SEC Regulator Opposes Trading-Halt Plan

The Securities and Exchange Commission’s top market regulator criticized a proposal by the U.S. securities markets to close trading for the day after a stock plunge, saying investors should have at least an hour to trade at the end of each day. “We want an orderly market close so investors can know the value of their final positions for the day rather than have uncertainty attached to it,” SEC market regulation director Richard Lindsey said. The SEC official faulted an agreement among 11 stock, commodities and futures markets on circuit breakers that halt trading during steep declines. The proposal, which requires SEC approval, would close markets for the rest of the day if the Dow Jones industrial average falls 10% after 11:30 a.m. PST or 20% at any time. The SEC staff objection suggests that the boards that run the NYSE and other markets will have to modify the proposals before they win the approval. There are several ways to guarantee a final hour of trading, Lindsey said. Markets could stay open after 12 p.m. PST even if circuit breakers are tripped during that period. Markets also could extend normal trading hours or shorten any late-afternoon trading halts, Lindsey said. He declined to express a preference for any specific plan.