Nasdaq PHLX expands clearly erroneous trade rules to overnight hours

On September 28, 2026, Nasdaq PHLX LLC filed with the Securities and Exchange Commission a proposed amendment to Equity 4, Rule 3312 (Clearly Erroneous Transactions). The notice, released under Release No. 34-106630 and File No. SR-Phlx-2026-60, was published in the Federal Register on October 7, 2026 (Vol. 91, No. 196, pp. 64975-64978, FR Doc No. 2026-20805) and is effective immediately.

The amendment is intended to align the clearly erroneous transaction review process with the Commission's August 5, 2026 approval of Overnight Protected Bands for 23/5 trading under the Limit Up-Limit Down (LULD) Plan. By extending the rule's restrictions from Market Hours to the newly defined Overnight Protected Hours (9:00 p.m. ET through 4:00 a.m. ET), the Exchange seeks to provide greater certainty that trades executed within those bands will stand.

Key changes include replacing the phrase "Market Hours" with "LULD Protected Hours," adding definitions for "Overnight Protected Hours" and "Overnight Price Bands," and revising the percentage-parameter language to incorporate the Overnight Percentage Parameter. The heading of Rule 3312(a)(2)(C)(2) is amended to reference transactions occurring during LULD Protected Hours in NMS stocks not subject to the LULD Plan, and the same language is propagated to related sub-paragraphs.

The full text of the proposed rule change is available on the Exchange's website at https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings and at the Exchange's principal office. Interested parties may submit comments to the Commission as provided in the filing.

Upon adoption, the amendment will extend the current certainty framework to overnight trading sessions, ensuring that transactions executed within the Overnight Price Bands are excluded from clearly erroneous review, consistent with the Commission's rationale for the existing rule.