By Liz Dunshee

Nasdaq currently expects to begin 23/5 trading on December 6, 2026, subject to industry readiness and completion of related rule changes. The Governance Beat has a useful overview of Nasdaq’s FAQs on global trading hours. This post addresses a narrower question for Nasdaq-listed companies: Will Nasdaq’s expanded rule on trading halts change how companies approve, notice and implement corporate actions?

In short: Mostly no, but be aware of the trading halt when planning any corporate action. Nasdaq will implement a mandatory trading halt for certain corporate actions to preserve a processing window that currently exists while the market is closed. For companies, it is important to know when a trading halt will be triggered, and the rule may prompt minor updates to corporate action checklists.

The halt preserves an overnight processing window

When a company changes core features of a listed security, Nasdaq and other market participants must make synchronized updates to quotes, orders and related instructions. This currently happens overnight – and because the market is closed, it doesn’t interfere with trading.

Under 23/5 trading, Nasdaq’s regular nontrading window will shrink to one hour, from 8:00 to 9:00 pm ET. Amended Rule 4120(a)(15) is designed to preserve a processing window for the securities of Nasdaq-listed companies once the new overnight session eliminates most of the current downtime. The changes will become operative when global trading hours begin, which is currently expected to happen in December.

The amended rule builds on the mandatory trading halt framework that already exists for reverse stock splits – extending it to eight specified categories:

  1. Trading symbol/ticker changes
  2. CUSIP changes
  3. Stock dividends valued at 25% or more of the Nasdaq official closing price on the day immediately preceding the ex-date (whether payable in cash, stock, another security or a combination)
  4. Forward and reverse stock splits
  5. DeSPAC transactions
  6. Spinoffs
  7. Changes to the form, type, class or designation of a listed security
  8. Mergers or other mandatory exchanges

Additionally, a “catch-all” category applies when Nasdaq determines that another corporate action or issuer-related event requires a trading halt to protect investors or maintain fair and orderly markets.

When one of these actions or events occurs, Nasdaq will implement a trading halt after post-market hours end at 8:00 pm ET and before the 9:00 pm ET night session begins. This will happen on the day before the market effective date of the corporate action. Trading will resume at 8:00 am ET on the market effective date. Here are a few other things to know:

  • Marketwide halt: Nasdaq’s rule applies only to Nasdaq-listed securities, but if the primary listing market (including Nasdaq) declares a corporate action-related regulatory halt in a security, all other registered national securities exchanges would be required to halt trading in the security as well.
  • No exceptions: When the action falls into category 1-8 above – which will appear as Rule 4120(a)(15)(A)(1)-(8) when Nasdaq’s rulebook is updated – Nasdaq will not have discretion about whether to declare a trading halt in the affected security. The catch-all in Rule 4120(a)(15)(A)(9) will give Nasdaq discretion to determine whether a halt is necessary or appropriate in other circumstances. However, if the exchange makes that determination, the halt is required.  
  • Timing of halts for reverse stock splits will be conformed to timing for new triggers: For reverse stock split halts, the amendment creates a slight timing change. Trades are halted from 7:50 pm to 9:00 am ET under the current rule, but under the new rule, that will change to match the timing explained above.
  • Other primary listing exchanges will implement substantially identical trading halt rules: Nasdaq said that other primary listing exchanges plan to implement substantially identical trading halt rules to ensure consistent treatment of corporate actions across the market. Right now, Nasdaq is the only primary listing exchange focused on operating companies that has amended its rules to allow for 23/5 trading.

What does not change for companies

Nasdaq’s amended rule on trading halts does not change board or shareholder approval standards or replace Nasdaq’s existing notice and public disclosure requirements for listed companies. Those requirements remain action-specific, and Nasdaq’s rule filing implies that existing notifications and public dissemination processes will provide the information it needs to administer the new halts. For example, under Rule 5250 and related guidance:

  • A reverse stock split requires a complete Company Event Notification by noon ET at least 10 calendar days before the anticipated market effective date, plus public disclosure by noon ET at least two business days before that date (with prior notice of the announcement to Nasdaq’s MarketWatch Department).
  • Dividends and distributions generally require notice at least 10 calendar days before the record date.
  • A change to a company’s trading symbol should be submitted at least two business days before the desired change date.

Three narrow updates

Companies should consider adding three items to existing checklists and processes for corporate actions:

  1. Identify the halt treatment early. Determine whether the action falls within one of the eight specified categories. For an action or event that does not fit cleanly in one of these categories but may affect the features of a listed security or orderly trading, raise the issue with Nasdaq early.
  2. Map the full timeline. Because implementing a corporate action can be technical and date-sensitive, transaction teams should work with the company’s transfer agent, Nasdaq and other applicable intermediaries to confirm applicable dates and times before finalizing a timetable – especially when dates for approvals, notifications, disclosures, rights determinations, charter filings, closing and market effectiveness do not all coincide. Put the legal effective time, closing mechanics, Nasdaq notice and disclosure deadlines, and the market effective date and time on one timeline. When a corporate action occurs, do not assume the security can trade when Nasdaq’s broader market opens at 9:00 pm ET or when pre-market trading would otherwise begin at 4:00 am ET.
  3. Respond to questions as needed. While Nasdaq’s amendment to Rule 4120 does not create new disclosure requirements, a visible overnight halt may lead to questions, especially if some investors are unfamiliar with the new processes around 23/5 trading. Companies should be prepared to respond to questions as needed.

The practical takeaway: Nasdaq’s amendment to Rule 4120(a)(15) preserves market processing time for corporate actions that affect core securities features. Companies may need to make incremental updates to checklists and communications plans. For questions about a planned corporate action, capital raise, securities regulations or listing compliance, contact Cooley’s capital markets team or visit the Cooley capital markets practice page.

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