US Stocks Put Price Guardrails in Place Before 23/5 Trading
The U.S. Securities and Exchange Commission is proposing to repeal the trade-through rule in Regulation NMS, while exchanges submit a temporary price…
What happened
The closing bell on U.S. stock markets may no longer mean trading has truly stopped. On June 11, the U.S. Securities and Exchange Commission (SEC) proposed amendments to Regulation NMS, seeking to repeal Rule 611, the trade-through rule, and Rule 610(e), which prohibits locked and crossed quotations. These two rules have long been used to coordinate quote and execution priority across different trading venues and form an important foundation of the U.S. stock market’s “national market system.”
At the same time, market participants including Nasdaq, NYSE, Cboe, and FINRA have submitted amendments to the national market system plan to the SEC, setting temporary price protections for expanded overnight trading. The proposal covers the “overnight protected session” from 9 p.m. to 4 a.m. Eastern Time, Sunday through Thursday, and would initially use a 20% price band to restrict executions at extreme prices. SEC filings say that 24X National, NYSE Arca, and Nasdaq have already been approved to offer nearly 23-hour trading, five days a week, and that the new protection mechanism is a supporting measure for that expansion.
Why it matters
This is not simply about extending trading hours; it is about rewriting how orders are routed, compared, and executed.
If Rule 611 is repealed, brokers and trading venues would gain greater flexibility in handling orders. Supporters may argue that technology, speed, and market participation have changed, and that the complexity and cost introduced by the old rules are no longer justified; SEC Commissioner Mark Uyeda has also said the relevant rules may create unnecessary inefficiency in today’s technology-driven trading environment. But once the rule is removed, what qualifies as “best execution,” how investors judge execution quality, and whether different trading venues will develop new informational advantages will all need to be redefined.
Overnight trading magnifies these issues. Liquidity is usually thinner at night, spreads are wider, and corporate announcements, overseas market swings, and sudden news continue to feed into prices. The 20% price band proposed by exchanges is not meant to prevent all sharp moves; rather, it adds a minimum circuit-breaker-style safeguard to the new session first, then uses real trading data to decide whether to adjust it. In other words, the market is being allowed to run first, then observed, then re-rule the rules.
For investors, around-the-clock trading increases the chance to react to overseas news and post-market events; for brokers, market makers, and exchanges, it means quotes, risk controls, clearing, data distribution, and customer service must all cover new hours. The key competitive factor going forward will not only be who can stay open longer, but also who can provide more reliable price discovery in a low-liquidity environment.
What to watch
First, whether the SEC will ultimately approve the repeal of Rule 611, and whether any new rules will come with additional transparency, best-execution, or market-data requirements. The SEC has currently set August 17, 2026 as the deadline for public comments, and the proposal has not yet become final rule.
Second, whether the overnight price band can reduce erroneous executions in a real market without unduly hindering price discovery. Exchanges plan to implement the system in phases and may later switch to dynamic price bands that change with market activity, while recalibrating parameters for different types of stocks.
Third, whether retail investors will actually get better trading conditions. Longer trading hours do not automatically mean deeper liquidity; if the overnight market is mainly priced by a small number of professional participants, around-the-clock trading could also bring higher execution costs and more pronounced information asymmetry.
The next stage of U.S. market structure may no longer revolve around what time exchanges open, but around how price, liquidity, and responsibility are redistributed in an always-on market.
Sources
Information only. No investment, legal, tax, or financial advice.