Unbelievable.May 18 (Bloomberg) -- The Securities and Exchange Commission filed proposed rules under which exchanges would halt trading in individual stocks that swing more than 10 percent.
The circuit breakers, proposed jointly with the Financial Industry Regulatory Authority, would be triggered in all markets by gains or declines over five minutes in Standard & Poor’s 500 Index companies, according to an e-mailed statement. During the pilot program that goes until Dec. 10, the agency will also examine risks to investors created by market orders, and consider steps to deter stub quotes.
Regulators are examining ways to slow down trading during investor panics after the market plunge on May 6 showed how conflicting rules across as many as 50 different U.S. equity venues may worsen selloffs. The SEC and Commodity Futures Trading Commission released a report today that outlines six potential causes of the crash, which sent the Dow Jones Industrial Average down almost 1,000 points and erased about $1 trillion in value before losses were pared.
“We continue to believe that the market disruption of May 6 was exacerbated by disparate trading rules and conventions across the exchanges,” said SEC Chairman Mary Schapiro in a statement. “As such, I believe it is important that all the exchanges quickly reached consensus on a set of uniform circuit breakers that would be triggered when needed.”
This is the beginning of the end of Mr "Free Market".
Even the Germans are hopping on to the 'Ve must be bannink all off der shortzers' bandvagon.
So, how are penny stocks going to survive if swings of + or - 10% are jumped on? Those sort of swings can happen many multiple times during any trading day at present. If penny stock traders are going to be continually "banned" from making a trade, they will soon give up even bothering and those stocks will die a slow death anyway?
Glad I have retired to a cash management account for now.
Good luck, punters.....