[Federal Register Volume 91, Number 159 (Wednesday, August 19, 2026)]
[Notices]
[Pages 53677-53680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-16856]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106139; File No. SR-NASDAQ-2026-064]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend Equity 4, Rule 4120 Regarding Trading Halts
August 14, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 3, 2026, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the previously approved but not yet
operative Equity 4, Rule 4120 to update that rule text to reflect
intervening rule changes incorporated in Nasdaq's current operative
Rule 4120. Nasdaq also proposes to make related conforming changes to
other Nasdaq rules.
While these amendments are effective upon filing, the Exchange has
designated the proposed amendments to be operative on August 10, 2026.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings, and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to amend Equity 4, Rule 4120 to make operative the
rule framework that the Commission previously approved in SR-Nasdaq-
2022-017,\3\ as amended, and to update that approved but not yet
operative rule text so that it reflects amendments that have been
incorporated into Nasdaq's current operative Rule 4120 since approval
of that filing. Nasdaq also proposes related conforming changes to
other Nasdaq rules that reference Rule 4120.
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\3\ See Securities Exchange Act Release No. 95069 (June 8,
2022), 87 FR 36018 (June 14, 2022) (SR-NASDAQ-2022-017).
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Although the Commission approved that framework, the rule text did
not become operative immediately. Implementation of the revised halt
framework was dependent on industry readiness, including readiness by
other exchanges to implement corresponding changes. During the period
in which the approved Rule 4120 framework remained inoperative, Nasdaq
continued to amend its current operative Rule 4120 through separate
rule changes. As a result, the previously approved but dormant Rule
4120 framework must now be conformed to the current operative text of
Rule 4120 before it becomes operative. To the extent the applicable
rule text has not changed since the Commission's approval of SR-Nasdaq-
2022-017, however, Nasdaq is not proposing substantive changes to that
text, and the proposed rules remain consistent with the rules approved
in that filing.
This proposal is therefore designed to avoid implementing an
outdated version of Rule 4120. The proposal preserves the structure and
core regulatory framework approved in SR-Nasdaq-2022-017, while
incorporating intervening updates that are reflected in Nasdaq's
current operative Rule 4120. As proposed in SR-Nasdaq-2022-017, the
Exchange would replace the entirety of the currently operative Rule
4120 with the Rule 4120 herein proposed. The Exchange believes that
making these updates before the approved framework becomes operative
will promote clarity, consistency, and transparency for Members,
issuers, and market participants.
Background
Rule 4120 sets forth Nasdaq's authority and procedures with respect
to trading halts, trading pauses, regulatory halts, operational halts,
and the resumption of trading following such events. The previously
approved Rule 4120 framework was designed to conform Nasdaq's rules to
amendments to the Nasdaq UTP Plan, including Amendment 50,\4\ which
established common cross-market concepts and procedures for regulatory
and operational halts. The framework incorporated UTP Plan-based
definitions and concepts and reorganized Rule 4120 to address authority
to initiate Regulatory Halts, procedures for initiating Regulatory
Halts, Regulatory Halts initiated by other markets, resumption of
trading after a Regulatory Halt, and Operational Halts. That filing was
intended to harmonize certain halt and resumption procedures across
self-regulatory organizations and to provide greater transparency
regarding regulatory and operational halts.
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\4\ See Securities Exchange Act Release No. 92071 (May 28,
2021), 86 FR 29846 (June 3, 2021) (File No. S7-24-89) (approving
Amendment No. 50 to 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'')).
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The approved framework also moved certain existing provisions into
a more organized structure and updated related cross-references in
other Nasdaq rules.
[[Page 53678]]
In particular, the framework organized halt authority into
discretionary and mandatory Regulatory Halt provisions, incorporated
procedures for resumption after Regulatory Halts and SIP Halts and
maintained Nasdaq-specific processes for reopening trading through the
Nasdaq Halt Cross where applicable.
Because the approved framework remained inoperative pending
coordinated industry implementation, however, the current operative
version of Rule 4120 continued to evolve. The changes proposed in this
filing incorporate those intervening current-rule updates into the
approved Rule 4120 structure so that, when the reorganized framework
becomes operative, it will reflect the rule text currently maintained
in Nasdaq's operative rules. To the extent the applicable rule text has
not changed since the Commission's approval of SR-Nasdaq-2022-017,
Nasdaq is not proposing substantive changes to that text, and the
proposed rules remain consistent with the rules approved in that
filing.
Description of Proposed Changes
The proposed changes generally fall into several categories, each
of which is intended to conform the previously approved but not yet
operative Rule 4120 framework to current operative Rule 4120 and to
preserve the intended operation of related Nasdaq rules once the
reorganized framework becomes operative.
Definitions and Trading Session Terminology. Nasdaq proposes to
update the definitions section of Rule 4120 to align the approved but
inoperative framework with current Rule 4120.\5\ These updates include
adding Class ETF Shares to the definition of Derivative Securities
Product and updating terminology relating to Pre-Market Hours, Post-
Market Hours, Day Session, Night Session, and Regular Market Hours.
Nasdaq also proposes to use current trading-session terminology
throughout the rule, including in provisions governing trading in
certain Derivative Securities Products pursuant to unlisted trading
privileges. These changes conform the dormant framework to terminology
and session definitions reflected in Nasdaq's current rules.
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\5\ See proposed Rule 4120(a).
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Night Session and Corporate Action-Related Halt Provisions. Nasdaq
proposes to incorporate provisions now reflected in current Rule 4120
relating to the Night Session and the transition between the Day
Session and Night Session.\6\ These provisions include halting trading
at the conclusion of the Day Session and resuming trading with the
commencement of the Night Session, order cancellation at specified
session endpoints, the Exchange's authority to pause trading during the
Night Session, and procedures for halting or delaying commencement of
trading during the Night Session when the primary listing market has
halted trading or delayed commencement of trading in a security. Nasdaq
also proposes to incorporate current provisions requiring Nasdaq, when
it is the Primary Listing Market, to halt trading in a security before
the end of Post-Market Hours on the day immediately preceding the
market effective date of a reverse stock split, with trading resuming
pursuant to the Nasdaq Cross Halt mechanism under Rule 4753.\7\
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\6\ See proposed Rule 4120(a)(7), (8), (19), (20), and (21), and
proposed Rule 4120(b)(1)(B)(ix) and (b)(1)(C)(v)-(vi).
\7\ See proposed Rule 4120(b)(1)(C)(vi).
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Limit Up-Limit Down and Order Handling Updates. Nasdaq proposes to
conform the Limit Up-Limit Down provisions to current Rule 4120,
including updates to terminology and order handling provisions.\8\
These updates include references to CORE FIX protocols and to Managed
Pegging, Discretionary, and Reserve Order Attributes in the order
repricing provisions, as well as an updated cross-reference to the
definition of Permitted Price in Rule 4763. Nasdaq also proposes to
retain and relocate, within the reorganized framework, current
provisions requiring Nasdaq to notify the Processor if it is unable to
reopen trading due to a systems or technology issue.
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\8\ See proposed Rule 4120(b)(1)(C)(ii).
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Non-IPO Regulatory Halt Reopening Procedures. Nasdaq proposes to
update the resumption provisions in Rule 4120(b)(4) to reflect current
operative rule text for reopening after a non-IPO Regulatory Halt.\9\
These changes include incorporating provisions for establishing Auction
Reference Prices and Auction Collars, extending the Display Only Period
when an order imbalance exists, adjusting Auction Collar prices during
extended display-only periods, defining order imbalances for purposes
of the reopening process, and notifying the securities information
processor if the Exchange is unable to reopen trading due to a systems
or technology issue. Nasdaq also proposes to incorporate the current
provision under which a trading halt that exists at or after 3:50 p.m.
in a stock reopens via a Hybrid Closing Cross pursuant to Rule
4754(b)(7). To the extent that text in the approved but not operative
Rule 4120(b)(4) are superseded by these proposed conforming changes,
the Exchange proposes to delete that text as obsolete.
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\9\ See proposed Rule 4120(b)(4)(A).
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LULD Trading Pause Reopening Procedures. Nasdaq proposes to retain
the LULD-specific reopening process in the reorganized framework and to
update related cross-references.\10\ The proposal preserves the current
process for establishing the Auction Reference Price and Auction
Collars for a Trading Pause initiated under the Limit Up-Limit Down
Mechanism, extending the Display Only Period when an order imbalance
exists, adjusting the applicable Auction Collar, and reopening via a
LULD Closing Cross when a Trading Pause exists at or after 3:50 p.m.
These proposed updates are non-substantive and are intended only to
renumber the LULD reopening provisions within the approved but
inoperative Rule 4120 structure and update related cross-references
accordingly.
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\10\ See proposed Rule 4120(b)(4)(A)(i)c.
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Initial ETP Open. Nasdaq proposes to incorporate provisions
reflected in current Rule 4120 relating to an optional Initial ETP Open
process for Exchange-Traded Products on their first day of trading.\11\
These provisions address the circumstances under which an issuer may
opt into the process, the role of a broker-dealer serving as Designated
Liquidity Provider, the Display Only Period and Pre-Launch Period,
validation checks, price-band selection, and the circumstances under
which Nasdaq may delay, postpone, or reschedule the Initial ETP Open.
Incorporating these provisions into the reorganized framework conforms
the dormant rule text to the current operative rule.
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\11\ See proposed Rule 4120(b)(1)(B)(viii) and proposed Rule
4120(b)(4)(A)(i)d.
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IPO, Direct Listing, and Direct Listing with a Capital Raise
Updates. Nasdaq proposes to update the IPO and direct listing
provisions to reflect current Rule 4120.\12\ These changes include
conforming cross-references to the IPO Halt process, updating
references to the role of the financial advisor in connection with
initial pricing of securities that have not been listed on a national
securities exchange immediately prior to initial pricing, and
incorporating current Direct Listing with a Capital Raise provisions.
The Direct Listing with a Capital Raise
[[Page 53679]]
provisions include the related Price Range, DLCR Price Range, Price
Volatility Constraint, Pre-Launch Period, Post-Pricing Period, public
dissemination of Current Reference Price information, and related
disclosure and validation conditions. These updates conform the
approved but inoperative framework to current rule text governing those
initial pricing processes.
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\12\ See proposed Rule 4120(b)(1)(B)(iii) and proposed Rule
4120(b)(4)(C).
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Operational Halt and Resumption Updates. Nasdaq proposes to retain
the Operational Halt provisions and related resumption language under
Rule 4120(c) largely as approved in SR-Nasdaq-2022-017.\13\ These
provisions preserve Nasdaq's authority to declare an Operational Halt
when appropriate and clarify how Nasdaq resumes trading following an
Operational Halt, including when Nasdaq is the Primary Listing Market
and when Nasdaq is not the Primary Listing Market. The Exchange is not
proposing any changes to these operational halt-related provisions.
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\13\ See proposed Rule 4120(c).
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Conforming Cross-Reference Changes. Nasdaq proposes conforming
changes to related rules that reference Rule 4120. These changes update
cross-references in rules relating to order types, the Nasdaq Halt
Cross, the Nasdaq Closing Cross, dually listed securities, direct
listings, certain derivative securities, the IPO Indicator Service, and
clearly erroneous transactions.\14\ These changes are intended to
preserve the intended operation of the affected rules after the
reorganized Rule 4120 framework becomes operative and to avoid obsolete
references to the current Rule 4120 structure.
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\14\ See, e.g., proposed Equity 4, Rules 4702, 4753, 4754;
proposed Nasdaq Listing Rules 5711, IM-5220; IM-5315-2, IM-5405-1,
and IM-5505-1; proposed Equity 7, Section 115, and proposed Equity
11, Rule 11890.
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Implementation
The Exchange intends to implement the proposed rule change on
August 10, 2026, as part of a cross-market implementation of the
revised Rule 4120's regulatory and operational halt framework. The
Exchange will provide notice of the scheduled implementation date prior
to implementation.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\15\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\16\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange, and, in
particular, with Section 6(b)(5) of the Act. The proposal is designed
to promote just and equitable principles of trade, remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and protect investors and the public interest.
The Exchange believes that the proposal is consistent with Section
6(b)(5) because it will allow Nasdaq to implement a previously approved
Rule 4120 framework in a current and accurate form. Implementing the
approved framework without incorporating intervening changes reflected
in current Rule 4120 could create confusion and result in an operative
rule that does not align with Nasdaq's current rulebook. By conforming
the dormant approved framework to current operative Rule 4120 before
implementation, the proposal will promote clarity and transparency for
Members and market participants.
The Exchange also believes that the proposal is consistent with
Section 6(b)(5) of the Act because it would make operative rule changes
necessary to conform Nasdaq's rules to amendments to the applicable
Equity Data Plan \17\ governing regulatory and operational halts. As
reflected in SR-Nasdaq-2022-017, those amendments were intended to
promote greater transparency, clarity, and consistency in the
circumstances under which trading may be halted and resumed across
markets. The Exchange believes that implementing the previously
approved Rule 4120 framework, with the conforming updates described
herein, will advance those same objectives by supporting uniform,
transparent, cross-market halt rules, reducing the potential for
confusion during cross-market events, fostering cooperation and
coordination among SROs and market participants, and assisting in the
maintenance of fair and orderly markets.
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\17\ The effective national market system plan(s) that currently
govern the collection, consolidation, processing and dissemination
of consolidated equity market data via the exclusive securities
information processors (``SIPs''), are (1) the Consolidated Tape
Association Plan (``CTA Plan''), (2) the Consolidated Quotation Plan
(``CQ Plan''), (3) the UTP Plan, and (4) any successor thereto to
the named plans (collectively, the ``Equity Data Plans'').
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The proposal also supports fair and orderly markets by preserving
the Commission-approved organization of Rule 4120 while incorporating
current rule provisions concerning trading sessions, halt authority,
reopening procedures, LULD processes, Initial ETP Opens, direct
listings, and related cross-references. These updates will help market
participants understand when Nasdaq may halt, pause, or resume trading
and how related Nasdaq rules will operate once the reorganized
framework becomes operative.
The Exchange further believes that the proposal protects investors
and the public interest by avoiding the implementation of stale rule
text. The proposed amendments do not seek to rework the fundamental
policy basis of the approved Rule 4120 reorganization. Rather, they
update the approved but inoperative framework to reflect intervening
rule text that is already incorporated in Nasdaq's current operative
rules. This approach promotes consistency between the rule text being
made operative and the rule text on which Members and market
participants currently rely.
The conforming cross-reference changes are also consistent with
Section 6(b)(5) because they will reduce confusion and maintain the
intended operation of Nasdaq's rules after the reorganized Rule 4120
framework becomes operative. Updating references in related rules is
necessary so that those rules continue to point to the correct
provisions within the reorganized Rule 4120 structure.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposal is intended to
make operative a previously approved Rule 4120 framework and to conform
that framework to current operative Rule 4120. The proposal will apply
equally to all Members and market participants subject to the affected
rules.
The Exchange does not believe that the proposal will impose an
undue burden on intermarket competition. The previously approved Rule
4120 framework was designed, in part, to harmonize halt and resumption
procedures across markets. This proposal supports that objective by
preparing the approved framework for implementation in a form that is
[[Page 53680]]
consistent with Nasdaq's current operative rule text.
The Exchange also does not believe that the proposal will impose an
undue burden on intramarket competition. The proposed updates are
generally conforming, organizational, or cross-referential in nature,
or otherwise incorporate provisions already reflected in current
operative Rule 4120. They do not unfairly discriminate among Members or
classes of market participants.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and subparagraph
(f)(6) of Rule 19b-4 thereunder.\19\
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\18\ 15 U.S.C. 78s(b)(3)(A)(iii).
\19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\21\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing and in advance
of the planned August 10, 2026, implementation date. The Exchange
states that a waiver of the operative delay would permit Nasdaq to
implement the previously approved Rule 4120 framework in a current and
accurate form, conform Nasdaq's rules to amendments to the applicable
Equity Data Plans governing regulatory and operational halts, and
support coordinated implementation of uniform cross-market halt
procedures. The Exchange also states that the proposed rule change
makes operative a Commission-approved framework with conforming updates
to reflect intervening changes already incorporated in Nasdaq's current
operative rules. For these reasons, and because the proposed rule
change raises no new or novel legal or regulatory issuers, the
Commission finds that waiver of the operative delay is consistent with
the protection of investors and the public interest. Accordingly, the
Commission waives the 30-day operative delay and designates the
proposed rule change to be operative upon filing.\22\
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\20\ 17 CFR 240.19b-4(f)(6).
\21\ 17 CFR 240.19b-4(f)(6)(iii).
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \23\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\23\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NASDAQ-2026-064 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NASDAQ-2026-064. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NASDAQ-2026-064 and should be submitted
on or before September 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-16856 Filed 8-18-26; 8:45 am]
BILLING CODE 8011-01-P