Newspaper article THE JOURNAL RECORD

NYSE Offers Modest Changes for Market Circuit Breakers "The Change Is Designed to Create More Opportunities for Investors to Trade at the End of the Day"

Newspaper article THE JOURNAL RECORD

NYSE Offers Modest Changes for Market Circuit Breakers "The Change Is Designed to Create More Opportunities for Investors to Trade at the End of the Day"

Article excerpt

NEW YORK -- The New York Stock Exchange proposed modest changes Thursday to rules that halt trading when prices plunge, and delayed a more aggressive plan that would make the curbs harder to activate.

The proposal would keep the triggers for the trading curbs at drops of 350 points and 550 points in the Dow Jones industrial average, but it would make it more difficult for the circuit- breakers to prematurely end the trading day.

The change, which requires approval from the Securities and Exchange Commission, would loosen the circuit-breaker rules after 2 p.m. It would also make it more difficult to bring a premature end to the trading day, as was the case Oct. 27 when the Dow fell 554 points, or 7.2 percent. The NYSE is still studying more intense changes that would raise the threshold for triggering trading halts to a 10 percent drop in the Dow for the first suspension of trading and 20 percent for the second. At current market levels, that would be about 800 points and 1,600 points. "Those are very significant changes and we have tremendous work to do before we make them," NYSE chairman William Grasso said. "That 20 percent is very, very dramatic and we don't want to add it without hearing the views of individual investors and the institutional community." NYSE spokesman Robert T. Zito said the exchange hopes to make a recommendation on that plan by the first quarter of 1998. He said there is a broad consensus to raise the triggers to higher levels, but the exact percentage and other details still need to be worked out. Currently, trading is suspended for half hour if the Dow drops 350 points and for one hour if the index loses 550 points. Under those rules, the market would close for the day if the 350 level is reached at 3:30 p.m. or if the 500 level is hit at 3 p.m. The changes approved Thursday by the NYSE board would impose a half-hour trading halt if the 550 trigger is reached after 2 p. …

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