NYSE OKs Loosened Circuit-Breaker Rules

The New York Stock Exchange approved a plan to raise the triggers that halt trading when prices plunge, but backed away from a provision to shut down for the day any time there is a 20% drop. The NYSE would have faced a showdown with the Securities and Exchange Commission, whose approval it needs to implement new circuit-breakers, if it hadn’t retreated from its earlier position. SEC Chairman Arthur Levitt Jr. and other top federal officials opposed closing the markets prematurely, and indicated such a move should happen only in rare and extreme circumstances because of the potential to cause a bigger panic. In an attempt to make the plan more pleasing to regulators, the NYSE and other U.S. exchanges with which it negotiated the details, agreed that trading would halt for the day only if the Dow Jones industrial average drops 20% after 2 p.m. and by 30% at any time. The plan will be submitted to the SEC for its approval and could be implemented within 45 to 60 days.