Wednesday, May 19, 2010

Equity Regulatory Alert #2010 - 3
Market-Wide Circuit Breaker Functionality Proposals Filed with the SEC

Markets Impacted:

Contact Information:

What you need to know:

  • U.S. equity exchanges seek to establish market-wide trading pause standards for all securities included in the Standard & Poor’s 500 Index (S&P 500) pending Securities and Exchange Commission (SEC) approval.

What is being implemented by U.S. equity exchanges?

In conjunction with all U.S. equity exchanges, The NASDAQ Stock Market® (NASDAQ®) and NASDAQ OMX BXSM (BXSM) have filed with the SEC a proposed rule change to establish a trading pause for individual stocks in the S&P 500 Index that experience a price change of 10% or more. This rule change will run for a pilot period.

When will the pilot period run?

The pilot period for the market-wide circuit breaker functionality is expected to be fully rolled out by June 14, 2010, pending SEC approval, and will last through December 10, 2010.

How will market-wide circuit breakers work?

If any S&P 500 security experiences a price change of 10% or more during a five-minute period, a five-minute trading pause initiated by the primary listing market for the security will commence and will be followed by all other markets. Affected securities will also be re-opened by the primary listing market.

How will NASDAQ resume trading in a NASDAQ-listed stock that is halted by the market-wide circuit breaker?

If a halt is triggered in a NASDAQ-listed security in the S&P 500 Index, NASDAQ will re-open the security using the NASDAQ Halt Cross process set forth in NASDAQ Rule 4753. Upon resumption of trading by NASDAQ and dissemination of a first print, trading may commence on other markets. Refer to NASDAQ Rule 4753 for additional details.

Will NASDAQ and BX recognize trading pauses issued by another primary market?

Yes. In such a situation, NASDAQ and BX will pause trading in that security until trading has resumed on the primary listing market. Refer to the NASDAQ and BX filings for additional details.

Where can I find additional information?

  • Refer to the NASDAQ and BX rule changes:
  • Refer to the Single Stock Trading Pause Frequently Asked Questions on the NASDAQ OMX Trader website.
  • Contact Transaction Services U.S. Market Sales at +1 800 846 0477.


  • Email Alert Subscriptions:
    Nasdaq offers customers the ability to self select news delivery across various Nasdaq markets. Create and maintain a profile for updating alert preferences and contact information. Visit the enrollment form on the Nasdaq Trader website and sign up today! Please note that if you choose to unsubscribe from an email list, you may no longer receive potentially critical emails from the NASDAQ Stock Market regarding Nasdaq's trading and data products, regulatory issues or marketplace initiatives.

    Please follow Nasdaq on Facebook RSS and Twitter.

    Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital markets. As the creator of the world's first electronic stock market, its technology powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to approximately 3,900 total listings with a market value of approximately $13 trillion. To learn more, visit: business.nasdaq.com.