Nasdaq amends Rule 4120 to require halts for newly listed ETPs in 23/5 trading

The Nasdaq Stock Market LLC filed a proposed rule change on Oct. 1, 2026 to amend Equity 4, Rule 4120. The amendment, published as a notice of filing and immediate effectiveness (FR Doc No. 2026-21137; Release No. 34-106658; File No. SR-NASDAQ-2026-088), requires a regulatory halt at the start of the Night Session for newly listed exchange-traded products (ETPs) that have not elected the Initial ETP Open process. Trading may resume no earlier than the Day Session opening at 4:00 a.m. Eastern Time (ET) on the first day of trading, with a typical resumption at 9:00 a.m. ET via the Nasdaq Halt Cross.

The purpose of the amendment is to align ETP launch procedures with the Exchange's 23-hour-per-day, five-day-per-week ("23/5") trading schedule approved on April 10, 2026. Under 23/5 trading, the Night Session runs from 9:00 p.m. to 4:00 a.m. ET, followed by a de minimis "Night-to-Day Handoff" before the Day Session begins. Nasdaq determined that the early Night Session offers lower liquidity and reduced price-discovery opportunities, prompting the halt for ETPs that have not opted into the Initial ETP Open. The rule gives Nasdaq flexibility to open such ETPs at 4:00 a.m. ET if a release from the halt is obtained, while most will resume at 9:00 a.m. ET, consistent with existing procedures for reverse stock splits.

The amendment is filed under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4, and Nasdaq cites Section 6(b) and Section 6(b)(5) of the Act as its statutory basis, emphasizing the promotion of just and equitable trade and protection of investors.

The Commission is publishing the notice to solicit comments from interested persons. The comment period and submission instructions are available on Nasdaq's rule-filing website and at the Exchange's principal office.