SEC 'flash-crash' rules vote in a month: official

[admin]

SEC 'flash-crash' rules vote in a month: official
from MarketWatch.com - MarketPulse
WASHINGTON (MarketWatch) - A top Securities and Exchange Commission official on Friday said the agency expects to vote in a "month or so" on whether to approve proposals in the wake of the flash-crash of May 6, 2010. "We should be in a position to make a recommendation in a month or so," David Shillman, associate director in the SEC's Division of Market Regulation, told the annual "SEC Speaks" conference. He said the agency will decide whether to approve a "limit up and limit down" mechanism that would require that trades in all listed stocks be executed within a range tied to the recent prices for that security. It would impose a five-minute pause if trading is unable to occur within the price band for more than 15 seconds. Shillman added that he believes the agency will simultaneously vote on whether to approve a market-wide circuit breaker system that would, for example, close the markets for 15 minutes in the event of a 7% drop in the S&P 500. This approach would replace an existing rule that has only been triggered once before in the late 1990s, he said. The proposals come in the wake of the Dow Jones Industrial Average's sudden drop of nearly 1,000 points on May 6, 2010 before swiftly recovering to end at a 348-point loss.