidity and
transparency to global investors''); Cacciatore Letter at 4-5 (while
not supporting the Application stated ``[t]he record suggests the
delay was substantially caused by structural conflicts of interest
among plan participants, not by genuine technical barriers.'');
Themis Letter at 1; and Meyers Letter at 2.
---------------------------------------------------------------------------
Commenters that opposed granting the Application did so because, as
discussed further below, (i) they opposed exchange trading in the
absence of SIP data, (ii) the imminent timing of the SIP expansion,
(iii) the possible effect on other exchanges, (iv) concerns with using
24X proprietary market data, (v) the possible effect on other market
participants, (vi) other Exchange Act concerns, and (vii) other
considerations.\59\
---------------------------------------------------------------------------
\59\ See supra note 53.
---------------------------------------------------------------------------
i. Absence of SIP Data
Some commenters stated that allowing an exchange to operate without
the exclusive SIPs operating would fracture consolidated price
information, which is ``a core NMS objective established by Congress
under Section 11A of the Exchange Act.'' \60\ One commenter stated that
the consolidated SIP data promotes competition among trading centers
and enables investors to compare prices, which also encourages
exchanges to compete on price.\61\ One commenter stated that allowing
exchanges to operate without the Equity Data Plans would force broker-
dealers to reconstruct what the exclusive SIPs now provide centrally
and increase their costs.\62\ Another commenter stated that without
consolidated data, investors lack visibility into true market-wide
conditions and it would introduce informational fragmentation, burden
competition by fragmenting market data, obscure cross-market
transparency, and increase uncertainty around best execution.\63\ One
commenter stated that an independent, reliable source of market data is
especially important to retail investors given the likelihood of the
reduced liquidity and higher price volatility expected during overnight
hours.\64\ Another commenter stated that each exchange would
disseminate its own quotes and trade data resulting in degraded
execution quality.\65\
---------------------------------------------------------------------------
\60\ See Cacciatore Letter at 2. See also Nasdaq Letter at 2-3;
SIFMA Letter at 4; and Meyers Letter at 1-2 (stating that access to
real-time quote and transaction data on equal terms is an animating
principle of Section 11A of the Exchange Act).
\61\ See Nasdaq Letter at 7.
\62\ See Bruce Markets Letter at 3. Several commenters, however,
stated that market data vendors were developing consolidated data
products for overnight trading. See e.g., Cacciatore Letter at 7-8
and Exegy Letter at 1.
\63\ See Nasdaq Letter at 4; see also SIFMA Letter at 4.
\64\ See IEX Letter at 2.
\65\ See Zhu Letter.
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One commenter stated that the Application conflicted with the 24X
Approval Order and Rule 601 of Regulation NMS as it relates to
transaction reporting. This commenter stated that the standard for
reporting to the Equity Data Plans is as soon as practicable, not on a
delayed basis.\66\
---------------------------------------------------------------------------
\66\ See Nasdaq Letter at 10.
---------------------------------------------------------------------------
One commenter stated that the Application would raise questions
about how broker-dealers would comply with Rule 603(c) of Regulation
NMS (the ``Vendor Display Rule'') \67\ if SIP data was not
available.\68\
---------------------------------------------------------------------------
\67\ See 17 CFR 242.603(c).
\68\ See Bruce Letter at 3-4.
---------------------------------------------------------------------------
In the Exchange's response, it acknowledged the importance of
consolidated market data, and that it had initially agreed to not
commence trading during the 24X Market Session until the Equity Data
Plans established a mechanism to collect, process, and disseminate
quotation and transaction information during the 24X Market
Session.\69\ The Exchange stated that since the Application was filed,
there are three market data vendors that offer consolidated data feeds
for the overnight markets.\70\ The Exchange stated that the
availability of consolidated data for overnight trading from market
data vendors would address the potential for greater fragmentation if
multiple exchanges were to commence trading overnight.\71\ Lastly, the
Exchange responded that the three market data vendors that offer
overnight services is consistent with introducing competition into
consolidated market data.\72\
---------------------------------------------------------------------------
\69\ See Response Letter at 3, supra note 13.
\70\ See Response Letter at 3-4, supra note 13.
\71\ See Response Letter at 4-5, supra note 13.
\72\ See Response Letter at 5, supra note 13. The Exchange
stated its commitment to ``providing market data to the Equity Data
Plans when they are ready to ingest and disseminate data . . . .''
See Response Letter at 5.
---------------------------------------------------------------------------
Consolidated SIP data is a hallmark of the U.S. national market
system and allows all market participants to assess the best prices
available on competing trading venues. While market data vendors
currently offer limited consolidated data for the overnight markets,
such data is not a substitute for SIP data, which contains other
important information such as regulatory data. Given the role that
consolidated SIP data plays in perfecting the mechanism of the national
market system, the Commission is not granting 24X's request as
contemplated in the Application to allow 24X to offer overnight trading
before the Equity Data Plans have the opportunity to implement the
Extended Hours Amendments by December 6, 2026. The implementation of
the Extended Hours Amendments by December 6, 2026 will allow all
exchanges that have rules approved for an overnight trading session to
offer overnight trading in an orderly, consistent and transparent
manner.
However, if the Equity Data Plans are unable to implement the
Extended Hours Amendments by December 6. 2026, it is in the public
interest and consistent with the protection of investors to allow
trading during the 24X Market Session to commence for a limited period
of time and subject to specified conditions. Offering overnight trading
on a national securities exchange will benefit investors by providing
them with more opportunities to transact during this time frame to
better meet their investing needs.
Further, as a condition of the temporary exemptive relief, 24X will
provide a proprietary data feed, free of charge, that includes its
quotation information and transaction information that it is required
to provide to the Equity Data Plans during times outside
[[Page 52761]]
of the 24X Market Session.\73\ While that data would not be
consolidated through the exclusive SIPs, third party market data
providers have represented that they would be able to offer their own
consolidated data feed containing 24X overnight quotation and
transaction information.\74\ Accordingly, investors would have access
to multiple sources of 24X market data during overnight trading. The
Commission acknowledges that 24X proprietary information, even if
consolidated with other trading venue information, would not be a
substitute for SIP data. As stated above, consolidated SIP data is a
hallmark of the U.S. national market system and should be provided
during the extended hours that 24X seeks to operate. Accordingly, the
relief granted in this order would only become effective in the event
that the Equity Data Plans do not implement the Extended Hours
Amendments by December 6, 2026 and would only be effective for a
limited period of time. The benefits for investors trading on an
exchange, and 24X's ability to compete, during the overnight time
periods should not be delayed beyond January 2027. Finally, if this
temporary conditional exemptive relief takes effect, the Equity Data
Plans would still be required pursuant to the Extended Hours
Amendments, to complete the work to implement the Extended Hours
Amendments such that the period of time during which the exclusive SIPs
do not operate overnight but 24X offers overnight trading should be
limited.
---------------------------------------------------------------------------
\73\ In its Application, 24X offered to provide its proprietary
data feed free of charge. See Application, supra note 1.
\74\ One commenter stated that it is currently operating a
consolidated data feed that includes an overnight best bid and offer
service that consolidates quotes and trades from three ATSs
operating overnight. See Exegy Letter at 1. The commenter stated
that its service is ready and can accommodate multiple exchanges, if
necessary. See Exegy Letter at 2.
---------------------------------------------------------------------------
ii. Implementation Timing of the Equity Data Plans
Two commenters stated that the Commission should compel the Equity
Data Plans to deliver the infrastructure necessary to support the 24X
Market Session on an accelerated basis as opposed to exempting an
exchange from its transparency obligations.\75\ One commenter stated
that the 24X Application was premature and speculative because of the
``stated readiness to support 23/5 trading by December 2026.'' \76\
Another commenter stated that the ``SIPs subsequently confirmed . . .
their intention to be operational by December 6, 2026,'' which is
approximately six months later than originally anticipated by the 24X
rules.\77\ This commenter also stated that granting the Application
would disrupt other industry initiatives, such as those related to
corporate actions, that are aligned with the Equity Data Plans'
timeline.\78\ The Operating Committees of the Equity Data Plans stated
in its comment letter that the expected December 6, 2026 implementation
date accounts for sufficient development work and industry testing,
including work necessary to complete competing initiatives.\79\
---------------------------------------------------------------------------
\75\ See Cacciatore Letter at 2 (stating that ``[t]he proper
remedy for delayed SIP infrastructure is not to exempt an exchange
from its transparency obligations but to compel the plan
participants to deliver the infrastructure on an accelerated
timeline'') and Meyers Letter at 2 (stating that ``[t]he Commission
should use its authority under Section 11A of the Exchange Act and
Rule 608 of Regulation NMS to direct the Equity Data Plans to
implement overnight infrastructure on an accelerated timeline'').
\76\ See Nasdaq Letter at 9. See also Better Markets Letter at
2.
\77\ See SIFMA Letter at 3.
\78\ See SIFMA Letter at 3.
\79\ See Equity Data Plans Letter.
---------------------------------------------------------------------------
In the Extended Hours Amendments, the Commission approved the
December 6, 2026 implementation date. In addition, as discussed above,
the Equity Data Plans have announced (1) their expectations to begin
operations by that date, and (2) testing dates for systems and the
industry.\80\
---------------------------------------------------------------------------
\80\ See supra note 37.
---------------------------------------------------------------------------
Several commenters stated that granting the exemption would remove
the incentive for the Equity Data Plans to hit their December 2026
timeline.\81\ The Commission agrees that allowing 24X to offer
overnight trading before the Extended Hours Amendments' December 6,
2026 implementation date could potentially lessen the incentive for the
Equity Data Plans to meet their deadline. Accordingly, the Commission
is not granting that relief. Rather, the Commission is granting relief
that would become effective only if the Equity Data Plans miss the
implementation date, as it will allow all exchanges to offer overnight
trading, if permitted by their rules, at the same time as 24X thus
supporting fair competition between venues. Having the Equity Data
Plans ready to operate during the times that coincide with the 24X
Market Session is preferable, however to the extent that the Equity
Data Plans do not meet the implementation date, the public interest and
investors are better served by providing access to overnight trading on
a national securities exchange without further delay rather than
limiting investors to trading on an ATS.
---------------------------------------------------------------------------
\81\ See e.g., SIFMA Letter at 5 (stating that ``[t]here is also
a concern that this would remove the incentive for the SIPs to hit
their December 2026 timeline'') and Meyers Letter at 3 (stating that
``[t]he Commission should also recognize that extending this
exemption broadly would eliminate the remaining incentive for
incumbent exchanges to support Equity Data Plan amendments'').
---------------------------------------------------------------------------
iii. Exchange Obligations
Several commenters stated that the Application would allow 24X to
operate like an ATS and that approval as a national securities exchange
entails more responsibilities.\82\ One commenter stated that allowing a
national securities exchange to operate without the exclusive SIPs
during the same hours when ATSs are providing similar services would
create an unjustifiable asymmetry--the Exchange would gain competitive
benefit of operating without exclusive SIP constraints while retaining
the reputational and regulatory advantages of exchange
registration.\83\ Other commenters stated that 24X chose to launch as
an exchange, rather than an ATS, and should be subject to all aspects
of Regulation NMS (i.e., the requirements applicable to the use of
exclusive SIPs), and should wait for the exclusive SIPs to be
operational overnight.\84\ Some commenters stated that the Application
is inconsistent with the regulatory framework for exchanges--one that
requires the concurrent operation of the Equity Data Plans.\85\
---------------------------------------------------------------------------
\82\ See e.g., Themis Letter at 2; Cacciatore Letter at 2-3;
Bruce Letter at 5-6; Nasdaq Letter at 2-3; and SIFMA Letter at 2
(stating that the Application ``would blur the line between
exchanges and ATSs'').
\83\ See Cacciatore Letter at 4. See also Bruce Letter at 5-6.
\84\ See e.g., Bruce Letter at 2-3; Peeler Letter; and Nasdaq
Letter at 9.
\85\ See e.g., Nasdaq Letter and Cacciatore Letter at 5.
---------------------------------------------------------------------------
The Commission generally agrees with these comments and has
addressed them by not providing the exemption prior to the Equity Data
Plans' expected implementation but instead is providing it only after
such expected implementation date and subject to specified conditions
for a limited period of time.
iv. Ripple Effect for Exemptive Relief From Other Exchanges
Some commenters stated that granting an exemption to 24X would lead
other exchanges to seek the same exemption, thereby creating multiple
proprietary overnight quotation feeds.\86\ One
[[Page 52762]]
commenter stated that allowing multiple exchanges to operate overnight
without consolidated quotation data would be a structural change to the
Regulation NMS data framework by ``administrative exemption rather than
rulemaking.'' \87\ Another commenter stated that the Commission should
not extend similar exemptive relief to other exchanges as it would
institutionalize a two-tier data environment.\88\ The commenter stated
that the Commission should recognize that extending the exemption
broadly would eliminate the remaining incentive for incumbent exchanges
to support the Equity Data Plans amendments.\89\ One commenter stated
that the Commission should delay the effectiveness of the relief until
other exchanges receive the same exemptive relief.\90\
---------------------------------------------------------------------------
\86\ See Cacciatore Letter at 6; Themis Letter at 2; Cboe Letter
at 2; Nasdaq Letter at 2; SIFMA Letter at 5; IEX Letter at 2; and
Zhu Lettter. See also Select Vantage Letter at 2 (stating that
allowing other exchanges to operate ``is entirely fair and should
encourage more rapid development of overnight trading.'').
\87\ See Cacciatore Letter at 6.
\88\ See Meyers Letter at 3.
\89\ See Meyers Letter at 3.
\90\ See Cboe Letter at 3.
---------------------------------------------------------------------------
As of the date of this order, no other national securities exchange
has filed to request similar exemptive relief. However, if another
exchange does request similar relief, the Commission would provide the
same thorough consideration given to the 24X request. More importantly,
the relief does not allow 24X (or any other exchange) to offer
overnight trading before the date that the Equity Data Plans are
required to implement the Extended Hours Amendments. This relief only
serves as a backstop in the event that the Equity Data Plans do not
meet their implementation deadline.
v. 24X Proprietary Data Feed
Commenters stated that investors may not be able to access or
process the 24X proprietary data feed.\91\ One commenter stated that
sophisticated trading firms would be able to process proprietary data
feeds.\92\ Another commenter stated that even if retail investors could
access the proprietary data feed, the feed will not contain the same
information as the consolidated tape and that consolidated quotation
information is what allows market participants to evaluate prices,
consider order routing, perform execution quality assessments and
assess best execution.\93\ Another commenter stated that the
proprietary data feeds should be distributed through established market
data vendors, not via API access.\94\ The commenter also stated that
proprietary data access for the overnight trading session should have a
non-discrimination obligation.\95\ One commenter stated that
proprietary data feeds do not include an NBBO or a comprehensive view
of liquidity or pricing across markets and that retail investors would
be disadvantaged.\96\ This commenter also stated that proprietary feeds
increase informational asymmetries and transaction costs and create
uncertainty for best execution.\97\
---------------------------------------------------------------------------
\91\ See Meyers Letter at 3. See also Themis Letter at 2 and
SIFMA Letter at 2.
\92\ See Themis Letter at 1.
\93\ See Meyers Letter at 3.
\94\ See Meyers Letter at 6.
\95\ See Meyers Letter at 6.
\96\ See Nasdaq Letter at 5-6. See also SIFMA Letter at 4.
\97\ See e.g., Nasdaq Letter at 6 and SIFMA Letter at 4.
---------------------------------------------------------------------------
However, one commenter that supported the Application stated that
since 24X would provide its quote and last sale data at no cost,
``those investors sophisticated enough to seek liquidity at this time
on the 24X Market Session will have the investor protection they need
and ought to be permitted to trade such market.'' \98\
---------------------------------------------------------------------------
\98\ See Select Vantage Letter at 2.
---------------------------------------------------------------------------
One commenter stated that it would be able to integrate the 24X
proprietary data feed to its overnight consolidated market data product
and that its product could be scaled to accommodate other trading
venues that operate during the overnight hours.\99\ This commenter also
stated that it could make its consolidated data products available at
colocation data centers and via public cloud services.\100\
---------------------------------------------------------------------------
\99\ See Exegy Letter at 2.
\100\ See Exegy Letter at 2.
---------------------------------------------------------------------------
Offering the 24X proprietary data feeds would provide some
transparency during the 24X Market Session until the Equity Data Plans
have implemented the Extended Hours Amendment. As discussed above, in
the event that the relief takes effect in January 2027, the fact that
24X would be required to provide its proprietary data feed at no cost
will help to offset expenses associated with accessing the proprietary
feed and incentivize direct users and third party market data vendors
to acquire and integrate the feeds into their consolidated data
offerings. In turn, the investors that access those data products,
either directly or through their broker-dealers, will also benefit from
the availability quotes and last sale trade information for overnight
trading session. This level of transparency for a limited period of
time is appropriate, in the public interest and consistent with the
protection of investors because it would provide market participants,
including investors, with some information to evaluate prices and
liquidity on the Exchange, and allow market participants to make
trading and routing decisions, until such time as the Extended Hours
Amendments are implemented.
vi. Impact on Other Market Participants
One commenter stated that if the Application is granted, other
market participants would seek follow-on regulatory relief to trade on
24X during the 24X Market Session.\101\ Specifically, the commenter
stated that: (1) broker-dealers who route orders would need
interpretative guidance or exemptive relief with respect to their best
execution obligations; (2) market makers would face parallel
uncertainty about their quoting obligations under Rule 602 of
Regulation NMS; (3) clearing firms would need to satisfy NSCC clearance
arrangements; \102\ and (4) institutional compliance officers would
need written guidance on how internal trading policies and client
disclosure obligations apply when consolidated data is not
available.\103\
---------------------------------------------------------------------------
\101\ See Meyers Letter at 4.
\102\ See supra note 12 (concerning approval of an NSCC filing
to accommodate overnight trading).
\103\ See Meyers Letter at 4-5.
---------------------------------------------------------------------------
The questions raised by the commenter are not necessarily limited
to overnight trading on an exchange. While the 24X Market Session is a
new trading session for an exchange, market participants are currently
able to trade over-the-counter during the times covered by the 24X
Market Session.
Another commenter stated that granting 24X's requested exemption
would advantage the most sophisticated market participants, as other
market participants have been preparing for a December 2026 launch of
overnight trading session.\104\ One commenter stated that granting the
exemption could leave market participants underprepared, resulting in
compromised best execution and risk management.\105\
---------------------------------------------------------------------------
\104\ See Meyers Letter at 8. The commenter also asked the
Commission to compel the Equity Data Plans to act expeditiously. See
Meyers Letter at 9.
\105\ See Zhu Letter.
---------------------------------------------------------------------------
The Commission agrees, which is why the temporary conditional
exemptive relief would not take effect until January 24, 2027.
Accordingly, market participants, based on the implementation deadline
set by the Equity Data Plans, are anticipating and preparing for
overnight trading on national securities exchanges to commence on
December 6, 2026. The temporary conditional exemptive relief that may
become effective pursuant to this Order is designed to provide the
Equity Data Plans with time to meet the December 6, 2026 deadline, and
to
[[Page 52763]]
provide a contingency if the deadline is not met.
vii. Other Exchange Act Provisions
One commenter stated that the Commission should consider other
Exchange Act provisions.\106\ Specifically, the commenter stated that
the Commission should consider (1) section 11A(a)(2) of the Exchange
Act \107\ to ensure the practicability of brokers executing investors'
orders in the best market, and (2) section 15(c)(3) of the Act \108\
and Rule 15c3-1 \109\ thereunder because existing net capital
calculations may not adequately capture for broker-dealers that choose
to participate.
---------------------------------------------------------------------------
\106\ See Meyers Letter at 5 (stating that ``[b]eyond Section
11A(a)(1)(C) identified in the Notice, the Commission should
consider the following provisions not otherwise addressed in the
Application'').
\107\ See 15 U.S.C. 78k-1(a)(2) (``The Commission is directed,
therefore, having due regard for the public interest, the protection
of investors, the maintenance of fair and orderly markets, to use
its authority under this chapter to facilities the establishment of
a national market system for securities (which may include
subsystems for particular types of securities with unique trading
characteristics) in accordance with the findings and to carry out
the objectives set forth in paragraph (1) of this subsection.'').
\108\ 15 U.S.C. 78o(c)(3).
\109\ See 17 CFR 240.15c3-1.
---------------------------------------------------------------------------
With respect to section 11A(a)(2) of the Exchange Act, which
relates to the establishment of a national market system, the temporary
conditional exemptive relief will provide the Equity Data Plans with
time to implement the Extended Hours Amendments by December 6, 2026,
and the temporary conditional exemptive relief that would allow 24X to
operate the 24X Market Session prior to the readiness of the Equity
Data Plans would only take effect in January 24, 2027 if the Equity
Data Plans failed to meet the implementation deadline for the Extended
Hours Amendments. As stated above, consolidated SIP data is a hallmark
of the national market system. However, if the Equity Data Plans are
unable to meet the implementation deadline, it is appropriate in the
public interest and consistent with the protection of investors to
allow trading during the 24X Market Session to commence without
consolidated SIP data--but with the 24X proprietary data feed
available--for a limited period of time so as to facilitate efforts to
modernize the national market system to keep pace with and thus better
compete with other continuously traded markets operating globally.
As discussed, ATSs currently offer overnight trading and investors
are trading in those sessions. Because of growing investor interest to
trade overnight, the Commission finds that permitting 24X to operate
its 24X Market Session on conditional and temporary basis, in this
limited instance, balances the interest of investors and 24X with the
importance of the exclusive SIP functions and is appropriate in the
public interest, and consistent with the protection of investors
Specifically, doing so would benefit investors and serve the public
interest by allowing investors to trade during overnight hours on an
exchange, by supporting innovation in the U.S. equity market and by
facilitating capital formation by providing investors across the world
with access to U.S. markets during local time zone working hours while
the work to establish the readiness of the Equity Data Plans is
completed.
Further, as discussed above, the temporary conditional exemptive
relief that is being granted would require 24X to provide a proprietary
data feed during the 24X Market Session. Market data vendors would be
able to incorporate the 24X feed into their consolidated data products.
This would provide a level of transparency in the overnight market that
would provide investors with all of the 24X quotation and transaction
information that 24X would otherwise be required to report to the
Equity Data Plans. Therefore, market participants that engage in
overnight trading on 24X would have access to information about
quotations and transactions on 24X. As discussed above, nothing herein
should diminish the importance of consolidated SIP data to the national
market system, which is why the relief set forth in this order is
designed to be conditional, temporary and based on the specific facts
and circumstances before the Commission. With respect to section
15(c)(3) of the Exchange Act \110\ and Rule 15c3-1,\111\ this order is
not modifying the net capital framework.
---------------------------------------------------------------------------
\110\ 15 U.S.C. 78o(c)(3).
\111\ See 17 CFR 240.15c3-1.
---------------------------------------------------------------------------
One commenter stated that granting the Application would unfairly
discriminate against ATSs by presenting a structural competitive
disadvantage for ATSs compared to 24X and stated that ``notwithstanding
that Bruce Markets displays quotations on its ATS, broker-dealers may
feel compelled to send orders to exchanges over displayed ATS venues
absent SEC interpretive guidance clarifying the application of
Regulation NMS overnight.'' \112\ The commenter stated that ATS quotes
can only compete on ``more equal terms'' with exchange-displayed
quotations when ``they can be disseminated though the established SIP
framework (i.e., via FINRA's Alternative Display).'' \113\
---------------------------------------------------------------------------
\112\ See Bruce Letter at 6. The commenter responded to 24X's
argument that its relief request was warranted to allow 24X to
compete with exchange groups that acquire ATSs that operate
overnight. See Bruce Markets Letter at 2. The commenter observed
``that path would appear to be available to 24X as well.'' Id.
\113\ See Bruce Letter at 5.
---------------------------------------------------------------------------
The Commission's temporary conditional exemptive relief is a
backstop to the December 6, 2026 deadline to accommodate the scenario
that the Equity Data Plans do not implement the Extended Hours
Amendments by the December 6, 2026 deadline. Specifically, the
Commission is granting exemptive relief for a temporary time period,
subject to conditions, so that market participants would have the
confidence to continue the implementation of overnight trading and 24X
may offer overnight trading without additional undue delay. 24X would
provide its proprietary data feed to subscribers, including market data
vendors, who could combine 24X's data with that from the ATSs that
offer overnight trading.\114\
---------------------------------------------------------------------------
\114\ One commenter stated that it consolidates quotations and
trades from three ATSs, including one of the ATS commenters. See
Exegy Letter at 2. This suggests that ATSs are able to display
quotation and transaction information overnight.
---------------------------------------------------------------------------
One commenter stated that granting the Application would fragment
the market by permitting exchange trading without the consolidated
infrastructure that broker-dealers rely upon--in particular the Limit
Up-Limit Down Plan and treatment of material corporate action.\115\ The
Exchange responded that the Limit Up-Limit Down Plan, as well as Rule
611 of Regulation NMS, currently only apply during regular trading
hours.\116\ With respect to corporate actions, the Exchange responded
that if the primary listing market halts trading in a security before
the 24X Market Session, the Exchange would halt trading until the
primary listing market resumes trading.\117\ The Exchange further
stated that if trading is not halted on the primary listing market and
material corporate news is released during the 24X Market Session, the
disclosures provided to investors will help to ensure that market
participants are informed about the potential risks associated with
trading during the 24X Market Session.\118\
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\115\ See Bruce Markets Letter at 4-5.
\116\ See Response Letter at 7-8.
\117\ See Response Letter at 8.
\118\ See Response Letter at 8.
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As noted earlier, the potential exemptive relief granted herein
would be temporary and conditional. 24X rules
[[Page 52764]]
provide for price bands that serve a similar purpose to the Limit Up-
Limit Down Plan bands by preventing execution on 24X at prices outside
the bands.\119\ With respect to corporate actions and the role the
exclusive SIPs play in disseminating that information to all venues at
the same time, the Commission agrees that the exclusive SIPs play a
valuable role in that process. The commenter explained that currently
it may halt the overnight trading of securities that are subject to
material corporate actions.\120\ To the extent there are any stocks
with corporate actions during that time, 24X rules would provide for
halting the trading of a security that is subject to a corporate action
(e.g., stock split).\121\ Accordingly, 24X would handle corporate
actions in a manner similar to how the corporate actions are handled on
the commenter's ATS during overnight hours. While this individual
trading center process for monitoring corporate actions is different
from how monitoring corporate actions would be handled once the Equity
Data Plans are operational overnight, it would nevertheless be in the
public interest and consistent with the protection of investors because
NMS stocks subject to a corporate action will be halted, thereby
avoiding the possibility of aberrant executions that could result from
corporate actions (e.g., reverse stock splits) that are not timely
processed.
---------------------------------------------------------------------------
\119\ See 24X Rule 11.14.
\120\ See Bruce Markets Letter at 5.
\121\ See Response Letter at 8.
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viii. Additional Conditions
One commenter stated if the Commission grants any form of exemptive
relief that would allow 24X to launch its overnight session before the
Equity Data Plans, the Commission should impose the following
additional conditions: \122\ (1) the relief should not be open ended
and should have a hard calendar sunset date; (2) the Commission should
provide quarterly public reporting of all requests for regulatory
guidance or exemptive relief from other market participants; (3) the
24X proprietary data feed should be distributed through market data
vendors; (4) access to the 24X proprietary data feed should be subject
to a non-discrimination obligation; and (5) NSCC clearance rules must
be publicly available prior to the commencement of overnight trading.
---------------------------------------------------------------------------
\122\ See Meyers Letter at 6.
---------------------------------------------------------------------------
To address the commenter's concerns, the Commission added an end
date to the relief that may become effective which is the earlier of
(1) the date the Extended Hours Amendments are implemented or (2) July
2, 2027. The Commission is not providing quarterly reporting of similar
requests for guidance or relief but if a similar request for relief is
filed by another exchange, the Commission would consider it to the same
extent it has considered 24X's request. On the commenter's third and
fourth points, 24X would provide its proprietary quotation and
transaction data at no cost if it operates pursuant to the relief. As
an exchange, 24X already is prohibited from unfairly discriminating in
offering its market data and market data vendors can and do subscribe
to exchange data and disseminate it through their own data offerings.
As discussed above, one commenter stated that it would be able to
integrate the 24X feed into its market data products.\123\ Finally, the
NSCC rules have been approved.\124\
---------------------------------------------------------------------------
\123\ See Application at 11, supra note 1.
\124\ See NSCC Approval Order, supra note 20.
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ix. Other Comments
One commenter stated that granting the exemption would result in a
permanent degradation of the existing regulatory framework by allowing
exchanges to operate without SIP data.\125\
---------------------------------------------------------------------------
\125\ See Meyers Letter at 6-7.
---------------------------------------------------------------------------
The Commission disagrees that this temporary conditional exemption
would ultimately result in permanent changes. The Commission is issuing
this relief as a contingency in the event that the Equity Data Plans
are unable to implement the Extended Hours Amendments on December 6,
2026 and to ensure investors will have access to overnight trading on a
national securities exchange without further delay.\126\ As discussed,
there are multiple conditions to the exemptive relief and the relief is
designed to be short in duration. The duration of the relief is short
because, ultimately, the Commission expects the Equity Data Plans to
meet the December deadline. However, if the deadline is missed, the
Commission still expects that the Equity Data Plans will have made
significant progress towards the implementation of the Extended Hours
Amendments, and thus the time to complete the implementation and the
relief to allow 24X and investors to commence overnight trading on an
exchange will not be needed any longer than July 2, 2027 (i.e., the end
of the trading week that concludes the second quarter of 2027). As soon
as the Equity Data Plans are able to collect, consolidate, process, and
disseminate SIP data during the 24X Market Session, the relief will
expire. Further, in the event that the Equity Data Plans are unable to
implement overnight operations by July 2, 2027, this order will expire.
---------------------------------------------------------------------------
\126\ See also supra note 37 and accompanying text (describing
how the Equity Data Plans are progressing towards implementing the
Extended Hours Amendments by December 6, 2026).
---------------------------------------------------------------------------
One commenter stated that overnight trading could impact stock
volatility, thereby impacting option prices.\127\ The commenter stated
that market participants can only adequately prepare and manage the
associated risk through a firm, industry-wide implementation date
announced with sufficient lead time, and agrees that December 2026
appears to be a reasonable choice.\128\ Since the relief would only be
effective at a specified date--January 24, 2027--and only if the Equity
Data Plans do not meet the implementation deadline for the Extended
Hours Amendments, market participants are hereby on notice that
overnight trading on a national securities exchange could begin on a
date certain and as such market participants may be able to prepare and
manage any associated risks.
---------------------------------------------------------------------------
\127\ See Zhu Letter.
\128\ See Zhu Letter.
---------------------------------------------------------------------------
One commenter stated that granting the Application would circumvent
the conditions imposed by the Commission when the Commission approved
24X's exchange registration.\129\ The commenter stated that the Equity
Data Plans' operation during the overnight session was an essential
condition.\130\
---------------------------------------------------------------------------
\129\ See Better Markets Letter at 1.
\130\ See Better Markets Letter at 5.
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The Exchange responded that in light of the unexpected delays by
the Equity Data Plans, the growing interest in overnight trading since
the approval of 24X's Form 1 a year and half ago, and the availability
of alternative consolidated data in the overnight market, the existing
24X rules should not preclude the Commission from taking an
alternative, temporary regulatory approach to facilitate overnight
trading by approving the Application.\131\ Further, the Exchange stated
that the requested relief is narrowly crafted to be temporary and would
only be in place until the Equity Data Plans implemented the requisite
changes to facilitate overnight trading.\132\
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\131\ See Response Letter at 6.
\132\ See Response Letter at 7.
---------------------------------------------------------------------------
The Commission acknowledges that when it granted 24X's application
to register as an exchange, the 24X rules required the Exchange to wait
before operating its overnight session until the Equity Data Plans were
ready to operate
[[Page 52765]]
concurrently with the 24X Market Session. As discussed above, the
Equity Data Plans have been making progress in making the necessary
changes to the Equity Data Plans and exclusive SIPs, with a December 6,
2026 implementation date. Therefore, the Commission is providing
temporary conditional exemptive relief that would only become effective
in the event that the Equity Data Plans do not meet the December 2026
deadline.
The Commission finds that if this temporary conditional exemptive
relief becomes effective it will be appropriate in the public interest
and consistent with the protection of investors as it will facilitate
capital formation by allowing investors both domestically and globally
to participate in U.S. markets by trading on a national securities
exchange during local time zone business hours, by providing investor
choice to trade on their schedule, and by modernizing the securities
markets to keep pace with and compete with other continuously traded
markets operating globally.
B. Exemption From Rule 602 of Regulation NMS
The Commission has determined that exercising its exemptive
authority under Rule 602(d) of Regulation NMS to exempt the Exchange
from complying with the provisions of Rule 602(a) to make available to
Vendors its best bid, best offer and aggregate quotation sizes, is
consistent with the public interest, the protection of investors and
the removal of impediments to and perfection of the mechanism of a
national market system. Rule 602(a) of Regulation NMS requires each
national securities exchange establish and maintain procedures and
mechanisms for collecting bids, offers, quotation sizes, and aggregate
quotation sizes from responsible brokers or dealers who are members of
the exchange, processing such bids, offers, and sizes, and making such
bids, offers, and sizes available to Vendors.\133\ Each national
securities exchange shall at all times such exchange is open for
trading, collect, process, and make available to Vendors the best bid,
the best offer, and aggregate quotation sizes for each subject security
listed or admitted to unlisted trading privileges which is communicated
on any national securities exchange by any responsible broker or
dealer.\134\
---------------------------------------------------------------------------
\133\ See 17 CFR 242.602(a)(1).
\134\ See 17 CFR 242.602(a)(1)(i). The information shall not
include any bid or offer executed immediately after communication
and any bid or offer communicated by a responsible broker or dealer
other than an exchange market maker which is cancelled or withdrawn
if not executed immediately after communication. See 17 CFR
242.602(a)(1)(i)(A). The information shall also not include any bid
or offer communicated during a period when trading in that security
has been suspended or halted, or prior to the commencement of
trading in that security on any trading day, on that exchange. See
17 CFR 242.602(a)(1)(i)(B).
---------------------------------------------------------------------------
The Exchange has requested an exemption from Rule 602(a)(1) of
Regulation NMS related to quotations during the 24X Market Session,
because the Exchange cannot make its bids, offers, and sizes available
to Vendors unless the exclusive SIPs are available. The UTP Plan and
the CQ Plan, which are Vendors for purposes of Rule 602(a)(1),\135\ do
not currently provide a mechanism for collecting, consolidating, and
disseminating quotations during the hours of operation of the 24X
Market Session.\136\ For the reasons discussed below, the Commission
finds that it is consistent with the public interest, the protection of
investors and the removal of impediments to and perfection of the
mechanism of a national market system, to grant 24X a temporary
conditional exemption from Rule 602(a)(1) of Regulation NMS if the
Equity Data Plans do not implement the Extended Hours Amendments on
December 6, 2026 that would permit 24X to operate the 24X Market
Session, effective as of January 24, 2027, until the earlier of (1) the
date the Extended Hours Amendments are implemented or (2) July 2, 2027.
---------------------------------------------------------------------------
\135\ See 17 CFR 242.600(b)(111).
\136\ See Application at 4-5.
---------------------------------------------------------------------------
The temporary conditional exemptive relief is consistent with the
public interest, the protection of investors, and the removal of
impediments to and perfection of the mechanism of a national market
system because it will provide investors with the option to trade on a
national securities exchange during overnight hours, subject to certain
conditions including that 24X quotation information be made available
via its proprietary data feed. Further, the temporary conditional
exemptive relief will incentivize changes to the exclusive SIPs,
promote competition among exchanges and other trading centers, and
strengthen the national market system by facilitating capital formation
through enabling more investors domestically and globally to
participate in U.S. markets during local time zone business hours, by
providing investor choice to trade on their schedule in their
respective time zone, and by modernizing the securities markets to keep
pace with and thus better compete with other continuously traded
markets operating globally. In these ways, the temporary conditional
exemptive relief will remove impediments to and perfect of the
mechanism of a national market system as the securities markets
transition to overnight trading and will protect investors and support
the public interest by facilitating capital formation and allowing
investors to transact in securities during overnight hours, including
outside regular business hours for their time zone.
This limited relief is in the public interest and consistent with
the protection of investors because it will provide the Equity Data
Plans with the opportunity to meet the December 6, 2026 deadline for
the Extended Hours Amendments. However, if deadline is not met, the
temporary conditional exemptive relief would allow 24X to launch its
24X Market Session in January 2027 subject to conditions for a limited
period of time. In the event that the implementation does not occur as
scheduled, allowing a national securities exchange to begin offering
trading during overnight hours for a limited period (until the earlier
of the Extended Hours Amendments being implemented, or July 2, 2027),
subject to the conditions contained in this relief, without further
delay would introduce more competition for order flow.
C. Exemption From Rule 608 of Regulation NMS
The Commission has determined that exercising its exemptive
authority under Rule 608(e) of Regulation NMS to exempt the Exchange
from compliance with the CQ Plan and UTP Plan with respect to quoting
activity during the 24X Market Session, is consistent with the public
interest, the protection of investors, the maintenance of fair and
orderly markets, and the removal of impediments to, and perfection of
the mechanism, of a national market system. Rule 608(c) of Regulation
NMS requires each self-regulatory organization to comply with the terms
of any effective national market system plan of which it is a sponsor
or a participant.\137\
---------------------------------------------------------------------------
\137\ See 17 CFR 242.608(c). Each SRO also shall, absent
reasonable justification or excuse, enforce compliance with any such
plan by its members and persons associated with its members. See id.
---------------------------------------------------------------------------
The Exchange has requested exemption from section VIII(A) of the
UTP Plan and section VI of the CQ Plan with respect to quoting activity
on 24X during the 24X Market Session.\138\ Section VIII(A) of the UTP
Plan states that each participant shall, during the time it is open for
trading, be responsible promptly to collect and transmit to the
processor accurate quotation information in eligible securities through
any means prescribed
[[Page 52766]]
therein.\139\ Section VI of the CQ Plan states that each participant
agrees to collect, and furnish to the processor in a format acceptable
to the processor and the operating committee, all quotation information
required to be made available by such participant to vendors by
paragraph (b)(l) of the rule. Each bid and offer with respect to an
eligible security furnished to the processor by any participant
pursuant to this CQ Plan shall be accompanied by (i) the quotation size
or aggregate quotation size associated therewith as required by
paragraph (b)(l) of the Rule and (ii) the time of the bid or
offer.\140\
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\138\ See Application at 10.
\139\ See section VIII(A) of the UTP Plan, available at https://www.utpplan.com/utp_plan.
\140\ See section VI of the CQ Plan, available at https://www.ctaplan.com/plans#.
---------------------------------------------------------------------------
For the reasons discussed below, the Commission finds that it is
consistent with the public interest, the protection of investors, the
maintenance of fair and orderly markets, and the removal of impediments
to, and perfection of the mechanism, of a national market system to
grant temporary conditional exemptive relief to the Exchange from
complying with Rule 608(c) of Regulation NMS with the terms of section
VIII(A) of the UTP Plan and section VI of the CQ, operative as of
January 24, 2027, until the earlier of (1) the date the Extended Hours
Amendments are implemented or (2) July 2, 2027.
The temporary conditional exemptive relief is consistent with the
public interest, the protection of investors, the maintenance of fair
and orderly markets, and the removal of impediments to, and perfection
of the mechanism, of a national market system because it will provide
investors with the option to trade on a national securities exchange
during overnight hours, subject to certain conditions including that
24X quotation and transaction information be made available via its
proprietary data feed. Further, the temporary conditional exemptive
relief will incentivize the exclusive SIP changes to accommodate
overnight trading, promote competition among exchanges and other
trading centers, and strengthen the national market system by
facilitating capital formation through enabling more investors
domestically and globally to participate in U.S. markets during local
time zone business hours, by providing investor choice to trade on
their schedule in their respective time zone, and by modernizing the
securities markets to keep pace with, and thus better compete with,
other continuously traded markets operating globally. In these ways,
the relief will remove impediments to and perfect of the mechanism of a
national market system as the securities markets transition to
overnight trading and will protect investors and support the public
interest by facilitating capital formation and allowing investors to
transact in securities during overnight hours including outside regular
business hours for their time zone.
D. Exemption From Section 19(g) of the Exchange Act
The Commission finds that exercising its exemptive authority under
section 36(a)(1) of the Exchange Act to exempt the Exchange from the
requirements of section 19(g) of the Exchange Act for the Exchange to
comply with its own rules, is appropriate in the public interest, and
is consistent with the protection of investors. Under section 19(g) of
the Exchange Act, every SRO shall comply with its own rules.\141\
Pursuant to section 36(a)(1) of the Exchange Act,\142\ the Commission,
by rule, regulation, or order, may conditionally or unconditionally
exempt any persons from any provision of the Exchange Act to the extent
that such exemption is necessary or appropriate in the public interest,
and is consistent with the protection of investors.
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\141\ 15 U.S.C. 78s(g)(1).
\142\ 15 U.S.C. 78mm(a)(1).
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The Exchange has requested exemption from complying with 24X Rule
1.5(c) \143\ which states that the Exchange shall not commence
operation of the 24X Market Session unless the Equity Data Plans have
(1) established a mechanism to collect, consolidate, process, and
disseminate quotation and transaction information at all times during
the 24X Market Session that is equivalent to the mechanism established
for Exchange Trading Hours other than the 24X Market Session and (2)
provided the Exchange with notification that they are prepared to
collect, consolidate, process, and disseminate quotation and
transaction information to accommodate the 24X Market Session. Further,
24X Rule 1.5(c) states that prior to commencing operation during the
24X Market Session, the Exchange will file a proposed rule change
pursuant to section 19(b) of the Exchange Act to amend Exchange rules
confirming that the Exchange is able to comply with its obligations
under the Act and the rule thereunder during the 24X Market Session and
that the Equity Data Plans are prepared to collect, consolidated,
process, and disseminate quotation and transaction information at all
times during the 24X Market Session. In addition, 24X requested
exemption from complying with 24X Rule 11.16, which states that the
Exchange will not commence operation of the 24X Market Session until
the proposed rule change required under 24X Rule 1.5(c) has been
approved or otherwise become effective.
---------------------------------------------------------------------------
\143\ In the Application, the Exchange incorrectly requested
exemption from complying with Exchange Rule 11.5(c). See Application
at 10, supra note 1. The Commission notes that the Exchange rulebook
does not contain a Rule 11.5(c), and that the correct rule reference
is Exchange Rule 1.5(c).
---------------------------------------------------------------------------
The Commission finds that it is appropriate in the public interest,
and consistent with the protection of investors, to grant the Exchange
a temporary conditional exemption from complying with 24X Rules 1.5(c)
and 11.16 which require, in pertinent part, that the Exchange shall not
commence operation of the 24X Market Session unless the Equity Data
Plans have established and provided notice to the Exchange that the
Equity Data Plans are prepared to collect, consolidate, process, and
disseminate quotation and transaction information to accommodate the
24X Market Session and the section 19(b) rule filing requirement to
amend Exchange rules confirming that the Exchange is able to comply
with its obligations under the Exchange Act during the 24X Market
Session and that the Equity Data Plans are prepared to collect,
consolidate, process, and disseminate quotation and transaction
information during the 24X Market Session. Pursuant to this Order, if
the Equity Data Plans do not implement the Extended Hours Amendments by
December 6, 2026, 24X will be exempted from complying with section
19(g)(1) as applicable to 24X Rules 1.5(c) and 11.16 such that
operation of the 24X Market Session could commence as early as January
24, 2027, subject to certain conditions that aim to minimize the effect
of the Equity Data Plans not being in place, until the earlier of (1)
the date the Extended Hours Amendments are implemented or (2) July 2,
2027.
Overnight trading on a national securities exchange is novel.
Accordingly, consistent with the protection of investors and in the
public interest, the Commission is requiring, as a condition of this
temporary conditional exemptive relief, that 24X file a proposed rule
change to confirm its ability to comply with its obligations under the
Exchange Act during the 24X Market Session, and the conditions set
forth in this Order, prior to the commencement of the 24X Market
Session pursuant to the Order. This condition is similar to the
requirement in 24X Rule 1.5(c), which requires 24X to confirm that it
is able to comply with
[[Page 52767]]
its obligations under the Exchange Act and the rules thereunder during
the 24X Market Session and that the Equity Data Plans are prepared to
collect, consolidate, process and disseminate quotation and transaction
information at all times during the 24X Market Session. The proposed
rule change will provide notice and confirmation of 24X's ability to
comply with: (1) its obligations under the Exchange Act and the rules
thereunder during the 24X Market Session that would be applicable if
this temporary conditional exemptive relief becomes effective, and (2)
the conditions set forth in this exemptive order.
Altogether, this temporary conditional exemptive relief would
incentivize SIP modernization, promote competition among exchanges and
other trading centers, and strengthen the national market system by
facilitating capital formation through enabling more investors
domestically and globally to participate in U.S. markets during local
time zone business hours, by providing investor choice to trade on
their schedule in their respective time zone, and by modernizing the
securities markets to keep pace with and thus better compete with other
continuously traded markets operating globally. In these ways, the
relief would remove impediments to and perfect of the mechanism of a
national market system as the securities markets transition to
overnight trading and would protect investors and support the public
interest by facilitating capital formation and allowing investors to
transact in securities during overnight hours including outside regular
business hours for their time zone.
IV. Conclusion
Accordingly, it is hereby ordered that, pursuant to section
36(a)(1) of the Exchange Act,\144\ and Rules 602 \145\ and 608 \146\ of
Regulation NMS, that the Commission grants the temporary conditional
exemptive relief, set forth in this order, from certain requirements of
Rule 602(a)(1) of Regulation NMS, from Rule 608(c) of Regulation NMS to
comply with certain requirements of section VIII(A) of the UTP Plan and
section VI of the CQ Plan, and section 19(g)(1) of the Exchange Act, if
the Equity Data Plans are not ready to operate during the times that
coincide with the 24X Market Session by December 6, 2026, effective as
of January 24, 2027 and until the earlier of (1) the date the Extended
Hours Amendments are implemented, or (2) July 2, 2027, subject to the
following conditions:
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\144\ 15 U.S.C. 78mm(a)(1).
\145\ See 17 CFR 242.602.
\146\ See 17 CFR 242.608.
---------------------------------------------------------------------------
1. 24X will make publicly available a proprietary real-time data
feed that includes (a) quotation information with the data elements
required by the UTP and CQ Plans for the 24X Market Session, and (b)
last sale information with the data elements required by the UTP and
CTA Plans, at no cost;
2. 24X will make clear on its website that consolidated market data
is not currently available with regard to quoting activity in the 24X
Market Session, and that quotation information during the 24X Market
Session is only available via 24X's proprietary data feeds;
3. 24X will satisfy the requirements of Rules 601 and 602 of
Regulation NMS as well as the requirements of the Equity Data Plans
with regard to the quoting and transaction activity during its Pre-
Market Session, Core Market Session and Post-Market Session;
4. 24X will satisfy the requirements of Rule 601 of Regulation NMS
as well as the requirements of the UTP and CTA Plans with regard to
transaction activity during the 24X Market Session by reporting the
transaction activity in the 24X Market Session on a delayed basis as
currently required under the UTP and CTA Plans;
5. 24X will provide the Commission with quarterly data regarding
the volume of quoting and trading activity during the 24X Market
Session while the exemptive relief is effective;
6. NSCC shall have in place rules approved by the Commission
permitting it to clear and settle trades that occur during the 24X
Market Session; and
7. 24X will file a proposed rule change pursuant to section 19(b)
of the Exchange Act and the rules thereunder confirming its ability to
comply with (1) its obligations under the Exchange Act and the rules
thereunder during the 24X Market Session, and (2) the other conditions
that are set forth in this exemptive order.
By the Commission.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2026-16572 Filed 8-13-26; 8:45 am]
BILLING CODE 8011-01-P