SEC changing rules for when exchanges halt trading

AP

(AP) WASHINGTON - Federal regulators are changing the rules for when a dramatic shift in value of the stock market or individual stocks triggers exchanges to halt trading.

The changes are aimed at curbing wild swings in prices such as occurred in the "flash crash" of May 6, 2010.

The Securities and Exchange Commission approved the changes, which were requested by the U.S. exchanges. The SEC said Friday they will take effect in a one-year pilot program to start by Feb. 4.

Flash crash: Full story finally revealed

One change affects circuit breakers, measures that automatically halt trading if the market falls by certain percentages. Circuit breakers will be triggered by smaller market declines than they are now, but the halts won't last as long.

In addition, rules for individual stocks will bar any trades outside specified price boundaries.

[TJphoto]

Consider this. Not one member of wall street who may or may not be responsible for the economy tanking in 2008-2009 has been charged by the SEC. Almost any member of Congress can call and say "STOP"! Does anyone wonder why interest rates for credit cards are capped at 32%. Congress set them, Figure it out.

[nojoy01]

"In addition, rules for individual stocks will bar any trades outside specified price boundaries."

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1st comment: I think these "rules" will definitely need some explanation/clarification. Does this mean that if a stock you own starts to crash & burn (think Enron) and it hits the bottom "boundary" that you won't be able to try & save some of your money? I can forsee a situation that causes a stock to be suspended from trading only to line up a gazillion sell orders when the stock starts trading again. Also, is there to be an upper "boundary" for trading thus limiting the amount of $$ you can make when a stock climbs?

2nd comment: Gee, who'da thunk it? Price controls on the stock market. What's next in the effort to make a sour economy perform on demand? Firing/layoff freezes? No company can terminate any employee (no matter how much money they are losing) except for violating criminal statutes while in the workplace? Of course this would only apply to companies who are engaging in interstate commerce or have government contracts. And yes, your local "mom & pop" store DOES engage in interstate commerce, unless all of the products they sell are produced locally or in state.