U.S. stock exchanges would briefly halt trading of some stocks that have big prices swings under new trading rules proposed Tuesday that are aimed at avoiding market plunges like the one that stunned Wall Street earlier this month.
Regulators say it makes sense to reach for remedies now, even though they have yet to determine the exact cause of the May 6 market dive.
The rules would take effect in mid-June under a six-month pilot program agreed to by major U.S. exchanges and the Securities and Exchange Commission. The SEC announced them Tuesday and put them forward for public comment.
Under the plan, trading of any Standard & Poor's 500 stock that rises or falls 10 percent or more within a five-minute span would be halted for five minutes. These rules, known as "circuit breakers," would be applied if the price swing occurs between 9:45 a.m. and 3:35 p.m. Eastern time. That's almost the entire trading day.
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