NYSE and Nasdaq Move to 23-Hour Trading Day: Overnight Session Is An Evolution, But Not Yet a Revolution

On April 10, 2026, the Securities and Exchange Commission (the "SEC") approved the Nasdaq proposal to extend trading hours. Following Nasdaq's proposal, on May 12, 2026, NYSE submitted an amended rule filing describing the operational framework for extended-hours trading on NYSE Arca, a fully electronic exchange specializing in exchange-traded funds. Both exchanges plan to launch their overnight trading sessions on December 6, 2026, completing the 23/5 framework. The daily one-hour pause from 8:00 p.m. to 9:00 p.m. ET supports trade clearance, system maintenance and the transition to the next trade date.

The trading week begins Sunday at 9:00 p.m. ET, when the first Overnight Trading Session (the "Overnight Session") (9:00 p.m. to 4:00 a.m. ET) opens on a continuous basis with no opening auction; orders are accepted starting 8:59 p.m. ET. The Overnight Session then runs each weeknight through Friday morning. Only U.S. broker-dealers that are members of Nasdaq and NYSE Arca may trade; retail investors or other firms wishing to trade during the Overnight Session must access the session through a member. Overnight trades carry the extended-hour code "T" sale condition and are not last-sale eligible. Trades executed between 9:00 p.m. and midnight ET carry the next calendar day's trade date, and settle one day later; trades between midnight and 4:00 a.m. ET carry that day's trade date.

Although the two exchanges attain the same end result of near-continuous trading from 9:00 p.m. ET Sunday through 8:00 p.m. ET Friday, they have structured their sessions differently. NYSE Arca will operate four distinct sessions: the Overnight Session, an Early Session (4:00 a.m. to 9:30 a.m. ET), a Core Session (9:30 a.m. to 4:00 p.m. ET) and a Late Session (4:00 p.m. to 8:00 p.m. ET). Nasdaq, by contrast, will operate just two sessions: a Night Trading Session (9:00 p.m. to 4:00 a.m. ET) and a Day Trading Session ("Day Session") (4:00 a.m. to 8:00 p.m. ET) that consolidates the pre-market, core and post-market hours into a single session. The distinction matters primarily for order handling, since orders on each exchange do not carry across session boundaries, and for the terminology used in exchange rules and trade confirmations. This Commentary refers to the NYSE terminology "Overnight Session" for convenience when referring to the 9:00 p.m. to 4:00 a.m. ET window, which overlaps with the new proposed Nasdaq Night Trading Session.

Extended-hours trading is not new—pre-market and after-hours sessions have operated for years, and many of the concerns now being raised about 23/5 trading are simply updated versions of familiar issues. Currently, according to panelists at a recent SEC roundtable, the heaviest trading volume during overnight trading happens at the start of the overnight trading period in the 8:00 p.m. to 9:00 p.m. ET window, with relatively low volume throughout the rest of the night, which is the very time of the exchanges' proposed one hour trading pause (although alternative trading systems can remain open during that period). Several implications arise for public companies by the Overnight Session and compression of the remaining quiet window to a single hour.

Operational Actions

Public companies have historically used the overnight quiet window to implement corporate actions that require issuers, exchanges and market participants to update systems, orders, quotes and reference data before trading resumes. These include ticker symbol changes, Committee on Uniform Securities Identification Procedures ("CUSIP") changes, large dividends, forward and reverse stock splits and other share reclassifications or consolidations, de-Special Purpose Acquisition Company ("SPAC") transactions, spin-offs, security-type changes such as American Depositary Receipt ("ADR") and American Depositary Share ("ADS") ADR/ADS-to-ordinary-share conversions, and mergers or other business combinations resulting in a mandatory exchange, conversion, redemption or cancellation of the affected security. Continuous trading may raise the risk of investor confusion, price dislocations, erroneous executions and broader operational risk. To address this, the primary markets will impose mandatory halts on the affected security for the duration of the Overnight Session until 8:00 a.m. ET on the effective date of the corporate action, effectively preserving the pre-23/5 status quo for these events.
 

Disclosures and Trading Policies

The Overnight Session does not change Regulation Fair Disclosure ("FD")'s underlying requirements, and the practical impact on most issuers' disclosure processes is limited. There remains nonetheless the possibility that, under the new system, overnight news or news in another time zone could have an impact on companies' trading price during the Overnight Session, which may require companies to more closely monitor the need to react to certain events or activities during hours that were traditionally market close. Companies that release earnings or file Current Reports on Forms 8-K or 6-K after close of traditional market trading hours already see that news reflected in extended-hours trading; the Overnight Session simply extends that dynamic throughout the night. The more important question is whether existing insider trading policies and trading window procedures require amendment in light of the Overnight Session. The answer depends on where the company is listed. For NYSE-listed companies, the answer is generally yes: NYSE Arca's four-session structure preserves the Core Session (9:30 a.m. to 4:00 p.m. ET) as a separately defined session, so policies anchored to "Core Session hours" or "market close" at 4:00 p.m. ET retain a clear definitional foundation. For Nasdaq-listed companies, the analysis is different. By consolidating pre-market, regular and post-market hours into a single "Day Session" running from 4:00 a.m. to 8:00 p.m. ET, Nasdaq eliminates "Market Hours" as a separately defined session. A policy that references "Nasdaq market hours," "regular trading session," or "market close" without specifying 9:30 a.m. to 4:00 p.m. ET could now arguably refer to the entire Day Session—meaning "market close" is 8:00 p.m. ET, not 4:00 p.m. ET. Nasdaq-listed companies should review their insider trading policies and trading window definitions to confirm they reference specific clock times rather than exchange-defined session labels that have shifted.

Deal-Related Activities

The confidentially marketed public offering ("CMPO") has drawn the most attention, but the practical impact of the Overnight Session on deal execution may be narrower than it initially appears. In a typical CMPO, underwriters wall-cross selected institutional investors during the late afternoon, flip the deal public shortly after the close of traditional market trading hours at 4:00 p.m. ET and price within a few hours—well within the existing window that closes at 8:00 p.m. ET. Deal teams have operated successfully alongside extended-hours trading for years. The Overnight Session matters at the margins: deals that encounter unexpected resistance and cannot price before 8:00 p.m. ET, or situations where information leakage occurs after 8:00 p.m. ET, could face additional complications from continuous overnight trading. The specific areas to watch are:

• Information leakage. The Overnight Session extends the window during which leaked information can move prices on-exchange before deal teams can react. Under the current framework, leakage after 8:00 p.m. ET has no on-exchange price effect until 4:00 a.m. ET; under the 23/5 framework, it will be reflected immediately. This is a real but narrow risk—most leakage events occur during or shortly after the marketing period, not in the middle of the night.
  
  
• Pricing timing. Deal teams that cannot finalize pricing before 8:00 p.m. ET will now face the choice of pricing into an active overnight market or waiting until the next trading session—neither of which is ideal. In practice, this is likely to reinforce the existing discipline of pricing in the window after the close of traditional market trading hours and before 8:00 p.m. ET.
  
  
• Transaction documents. Definitions of "business day," "trading day," "market close," and Volume-Weighted Average Price ("VWAP") benchmarks in warrants and other instruments drafted against a 16-hour trading day may no longer work as intended. Timing provisions in underwriting agreements, wall-crossing scripts and confidentiality agreements should be reviewed, though the definitions related to traditional market trading hours will continue to control for most standard-form documents.

The SEC has conditioned its approval of the Overnight Session on the exchanges' adoption of several market-integrity features. These measures include temporary static 20% "Overnight Price Bands" that cap extreme volatility, firm-level controls allowing brokers to block certain client orders overnight, limit order price protection to reject extreme prices and review procedures for clearly erroneous executions. Participants at the recent SEC roundtable noted that they plan to monitor the operation of the Overnight Price Bands to consider making the bands more dynamic and responsive, instead of using static upper and lower price bands set for the entire Overnight Session, which are calculated based on prices of the session prior to the Overnight Session. The exchanges have also developed mandatory regulatory halt rules to ensure companies will have sufficient time for complex corporate actions. This change would result in harmonized corporate action halt rules between Nasdaq and NYSE.

The trend is global. On July 21, 2026, the London Stock Exchange ("LSE") announced LSE 24, a separate overnight venue that will begin with the trading of only exchange-traded products starting in the first half of 2027. This represents a more cautious, phased approach that underscores both the momentum behind near-continuous trading and the regulatory complexity of extending it to individual equities.

Several rules necessary to implement the 23/5 framework remain subject to SEC approval—including, for example, Nasdaq's recently filed proposed rule change to clarify certain fees applicable to the Overnight Session. Market participants should expect further technical and fee-related filings as the December launch date approaches. It is also worth noting what the 23/5 procedural and regulatory infrastructure enables beyond the Overnight Session itself: both NYSE and Nasdaq have been investing heavily in tokenized securities platforms, and the near-continuous trading framework, together with the clearing, settlement and regulatory architecture being built to support it, lay the groundwork for an eventual move to 24/7 trading with near-instant settlement. General counsels would be well served to keep an eye on that longer-term trajectory, even if 24/7 trading of fully tokenized securities using blockchain technology remains some distance away.

The shift to 23/5 trading is evolutionary, not revolutionary, with the two exchanges implementing it differently, and Nasdaq-listed companies having slightly more homework than NYSE-listed ones. Panelists at the SEC roundtable noted that many market participants, particularly in the United States, do not currently trade during extended hours, nor plan to do so.

Issuers cannot opt out of their stock trading during the new 23/5 hours starting December 6, 2026, and should recognize and prepare for the potential benefits and drawbacks. For example, companies that regularly execute overnight corporate actions or rely on the after-hours window for deal execution should review their playbooks regardless of listing venue. For NYSE-listed issuers whose policies are already anchored to Core Session hours, the practical impact is modest. For Nasdaq-listed issuers, the consolidation of three sessions into a single Day Session warrants a review of any policy that references exchange-defined session labels rather than specific clock times.