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US exchanges rewrite Level 3 halt rule to keep 4 a.m. restart

US exchanges rewrite Level 3 halt rule to keep 4 a.m. restart

Rule Changes

Sixteen exchanges have filed changes so a 20% market decline does not reopen trading at 9 p.m. the same day.

Yesterday: MX2 and LTSE complete the set of 16

Overview

Updated 1 hour ago

On December 6, several US stock exchanges plan to open an overnight session from 9:00 p.m. to 4:00 a.m. Eastern. A circuit-breaker rule written for a daytime market would have forced trading to resume at 9:00 p.m. the same calendar day after a 20% crash, so 16 exchanges have moved to keep the old 4:00 a.m. restart.

The filings replace 'for the remainder of the trading day' with 'until 4:00 a.m. ET or later on the following trading day.' The thresholds themselves do not change. What remains open is the off-exchange side: the Financial Industry Regulatory Authority (FINRA) had not published a matching proposal as of November 2.

Why it matters

After a 20% crash, this rule decides whether US markets stay shut until 4 a.m. or reopen within hours.

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Key Indicators

20%
S&P 500 decline that triggers a Level 3 halt
A Level 3 decline halts trading for the rest of the session under current rules.
16
Exchanges with published Federal Register notices
MEMX filed first on September 11; MX2 and LTSE were the latest on November 2.
4:00 a.m. ET
Earliest resumption after a Level 3 halt
The filings write this time into rule text so overnight sessions cannot reopen sooner.
9:00 p.m. ET
Start of planned overnight session
Several exchanges intend to run an overnight session from 9 p.m. to 4 a.m. starting December 6.

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Organizations Involved

ME
MEMX LLC
Stock exchange
Filed the first Level 3 resumption change on September 11, 2026

A US equities exchange that opened in 2020 and filed the earliest of the 16 rule changes.
Long-Term Stock Exchange (LTSE)
Long-Term Stock Exchange (LTSE)
National securities exchange
Plans to implement its rule change on December 6, 2026

A US equities exchange that filed its Level 3 resumption change on November 2, 2026.
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
Stock exchange
Amended Rule 4121 to preserve the 4:00 a.m. resumption

One of the largest US equities exchanges, which filed its change on October 8, 2026.
New York Stock Exchange
New York Stock Exchange
Stock exchange
Filed with NYSE American, Arca, National and Texas on September 18, 2026

The largest US equities exchange group, which filed a coordinated set of Level 3 resumption changes.
Cboe Global Markets
Cboe Global Markets
Public Company
Filed for BZX, BYX, EDGA and EDGX on October 8, 2026

The exchange group behind four US equities venues, all of which amended their halt rules.
Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
Self-regulatory organization
Rule 6121.02 still reads 'for the remainder of the trading day' as of November 2

The private regulator that governs broker-dealer trading away from exchanges, including off-exchange halts.
U.S. Securities and Exchange Commission
U.S. Securities and Exchange Commission
Federal regulator
Received the exchange filings, which took effect on filing

The federal agency that oversees exchanges and self-regulatory organizations.

Timeline

2012 December 2026

6 events Latest: Yesterday
Tap a bar to jump to that date

  1. Overnight sessions and LTSE rule take effect

    Upcoming Implementation

    Several exchanges intend to open 9:00 p.m. to 4:00 a.m. sessions.

  2. MX2 and LTSE complete the set of 16

    Latest Rule Filing

    The last two notices are published; both take effect on filing.

  3. Cboe and Nasdaq venues file

    Rule Filing

    Seven more exchanges publish notices, bringing the total to 14.

  4. NYSE group and MIAX PEARL file

    Rule Filing

    Five NYSE venues and MIAX PEARL publish matching changes.

  5. MEMX files first resumption change

    Rule Filing

    The first exchange notice appears in the Federal Register.

  6. Uniform circuit breaker rules adopted

    Rule Change

    US exchanges and FINRA standardize market-wide halts at 7%, 13% and 20% S&P 500 declines.

Scenarios

1

FINRA files a matching rule before December 6

Possible Resolves by Dec 6, 2026

Discussed by: MX2 and LTSE filings, which say harmonized on- and off-exchange rules depend on FINRA; The Midpoint

FINRA publishes a proposed change to Rule 6121.02 replacing 'for the remainder of the trading day' with a 4:00 a.m. ET resumption. That closes the gap between exchange and off-exchange halts before overnight sessions begin. The exchange filings describe this outcome as the intended end state, but none controls FINRA's timetable.

2

Overnight trading launches with an off-exchange gap

Possible Resolves by Dec 6, 2026

Discussed by: The Midpoint, which notes FINRA Rule 6121.02 still reads 'for the remainder of the trading day'

The exchanges begin overnight sessions on December 6 while FINRA's rule is unchanged. On-exchange trading would stay shut until 4:00 a.m. after a Level 3 decline, but the off-exchange rule would not say the same thing. The result is a split halt regime rather than the single market-wide stop the filings describe.

3

First Level 3 halt confirms the 4 a.m. restart

Likely Resolves by End of 2027

Discussed by: Exchange filings, which say the change preserves current market practice

A 20% S&P 500 decline occurs after overnight trading begins. Trading stays halted until 4:00 a.m. ET or later the next trading day, matching the pre-2026 practice, and no exchange reopens at 9:00 p.m. That would show the amended wording worked as intended, though it depends on a severe decline actually happening.

Historical Context

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

2012

Uniform market-wide circuit breakers (2012)

All US equity exchanges and FINRA adopted a single set of circuit breaker rules tied to S&P 500 declines of 7%, 13% and 20%, replacing a patchwork of exchange-specific triggers.

Then

The rules standardized halts across cash equity and options markets.

Now

The 4:00 a.m. resumption after a Level 3 halt became market practice because no self-regulatory organization traded earlier.

Why this matters now

The 2026 filings change the wording, not the thresholds, to keep that practice intact once overnight sessions exist.

October 1987

Black Monday (October 1987)

US stocks fell by more than 20% in a single session, prompting exchanges to build coordinated halt mechanisms rather than let prices free-fall without pause.

Then

Exchanges introduced the first circuit breakers and trading halts.

Now

The idea of a market-wide cooling-off period became a permanent part of US market structure.

Why this matters now

The cooling-off period is the benefit the exchange filings say they are protecting from a 9:00 p.m. reopen.

March 2020

Pandemic selloff circuit breaker triggers (March 2020)

The S&P 500 fell fast enough during the COVID-19 selloff to trigger Level 1 halts repeatedly, giving markets 15-minute pauses.

Then

The halts briefly slowed trading but did not stop the decline.

Now

The episode became the most recent sustained test of the circuit breaker system.

Why this matters now

It shows how Level 1 and Level 2 pauses work in practice, and why the much rarer Level 3 halt has its own resumption rule.

Sources

(8)
+3
Federal Register The Midpoint MEMX MIAX Pearl Securities and Exchange Commission Federal Register Federal Register Federal Register