More Stocks Subject to SEC ‘Circuit-Breaker Rule’

Posted on Sep 12, 2010

Wikimedia Commons / AgnosticPreachersKid

The Securities and Exchange Commission headquarters in Washington, D.C.

Remember that crazy time back in May when the Dow Jones unexpectedly dropped by almost 1,000 points in only half an hour? Well, the SEC has finally worked in some protection against such sudden plunges by expanding the number of stocks subject to its current “circuit-breaker rule.”

The SEC has been running pilot tests since June that aim to halt trading of stocks that experience severe and unexpected price movement. —JCL

The Epoch Times:

The U.S. Securities and Exchange Commission has expanded the number of stocks subject to its circuit breakers rule, which would immediately stop volatile and inconsistent trading on a particular stock.

The measure will help prevent sudden stock market plunges caused by unusual trading activity in response to the flash crash on May 6, when the Dow Jones Industrial Average dropped almost 1,000 points within 30 minutes.

The brief crash was unusual and unsettling, especially since no adverse economic news triggered the fall.

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