Issue link: https://www.epageflip.net/i/10332
Tuesday, May 11, 2010 – Daily News – 5B SEC: Exchanges agree in principle to new rules NEW YORK (AP) — The major securities exchanges put aside some of their differences Monday and agreed to coordinate trading rules to prevent stock plunges like last week’s historic dive. The Securities and Exchange Commission said the six exchanges agreed in principle during a meeting with regulators to a uniform system of ‘‘circuit breakers.’’ Those are restrictions that would curb trading when the price of a stock or other security rises or falls to a specified level in the course of a trading day. Four days after the plunge that sent the Dow Jones industrials down to a loss of nearly 1,000 points in less than 30 minutes, regulators were still saying pub- licly that they did not know the exact reason for the drop. But there was a growing belief that the varying trading rules on different exchanges contributed to the intensity of the selling and the size of the market’s slide. People familiar with the situa- tion said regulators believe the disruption was caused by the way different exchanges manage their trades and rapid price swings. A definitive answer could take weeks because regulators are going through information from across the market by hand, said the people, who spoke on condi- tion of anonymity because they were not authorized to discuss the investigation. The SEC said in a statement that the exchanges, including the New York Stock Exchange and Nasdaq, ‘‘agreed on a structural framework, to be refined over the next day’’ that would more close- ly align trading rules. In an effort to calm the market swings Thursday, the NYSE implemented restrictions to slow trading. But many analysts believe the NYSE’s action result- ed in orders to sell being sent automatically to other electronic exchanges that had no trading restrictions. Selling continued at a furious pace. The NYSE, Nasdaq and other exchanges already have market- wide circuit breakers. The agree- ment in principle reached Mon- day includes three goals to strengthen trading restrictions, said a person familiar with the sit- uation who spoke on condition of anonymity because he was not authorized to discuss the matter. By Tuesday, the person said, the exchanges will submit a joint proposal to: — Update existing market- wide circuit-breakers that halt trading if the Dow drops by a cer- tain percentage. — Create market-wide circuit- breakers for individual stocks. Several big stocks including Proc- ter & Gamble Co. were major contributors to Thursday’s plunge. — Establish clear rules for which trades should be canceled in cases of extreme volatility. After Thursday’s chaos, the exchanges agreed to cancel trades that were called erroneous. Those were trades made during a 20- minute window and whose stock prices had fallen 60 percent or more. Treasury Secretary Timothy Geithner and other regulators met with the heads of major exchanges Monday. Besides the NYSE and Nasdaq, the exchanges also included BATS Global Markets, DirectEdge, International Securities Exchange and Chicago Board Options Exchange. Officials from CME Group Inc., which operates the nation’s biggest commodities markets, and IntercontinentalEx- change also met with regulators. Regulators and exchanges have been examining data from millions of trades trying to deter- mine what caused Thursday’s computerized sell-off. The Dow later recovered to close the ses- sion down 342 points. The SEC is leading the investi- gation with the Commodity Futures Trading Commission. Those agencies are ultimately responsible for overseeing mar- kets, but they rely heavily on exchanges to write and enforce their own rules. Investors learned from Thurs- day’s plunge that the stock market isn’t a monolith. Instead, it is a collection of about 50 competing exchanges and trading networks that work under different rules. As the decades have gone by, computers programmed to buy or sell stock have taken on a greater share of trading. The NYSE for much of its history relied heavily on specialists, people who brought buyers and sellers togeth- er. If no buyers could be found, the specialists bought the stock themselves. This helped investors get the price they wanted, and also helped trading to flow. With the growth of computers and the high-speed trading they offered, the NYSE has had increasing competition. Nasdaq is the most prominent rival. In recent years, the competition has also come from electronic com- munications networks, or ECNs, trading networks that automati- cally match buy and sell orders at specified prices, without an exchange acting as a middleman. When the NYSE bought its own ECN, Archipelago, in 2006, it began moving away from spe- cialists. The NYSE floor, which had 2,700 to 3,000 people includ- ing specialists and traders 10 to 15 years ago, now has 1,500. There- fore there were fewer people to step in and try to stop Thursday’s plunge. Computers using complex mathematical formulas are able to trade millions of shares in mil- liseconds. That is what happened on Thursday. This kind of trading is known as high-frequency trad- ing, which accounts for two- thirds of all stock trading in the U.S. Proponents say it makes the stock market run more smoothly by efficiently connecting buyers and sellers. Lawmakers are calling for uni- formity among the rules being discussed Monday. ‘‘It appears that our fragment- ed market structure may very well have contributed to the difficulties we experienced last Thursday,’’ said Sen. Charles Schumer, D- N.Y., a member of the Senate Banking Committee. ‘‘Coordina- tion and consistent safeguards between trading venues — and across markets — is essential.’’ Schumer made his comments in letters to SEC Chairwoman Mary Schapiro, CFTC Chairman Gary Gensler and the heads of the major stocks and futures exchanges. He also asked the SEC to implement a new central- ized market surveillance system to watch for trading problems in all securities markets. The House Financial Services Subcommittee on Capital Mar- kets, Insurance, and Government Sponsored Enterprises will hold a hearing Tuesday on the market’s drop. Schapiro and Gensler will appear together at the hearing, as will key executives from the NYSE, Nasdaq and CME. Legal Notices Legal Notices LEGAL NOTICE The following person(s) is (are) doing business as: High TImes Whee 2010 527-5556, 14400 Hy 36W, Cottonwood, CA 96022 File No. 20100001134 STATEMENT FICTITIOUS BUSINESS NAME Donna Will 14400 Hy 36w Cottonwood, CA 96022 The registrant commenced to transact business under the fic- titious business name or names listed above on N/A This business is conducted by: a corporation S/By: Donna Will Donna Will This statement was filed with the County Clerk of Tehama County on 4/27/2010 Publish: May 4, 11, 18 & 25, 2010 Tehama County’s Personal/Professional Service Directory Attorney Local Bankruptcy Attorney Jocelyn C. Olander 530-824-0288 Free Consultation Payment Plans Available Web: www.jcoattyatlaw.com email: mail@jcoatty atlaw.com A federally qualified Debt Relief Agency under 11 U.S.C. 101(12(A)) Bankruptcy BANKRUPTCY Free information $50/mo. + court fee MICHAEL O. HAYS Attorney at Law 1-800-387-9299 AT YOUR SERVICE! Clock Repair 530-736-7079 Grandpa’s Clocks Jim Paul 20910 Pebblestone Dr. Red Bluff Shelf & 31 Day Clocks Repaired Call for appt. Member NAWCC Cuckoo Clocks, Anniversary, Wall, Clock Repair James W. Tysinger, Jr. M.D. Eye Physician & Surgeon Fellow American Academy of Ophtalmology We accept Medical, Medicare & most Insurances Office Hours: Mon-Thurs 8am-4:30pm Fri & Sat 8am-12 noon For Emergencies, After Hours, Week-ends, Call 530-567-5001 345 Hickory St. Red Bluff Tel: (530) 529-4733 Fax: (530) 529-1114 Orthotic Therapy is our Specialty, also treating all aspects of the feet including Bunions, Hammertoes and Plantar Fasciitis with conservative and surgical intervention. We offer comprehensive skin care products from; FOOT AND ANKLE SPECIALIST 2530 Sr Mary Columba Dr Red Bluff (530) 527-7584 $9900 Runs every Tuesday - Thursday - Saturday Eye Physician Financial Services Embroidery BEVERLY ROSS Tehama County Clerk & Recorder 3 month commitment Feet Health CREAMS, SALTS, MOISTURIZERS, GIFT SETS www.aerosilknatural.com SPA SKIN CARE PRODUCTS ALL NATURAL INGREDIENTS