Under U.S. regulator of the Securities and Exchange Commission plans, stock trades will be limited to a group on each side of the average price of the share during the last five minutes.
Bush hopes that it will be a more sophisticated tool that the current so-called "circuit breakers". These automatically stop operations a hand for five minutes if it moves more than 10pc in five minutes and were laid shortly after the fall of last May.
May 6 event was triggered after a typical decline of an index of future shares of unexpectedly a wave of sales of computerized business models which, in turn, led a race for the output of other investors. In all, $862bn (£ 527bn) was wiped off the value of the US stock markets.
"These rules, good or bad, will bring the confidence of investors to the market," said Larry Peruzzi, a trade of fairness to Cabrera Capital Markets.
The new rules will also see a share suspended for five minutes, if it cannot trade within the price band designated for more than 15 seconds. The SEC said that the group will be expanded in the minutes immediately after the market opens and the closing minutes each day.
"Upgrade of our commercial parameters will help our markets retain the confidence of investors and businesses," said Mary Schapiro, the sec Chairman. "We were focused on the improvement of the structure of our markets before weaknesses were exposed on 6 may, and we will continue to focus on the structure of the market in the future."
The new rules apply to trading on NYSE Euronext, Nasdaq and bats global markets, commercial exchange.
The SEC is having to walk the tightrope between the protection of investors in unnecessary volatility and ensure that there is sufficient liquidity to operate the stock markets of the country.
In the five months after the crash, the most important withdrawal since the financial crisis, investors withdrew about $61bn of mutual funds.
View the original article here
This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.
No comments:
Post a Comment