On April 5, 2011, FINRA and national securities exchanges filed a proposed plan with the SEC to establish a new “limit up-limit down” mechanism to address extraordinary market volatility in U.S. equity markets. The proposed mechanism would limit trades in listed equity securities to a price band set at a percentage level above and below the average price of the security over the preceding five-minute period, subject to certain exceptions. If approved, this mechanism would replace the circuit breakers which were put in place in response to market events on May 6, 2010. Comments must be submitted within 21 days from the date of publication in the Federal Register. SEC Release. Proposed Plan.
FINRA
Stock-by-Stock Circuit Breaker Rule Proposals
On May 18, in response to the market disruption of May 6, the national securities exchanges and FINRA proposed rules to pause trading in individual stocks for five minutes if the price moves 10% or more over the preceding five-minute period. Initially, the proposed rules would be in effect on a pilot basis through December 10 and would apply only to securities included in the S&P 500 Index. Comments are requested within 10 days of publication of the proposed rules in the Federal Register. FINRA. NYSE. NASDAQ. NYSE Amex LLC. BATS Exchange, Inc. Chicago Board Options Exchange. Chicago Stock Exchange. EDGA Exchange, Inc. EDGX Exchange. NASDAQ OMX BX, Inc. National Stock Exchange.