SEC Implements “Circuit Breaker” to Protect Stocks

The Securities and Exchange Commission (SEC) has implemented so-called “circuit breaker” rules to protect sudden stock price crashes as experienced last month. Under the new rule, the trading of any Standard & Poor’s 500 stock that rises or falls 10 percent or more in a five-minute period, will be halted for five minutes.

The idea is for the trading pause to draw attention to an affected stock, establish a reasonable market price and resume trading “in a fair and orderly fashion,” the SEC said.

Source: Associated Press

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