SEC Loosens Triggers for Trading Halts

The Securities and Exchange Commission, as expected, approved a plan to loosen circuit breakers that automatically halt trading when the stock market falls sharply. Under the new rules, the New York Stock Exchange and other markets will shut down for an hour if the Dow Jones industrial average falls more than 550 points, up from the current 400-point level. The rules increase the trigger for a half-hour market shutdown to a 350-point fall in the Dow from 250 points now. The Dow has quadrupled since the circuit breakers were set up after the October 1987 stock market crash, making the current levels unrealistic, SEC Chairman Arthur Levitt said. The new triggers require halts at 5.1% and 8.1% of the index, compared with 3.7% and 5.9% now. The SEC said it will review the new levels in a year.