Business

SEC unveils trading rules shakeup

Wall Street sign
Image caption The SEC move comes after the 6 May crash

The largest US shares face new trading restrictions after regulators have come up with a plan to avoid a repeat of the plunge in values on 6 May.

Then, the market fall quickly spread out of control, and now the Securities and Exchange Commission (SEC) has proposed so-called "circuit breakers".

These would halt trading in a stock for five minutes, if it fell more than 10% in five minutes.

The new rules apply to all stocks in the Standard & Poor's 500 index.

SEC chairman Mary Schapiro said the plan will prevent volatility.

The circuit breakers "would also increase market transparency, bolster investor protection and bring uniformity to decisions regarding trading halts in individual securities".

The SEC still has to formally approve the proposals and has not given a timetable for adoption.

It comes after the unexpected crash on 6 May that drove the Dow Jones down some 700 points within minutes.

An investigation into the mysterious plunge found no single cause was to blame.

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