SRO Monitor Digest

Nasdaq is finally switching on a reorganized trading-halt rule (Rule 4120) that the SEC approved back in 2022 but that never went live because the industry needed to coordinate implementation across exchanges. Because the old approved text got stale while Nasdaq kept amending its live rule, this filing refreshes the dormant text to match current practice — including night session halts, LULD reopen procedures, ETP initial opens, direct listings with capital raise, and reverse-split halts. It took effect immediately upon filing with the SEC waiving the usual 30-day delay, so the harmonized cross-market halt framework is now operative; participants see consistent halt/resumption definitions and updated cross-references rather than any new substantive halt policy.

NYSE filed two immediately effective changes to its closing auction. The Price List filing nearly doubles the free 'Late D Order' allowance for Floor-broker-affiliated member organizations from 5.25 million to 10 million shares per month (plus an MOC discount wording cleanup), effective August 11, 2026. The separate Rules 7.31/7.35/7.35B filing broadens published closing imbalance data to include Closing Imbalance Offset Orders and, in the final 10 minutes, Discretionary Orders, moves the D Order cancel/modify cutoff from 10 seconds to one minute before the close, and deletes stale UTP D Order routing text; that change is targeted for implementation no later than Q1 2027. Both are subject only to the SEC's 60-day suspension window.

OCC, the clearinghouse for all U.S. listed options, wants to replace its product-by-product approach to extended/overnight trading with a general framework: OCC itself decides which products and which hours count as 'extended trading hours' and get its existing ETH risk controls (extra margin add-on, clearing-member pre-approval, overnight credit monitoring, kill-switch access). This is the clearing plumbing needed to make Cboe's, Nasdaq's and NYSE's approved early-morning (6:30–8:25 a.m. CT) multi-listed equity options sessions and CFE's VIX futures options actually clearable, and OCC also wants the ability to revoke a member's ETH privileges. The SEC has only published the filing for comment — nothing is approved yet; the Commission must approve, disapprove, or open proceedings within 45–90 days, and approval is likely since OCC is codifying an existing 2015-era framework rather than inventing new risk models.