Exchanges Propose U.S. Ban on Stub Quotes Blamed for May Crash
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NYSE Euronext, Nasdaq OMX Group Inc. and Bats Global Markets sought permission from regulators yesterday to eliminate stub quotes, or bids and offers as low as pennies or as high as thousands of dollars provided by market makers that were blamed for worsening the May 6 crash.
The owners of the biggest U.S. equity markets asked the Securities and Exchange Commission to impose restrictions on how far from the national best bid or offer, or NBBO, market makers can submit quotes. The requirements are aimed at preventing circuit breakers that pause trading for Standard & Poor’s 500 Index and Russell 1000 Index companies from being triggered.