Stock fall may see new curbs
By Jonathan Spicer and Rachelle Younglai |
May 10, 2010, Monday
|
Print Edition
Print Edition
UNITED States securities regulators are considering new curbs to slow stock trades when markets are plunging following last Thursday's dramatic sell-off, according to two people familiar with the matter.
Securities and Exchange Commission officials are considering whether trading restrictions should be imposed across markets for companies that have fallen a certain percentage within a specific time-frame, one source said on Saturday.
Another source said more circuit breakers at a stock level are among many items being discussed and expected to evolve this week, adding "logistics are tough."
The sources requested anonymity because the investigation is ongoing.
The SEC could not immediately be reached for comment.
The SEC and the Commodity Futures Trading Commission are still trying to determine the causes for the massive stock market meltdown fueled by computerized trades that caused a nearly 1,000-point plunge in the Dow Jones industrial average.
Although the regulators have been working around the clock at initial data since last Thursday to find the causes, they have yet to notify exchanges of an "official inquiry" into the sell-off, a third source familiar with the review told Reuters. That step would trigger the release of more information to regulators.
When that data come, the investigation will likely focus on who quoted the "bids" and "offers" throughout the market dive, the bid-ask spreads, trading volumes, and a full list of the canceled trades, the source said.
The third source added regulators conducting the probe "are being diligent" but said they were calm about it despite ongoing jitters on Wall Street.
The source said regulators had moved away from a theory that the stock plunge was called by a trading mistake, or a so-called "fat finger" episode in keyboard data entry.
Regulators are looking at links between futures and cash markets for stocks.
At one point last Thursday, at least a half-dozen stocks, including Accenture and Exelon Corp briefly traded for as low as a penny a share.
Securities and Exchange Commission officials are considering whether trading restrictions should be imposed across markets for companies that have fallen a certain percentage within a specific time-frame, one source said on Saturday.
Another source said more circuit breakers at a stock level are among many items being discussed and expected to evolve this week, adding "logistics are tough."
The sources requested anonymity because the investigation is ongoing.
The SEC could not immediately be reached for comment.
The SEC and the Commodity Futures Trading Commission are still trying to determine the causes for the massive stock market meltdown fueled by computerized trades that caused a nearly 1,000-point plunge in the Dow Jones industrial average.
Although the regulators have been working around the clock at initial data since last Thursday to find the causes, they have yet to notify exchanges of an "official inquiry" into the sell-off, a third source familiar with the review told Reuters. That step would trigger the release of more information to regulators.
When that data come, the investigation will likely focus on who quoted the "bids" and "offers" throughout the market dive, the bid-ask spreads, trading volumes, and a full list of the canceled trades, the source said.
The third source added regulators conducting the probe "are being diligent" but said they were calm about it despite ongoing jitters on Wall Street.
The source said regulators had moved away from a theory that the stock plunge was called by a trading mistake, or a so-called "fat finger" episode in keyboard data entry.
Regulators are looking at links between futures and cash markets for stocks.
At one point last Thursday, at least a half-dozen stocks, including Accenture and Exelon Corp briefly traded for as low as a penny a share.
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