Rosenblatt’s Market Structure News Digest
Global Exchanges and Market Centers
Circuit Breaker Rules to Be Unveiled Next Week
—CNBC
Update on circuit breakers. Here's where we stand: 1) The SEC itself will make an announcement on new rules early next week, likely Monday. 2) At the same time, the exchanges will make a regulatory filing that will reflect the changes in their own rulebook. What's happening now: 1) SEC is evaluating proposals that would create new rules on: a) uniform individual stock circuit breakers, b) a global circuit breaker, and c) busting trades.The biggest issues: a) what percentage should the individual stock circuit breakers kick in (some are proposing a 25 percent drop, but it seems it will be close to 10 percent), b) how long do they last (1 minute, 2 minutes?), what is a fair percentage range for busting trades. 2) Exchanges are talking amongst themselves and with the brokerage firms on how these changes will be implemented. Time to implement? Likely 30 to 60 days. Why? This (is) a complicated technology issue.