“These circuit breakers and this more objective guidance on breaking erroneous trades will help our markets retain the confidence of investors and companies,” said SEC Chairman Mary L. Schapiro in a statement. “We have worked quickly with the exchanges to take these steps, and we will continue to be very focused on addressing weaknesses exposed on May 6.”
The SEC is also looking at several other issues:
- Considering whether market makers should be subject to more meaningful obligations to promote fair and orderly markets.
- Working with the exchanges to prohibit the use by market makers of “stub” quotes that are not intended to indicate actual trading interest.
- Studying the effects of multiple trading protocols at the exchanges, including the use of trading pauses and self-help rules.
- Considering recalibrating market-wide circuit breakers currently in place, none of which was triggered on May 6. These circuit breakers apply across all equity trading venues and the futures markets.