A three-year effort to fine-tune curbs on volatility for individual stocks entered a new phase yesterday in the U.S. (more)
A three-year effort to fine-tune curbs on volatility for individual stocks entered a new phase yesterday in the U.S.
Trying to reduce market disruptions, regulators are instituting a plan that creates price bands in which shares are allowed to trade on American equity exchanges, replacing the old system of immediate pauses when shares swing rapidly. New restraints to halt all U.S. stock, options and index futures when the Standard & Poor's 500 Index (SPX) plunges will also take effect. Both will operate as one-year pilot programs.
Regulators and exchanges are altering the speed bumps adopted after the May 2010 flash crash to boost confidence in a market that has become faster and more complex over the last decade. The new system, known as limit-up/limit-down, replaces automatic halts.
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