MX2 proposes extending clearly erroneous trade protections to overnight hours
The amendment to Rule 11.15 takes effect immediately, covering MX2 market participants trading during overnight protected hours.
On October 19, 2026, MX2 LLC filed a non-controversial proposed rule change with the Securities and Exchange Commission to amend Rule 11.15, which governs clearly erroneous executions. The filing, identified as Release No. 34-106729 and File No. SR-MX2-2026-10, is effective immediately under Section 19(b)(1) of the Securities Exchange Act of 1934.
The amendment responds to the Commission's August 5, 2026 approval of Overnight Protected Bands for 23/5 Trading. MX2 seeks to add the term "LULD Protected Hours," encompassing both Regular Trading Hours and the newly defined Overnight Protected Hours (9:00 p.m. ET through 4:00 a.m. ET). The proposal replaces "Regular Trading Hours" with "LULD Protected Hours" in the first sentence of Rule 11.15(c)(1), thereby extending the existing restriction on clearly erroneous review to the overnight session.
Additional changes include updating the "Percentage Parameter" reference in Rule 11.15(c)(1)(B) to incorporate the Overnight Percentage Parameter defined in Section VIII of the LULD Plan, and revising language throughout Rule 11.15(c)(2), (d)(3) and (f) to cover transactions in NMS stocks not subject to the LULD Plan during Overnight Protected Hours. A non-substantive edit substitutes "LULD Plan" for the longer descriptive phrase in Rule 11.15(c)(1)(A).
The Exchange's rationale, outlined in the filing, is to align the clearly erroneous execution review process with the LULD mechanism across all protected trading periods, providing market participants greater certainty that trades executed within either set of price bands will stand. Comments on the proposal are being solicited as required by Rule 19b-4.
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