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NYSE proposes extending clearly erroneous trade protections to overnight trading

NYSE proposes extending clearly erroneous trade protections to overnight trading

Rule Changes

NYSE, Cboe BZX, MEMX, MX2 and NYSE American filings extend price-band protection to the 9 p.m. to 4 a.m. session

October 19th, 2026: MEMX and MX2 file parallel overnight clearly erroneous rules

Overview

Updated Oct 30

Five exchanges have filed rules to stop overnight trades from being canceled as clearly erroneous, ahead of the industry's planned switch to 23-hour trading on December 6. NYSE American, Cboe BZX, MEMX and MX2 each filed versions of the change, and NYSE followed its September proposal with a wider rewrite of Rule 7.10 on October 8.

The change extends limit-up/limit-down price bands into the overnight session, from 9 p.m. to 4 a.m. ET, where temporary bands sit 20% above and below reference prices. Trades inside those bands cannot be broken. The filings take effect on filing but become operative only when 23/5 trading starts.

Why it matters

Overnight trades within the new 20% price bands would stand, removing cancellation risk as 23/5 trading begins December 6.

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Key Indicators

20%
Overnight price band width
Temporary static bands set 20% above and below reference prices during overnight hours.
Dec 6, 2026
23/5 trading launch date
Industry-wide start of 23-hour trading days, when the rule becomes operative.
7 hrs
Overnight protected session
9:00 p.m. to 4:00 a.m. ET nightly, five nights a week.

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Organizations Involved

New York Stock Exchange
New York Stock Exchange
Stock exchange
Filed a broader Rule 7.10 rewrite on October 8, 2026, after its September overnight-protection filing

The largest US equities exchange, proposing to extend clearly erroneous execution protections to overnight trading.
U.S. Securities and Exchange Commission
U.S. Securities and Exchange Commission
Federal regulator
Published notices on overnight clearly erroneous filings from NYSE, MEMX and MX2

The federal agency regulating US securities markets, responsible for approving or rejecting exchange rule changes.
LL
Limit Up-Limit Down Plan Operating Committee
Industry Governance Body
Proposed Overnight Price Bands

The committee governing the LULD Plan, which sets price bands to prevent extraordinary market volatility.
Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
Self-regulatory organization
Named in NYSE and MEMX filings as planning a substantively identical rule; no FINRA filing identified as of October 30, 2026

The self-regulatory body for US broker-dealers, planning a substantively identical rule change.
MEMX LLC
MEMX LLC
Stock exchange
Amended Rule 11.15 to extend clearly erroneous protections to overnight hours; effective immediately

A US equities exchange that filed a parallel overnight clearly erroneous rule on October 19, 2026.

Timeline

September 2022 December 2026

7 events Latest: October 19th, 2026 · 3 weeks ago
Tap a bar to jump to that date

  1. 23/5 trading industry-wide launch scheduled

    Upcoming Milestone

    Industry-wide commencement of 23-hour trading days, when the amended Rule 7.10 becomes operative.

  2. MEMX and MX2 file parallel overnight clearly erroneous rules

    Latest Rule Change

    MEMX filed SR-MEMX-2026-33 to amend Rule 11.15, reversing its September 23/5 filing and extending existing limits on breaking trades to the overnight session. MX2 filed a substantively identical change the same day. Both take effect immediately and become operative when 23/5 trading starts.

  3. SEC publishes Cboe BZX rule change for clearly erroneous executions in overnight trading

    Rule Change

    The SEC published Cboe BZX's proposal to amend Rule 11.17 (Clearly Erroneous Executions) to cover the overnight session. The exchange said other venues and FINRA plan to file substantively identical proposals. The rule becomes operative when 23/5 trading starts December 6.

  4. NYSE files broader rewrite of Rule 7.10

    Rule Change

    NYSE filed SR-NYSE-2026-50 to reorganize Rule 7.10, clarify how missing or erroneous price bands affect clearly erroneous review, revise its multi-stock event provisions, drop references to multi-day events and add a provision on cross-market coordination. The SEC published the filing for comment.

  5. SEC publishes NYSE Rule 7.10 amendment proposal

    Rule Change

    NYSE filed to amend Rule 7.10 to extend clearly erroneous execution protections to overnight trading hours, effective at the start of 23/5 trading.

  6. SEC approves overnight price bands

    Regulatory Approval

    The SEC approved Amendment 27 to the LULD Plan, establishing temporary static Overnight Price Bands of 20% for the overnight session.

  7. NYSE American makes clearly erroneous pilot permanent

    Rule Change

    NYSE American amended its clearly erroneous execution rules, making the pilot program permanent and limiting review circumstances.

Scenarios

1

23/5 trading launches December 6 with aligned rules

Likely Resolves by Dec 6, 2026

Discussed by: NYSE filing; Federal Register notice

The SEC accepts the NYSE proposal and identical filings from other exchanges and FINRA. Because the filing is for immediate effectiveness, the rule takes effect without prolonged review unless the SEC intervenes within its objection window. The rule then becomes operative at the December 6 launch.

2

Launch slips past December 6

Possible Resolves by Dec 6, 2026

Discussed by: NYSE Extended Hours FAQ (flags regulatory approval required)

If the SEC or another regulator delays any of the identical filings, the industry-wide launch could slip. The rule change is explicitly tied to the launch date, so a delay in either pushes the other. This would mark a postponement of the 23/5 trading timeline.

3

Overnight price bands adjusted after launch

Possible Resolves by Dec 1, 2027

Discussed by: LULD Plan Operating Committee (committed to post-implementation evaluation)

The proposal states the Operating Committee will evaluate the temporary 20% bands after implementation and propose changes in a new plan amendment. If the bands prove mispriced for thin overnight liquidity, a new amendment would adjust them, and the clearly erroneous rule would follow.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

May 2010

Flash Crash (2010)

The Dow Jones Industrial Average plunged nearly 1,000 points in about 36 minutes, wiping out roughly $1 trillion in market value before recovering. Some stocks traded at absurd prices — Accenture briefly traded at a penny.

Then

The SEC and Commodity Futures Trading Commission opened investigations, exposing flaws in market structure.

Now

The crash led to the Limit Up-Limit Down Plan, a set of price bands designed to pause trading during extreme volatility.

Why this matters now

The LULD Plan is the mechanism this rule extends. The new Overnight Price Bands are a direct successor to the bands created after the Flash Crash.

May-June 2012

LULD Plan adoption (2012)

The SEC approved the Limit Up-Limit Down Plan, setting price bands for national market system stocks during regular trading hours. Stocks trading outside their bands trigger a pause or halt.

Then

Bands applied only during the core trading session, protecting regular-hours trades from extreme volatility.

Now

The plan established the precedent that trades within price bands are not reviewable as clearly erroneous — the principle now being extended to overnight hours.

Why this matters now

The Overnight Price Bands are the first major expansion of the LULD framework beyond regular hours, and the Rule 7.10 amendment codifies the same 'stands' principle for the night session.

Sources

(12)
+6
Federal Register Federal Register NYSE U.S. Securities and Exchange Commission Daily Federal FXBrokers Federal Register Federal Register Federal Register Federal Register Daily Federal NYSE