US exchanges are rewriting the restart language for the most severe market-wide circuit breaker before overnight equity sessions expand. The coordinated rule changes say that after a Level 3 market decline, trading will not resume until 4:00 a.m. Eastern Time or later on the following trading day—even if an exchange’s new systems would otherwise open at 9:00 p.m.[1][2][3]
A Level 3 decline is a 20% fall in the S&P 500 from the prior day’s close. Under the existing structure, it halts all NMS stocks for the remainder of the trading day. Once the trading day begins at 9:00 p.m., that phrase could produce an unintended same-evening restart unless the rule defines a later reopening point.[1]
The rule preserves the current cooling-off period
Before and after the 23-hour schedule
| Question | Without the amendment | Coordinated rule treatment |
|---|---|---|
| When does the next trading day begin? | A new night session can begin at 9:00 p.m. ET. | The expanded exchange schedule can still begin at 9:00 p.m. on ordinary days.Source 4Source 1 |
| What happens after a Level 3 halt? | “Remainder of the trading day” could be read to permit the 9:00 p.m. reopening. | Trading remains closed until 4:00 a.m. ET or later on the following trading day.Source 1Source 2Source 3 |
| Why wait? | An immediate night-session restart would shorten the existing cooling-off period. | The morning pre-market window can support broader price discovery before the opening auction.Source 1 |
Status of the market structure change
| Measure | Value | Context |
|---|---|---|
| Level 3 trigger | 20% S&P 500 decline from the prior close | The Level 3 mechanism remains the most severe market-wide threshold.Source 1 |
| Restart floor | 4:00 a.m. ET or later | The exact morning resumption can vary with an exchange’s normal reopening time and coordinated practice.Source 1Source 2 |
| Exchange filings | Immediately effective | Legal effectiveness is separate from operation. Nasdaq will coordinate its operative date and notify customers by Trader Alert.Source 1Source 2Source 3 |
| Nasdaq launch expectation | 6 December 2026 | The approved 23-hour framework remains subject to market-data and operational prerequisites.Source 1Source 4 |
Nasdaq gives three reasons for preserving the morning restart: maintaining the cooling-off period, allowing broader participation after a severe fall and avoiding the effect of ordinary overnight price bands on post-halt price discovery. It expects institutional participation to take longer to develop overnight; waiting for the pre-market session provides more scope to establish prices before the opening auction.[1]
Rule implementation and the overnight launch have separate triggers
The Nasdaq notice is a filing for immediate effectiveness, while the exchange will establish the operative date in coordination with other SROs and the Commission when implementation is feasible. Customers will be notified by Trader Alert. The 4 a.m. rule is an earliest restart point; the relevant exchange’s normal resumption time and coordinated market practice can produce a later reopening.[1][2]
The SEC approved Nasdaq’s 23-hour framework in April, but the exchange’s night session requires the securities information processors to collect and disseminate quotation and transaction data during the new hours and requires further operational confirmation. The September SEC roundtable also treated clearing, settlement, surveillance, closing prices and broker readiness as unfinished implementation questions.[4][5]
Nasdaq’s filing anticipates a night-session launch on or about 6 December 2026. Customer access also depends on each broker’s supported sessions, order types and risk controls. The circuit-breaker amendment carries the existing Level 3 cooling-off period into that longer schedule while those operational arrangements are completed.[1][4][5]
Sources & further reading
- Nasdaq filing on Level 3 market-wide circuit-breaker resumption for 23-hour trading US Securities and Exchange Commission · 5 Oct 2026 · Accessed 16 Oct 2026
- Cboe BZX filing on Level 3 market-wide circuit-breaker resumption US Securities and Exchange Commission · 5 Oct 2026 · Accessed 16 Oct 2026
- NYSE filing on Level 3 market-wide circuit-breaker resumption US Securities and Exchange Commission · 15 Sep 2026 · Accessed 16 Oct 2026
- SEC order on Nasdaq’s proposed 23-hour trading schedule US Securities and Exchange Commission · 10 Apr 2026 · Accessed 16 Oct 2026
- SEC roundtable on preparations for 24-hour trading US Securities and Exchange Commission · 17 Sep 2026 · Accessed 16 Oct 2026