The SEC announced that the national securities exchanges and FINRA have filed proposals to revise their market-wide circuit breaker programs which pause trading on a market-wide basis when the volatility of a reference index exceeds specified thresholds. (The NYSE proposal is available here.) In simple terms, the proposals would (a) reduce the percentage by which the market must decline to trigger a circuit breaker, (b) shorten the duration of trading halts when a circuit breaker is triggered, (c) reduce the number of relevant trigger time periods, (d) substitute the S&P 500 Index for the Dow Jones Industrial Average as the reference index and (e) recalculate trigger thresholds daily rather than quarterly. The proposals are subject to SEC approval following a public comment period that ends October 25, 2011.
Alert October 04, 2011