Exchanges Revamp U.S. Curbs to Help Prevent Stock Halts
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Concern that halting stocks to limit price volatility does more harm than good spurred the biggest U.S. exchanges to propose modifying the program.
They backed a plan, known as limit-up/limit down, that prevents prices from moving beyond specified bands based on a security’s average level during the previous five minutes. On Feb. 18, advisers to the Securities and Exchange Commission and the Commodity Futures Trading Commission recommended adopting the technique in lieu of immediately halting shares. The SEC announced the joint proposal, which also extends the program to all exchange-listed stocks and funds, in a statement yesterday.