FINRA Rule 2265

Key requirements:

• A firm must disclose risks to customers before permitting them to trade securities outside regular market hours. The disclosure may be provided in paper or electronic form and must explain the risks of extended-hours trading.
• Extended-hours trading risks that can make trades harder to execute or result in less favorable prices include:
  • lower liquidity;
  • higher volatility;
  • changing prices;
  • wider bid-ask spreads;
  • unlinked or fragmented markets; and
  • the impact of after-hours news announcements on security prices.
• Website disclosure requirements apply to firms that allow customers to open online accounts for extended-hours trading or to trade during extended hours online. The risk disclosure must be posted prominently on the firm’s website.
• Customer risk awareness measures help ensure that customers understand the unique risks associated with trading outside normal market hours.