SEC approves 20% LULD price bands for overnight trading from 9:00pm ET

The Securities and Exchange Commission approved Amendment No. 27 to the Plan to Address Extraordinary Market Volatility, the Limit Up-Limit Down (LULD) Plan, on 5 August. The order calls it a first step to address potential extraordinary volatility in NMS stocks between 9:00pm and 4:00am ET. The order says the Commission received no comments on the amendment.

Nasdaq, Inc. filed the amendment on 27 May on behalf of all 18 plan participants: 24X, the four Cboe equities exchanges, FINRA, IEX, LTSE, MEMX, MIAX PEARL, Nasdaq Texas, Nasdaq PHLX, the Nasdaq Stock Market, and the NYSE, NYSE American, NYSE Arca, NYSE Texas and NYSE National exchanges.

How the bands work

The amendment adds a new Section VIII, “Overnight Protections”, to the plan. It defines Overnight Protected Hours as 9:00pm ET, Sunday to Thursday, to 4:00am ET the next calendar day.

• Two reference prices. The primary listing exchange calculates each stock’s bands from the listing market’s official closing price and from the consolidated last round-lot sale as of 7:45pm ET, both adjusted for corporate actions.
• 20% either side. The lower band sits 20% below the lower of the two reference prices. The upper band sits 20% above the higher of the two. For leveraged ETPs, the 20% is multiplied by the product’s leverage ratio.
• Minimum widths. For stocks that closed below $1.00, each band must be at least $1.00 from the reference price. For stocks that closed at $1.00 or more, the minimum is $3.00. Leveraged ETPs multiply these minimums by their leverage ratio too.
• Timing. Listing exchanges must send the bands to the Securities Information Processors (SIPs) by 8:55pm ET. The SIPs are to publish them before 9:00pm ET.

According to the order, the participants chose 20% to match the static band protections that ATSs already use overnight. They said two reference prices guard against an official close that has gone stale because of news or post-market trading by the time the overnight session starts. They picked 4:00am ET as the end point so that earnings and other pre-market disclosures can feed into prices without bands based on the prior day’s trading.

Halts, not pauses

During regular trading hours, the primary listing exchange must declare a Trading Pause if a stock does not exit a Limit State within 15 seconds. Overnight, hitting a band will not trigger an automatic pause. Instead, the primary listing exchange may declare a Regulatory Halt when it needs to keep the market fair and orderly. The order gives two examples: orders consistently arriving outside the bands, or the bands otherwise limiting price discovery.

Once halted overnight, a stock does not reopen during Overnight Protected Hours, and participants will reject orders while the halt lasts. The Commission said this lets trading resume in the next session, when there is likely to be more liquidity.

The amendment does not say how to handle corporate actions overnight. That decision is left to each listing exchange.

A first phase

The participants describe these measures as Phase 1. They plan to report on Phase 1 in the plan’s quarterly reports, starting with the first full quarter of overnight trading. Their evidence is then to back a Phase 2 amendment that replaces the interim measures. The plan’s implementation section now expects the protections to start on 6 December 2026, subject to SIP systems changes under the CTA and UTP plans.

The Commission called the amendment “a measured, first-step to address extraordinary volatility during overnight trading of NMS Stocks”. It found the amendment consistent with Section 11A of the Exchange Act and Rule 608 of Regulation NMS. The order places it alongside recent approvals allowing certain exchanges to trade 23 hours a day, five days a week.

Why it matters

Analysis. For market practitioners, the obligation falls on every trading centre active overnight, not just on exchanges. ATSs, wholesalers and single-dealer platforms that trade NMS stocks between 9:00pm and 4:00am ET will need written policies and procedures that block both executions and displayed prices outside the bands. ATSs that trade overnight already use 20% static bands, according to the order, but their reference prices may differ from the plan’s pair of closing price and 7:45pm ET consolidated print.

Because hitting a band does not pause trading, a fast move can leave a stock pinned at a band with orders queuing behind it until the listing exchange decides whether to halt. A halt lasts the rest of the night, so desks with overnight client flow need procedures for orders rejected during a halt and for the restart once Overnight Protected Hours end at 4:00am ET.

Market data teams should note the 8:55pm ET delivery deadline. Overnight band values become another SIP field that order-entry and risk systems need to consume before 9:00pm ET each trading night.

What we are watching

• Rule filings from the listing exchanges on how they will use the overnight Regulatory Halt.
• The data the participants collect for the Phase 2 proposal, including how often stocks trade at or near the bands.

Added 1 Nov 2026 to the Market Structure section; dated to the event, not published at the time.

Update, 7 October 2026: The Commission put Amendment No. 29 to the LULD Plan into effect on a temporary basis of up to 120 days. It moves the time of the consolidated last round-lot sale used as a reference price from 7:45pm ET to 7:30pm ET. The participants said the change aligns with current ATS practice and gives ATSs that trade from 8:00pm ET time to calculate and apply similar bands. Source: Release No. 34-106624, U.S. Securities and Exchange Commission, 7 Oct 2026.

Sources

• Release No. 34-106042: Order approving the Twenty-Seventh Amendment to the LULD Plan (File No. 4-631), U.S. Securities and Exchange Commission, 5 Aug 2026
• Release No. 34-105596: Notice of filing of Amendment No. 27 to the LULD Plan, U.S. Securities and Exchange Commission, 1 Jun 2026