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SEC Expected to Publish Stock-by-Stock Rule Proposals this Week

In a June 4 statement by SEC spokesman, John Nestor, the Commission staff announced that it expects to present its stock-by-stock circuit breaker rule proposing release to the Commission sometime this week.  The SEC announced on May 18, following the May 6 "Flash Crash," that FINRA and the stock exchanges would be filing proposed rules under which trading could be paused for individual stocks if the price moves 10 percent or more in a five minute period. According to the SEC's announcement, this circuit breaker proposal should reflect "a consensus that was achieved among the exchanges and FINRA after SEC Chairman Mary Schapiro convened a meeting of exchange leaders and FINRA at the SEC," within days after the market dropped significantly and after approximately 30 S&P 500 Index stocks fell at least 10 in a five minute period.

According to Mr. Nestor's statement, upon publishing the rule proposal, the Commission intends to act promptly to finalize and implement the rules. 

"Two weeks ago, in response to the market disruption of May 6, the SEC sought public comment on proposed rules that would require the national securities exchanges and FINRA to pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period. The rules were proposed by the national securities exchanges and FINRA.

"The SEC staff is now reviewing and analyzing the comments that were received over the course of a public comment period that ended yesterday.

"The staff expects to present the proposals to the Commission next week. If approved, the staff anticipates full implementation within a week thereafter."

The full text of John Nestor's statement is available at:  http://www.sec.gov/news/press/2010/2010-97.htm