SEC Seeks Public Comment on Proposed Rules for Clearly Erroneous Trades

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On June 17, the Securities and Exchange Commission announced that the exchanges and the Financial Industry Regulatory Authority filed proposed rules to implement a series of thresholds for breaking erroneous trades. Currently, the exchanges and Electronic Communications Networks all treat clearly erroneous trades differently with respect to thresholds and timing for reporting such trades. The current proposal comes in response to the May 6 market disruption and complements the SEC’s recent approval of stock-by-stock circuit breakers. “Establishing clear and transparent standards for breaking trades helps provide certainty in advance as to which trades will be broken, and allows market participants to better manage their risks,” said SEC Chairman Mary Schapiro.

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Published In: Administrative Agency Updates, Communications & Media Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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