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Wednesday, June 6, 2012

Equity Regulatory Alert #2012 - 6
Market-Wide Circuit Breaker Changes Approved by the SEC, Effective February 4, 2013

Markets Impacted:

Contact Information:

What you need to know:

  • The Securities and Exchange Commission (SEC) has approved, on a pilot basis, the proposed changes to the Market-Wide Circuit Breakers.
  • All trades occurring on NASDAQ, BX, PSX, NOM, PHLX and BX Options will be impacted by this change.

What has the SEC approved?

On May 31, 2012, the SEC approved, on a one year pilot basis, the national securities exchanges' and FINRA's proposal to revise the existing market-wide circuit breakers designed to address extraordinary volatility across the securities markets. The result will be a reduction in the market decline percentages, a shortened duration of the halts and a replacement of the existing DJIA with the broader S&P 500 Index as the pricing reference to measure the market declines.

Additional details will be communicated soon.

What are the new circuit breakers levels and durations?

Trigger Value Time (ET) Action
Level 1
7%(S&P 500)		 9:30 a.m. - 3:25 p.m Halt 15 mins
Level 2
13% (S&P 500)		 9:30 a.m. - 3:25 p.m. Halt 15 mins
Level 3
20% (S&P 500)		 Any time Halt remainder of Day

Note: At or after 3:25 p.m., Eastern Time (ET), trading shall continue, unless there is a Level 3 halt.

When is the change effective?

This change will be implemented on February 4, 2013, and will continue as a one year pilot until February 4, 2014.

Who should I contact for more information?


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