Baby steps

30 March 2016 By Gina Chon Follow @GinaChon

Clearer rules for trading halts and “dark pool” exchanges are among the Securities and Exchange Commission’s modest reforms. They’re far from the broad changes mulled after charges of rigged markets. But with President Obama’s time short, they’re worthy preludes to larger steps.

This content is for Subscribers only

Context News

U.S. Securities and Exchange Commission Chair Mary Jo White told Bloomberg TV on March 8 that the regulator had made substantial progress toward promoting fairness and stability in the securities markets. White cited greater transparency for private trading venues known as dark pools as one of the agency’s accomplishments. But she said more fundamental changes would take time, and a comprehensive review of markets would continue after her tenure, which will likely come to a close with the end of the Obama administration in January.

Since White’s comments, large asset managers, brokerage firms and other market participants have written to the SEC, urging changes that would address some of the market-volatility issues that arose last year. On Aug. 24, 2015, the Dow Jones industrial average dropped by about 1,100 points within minutes amid worries about the economic slowdown in China.

The market swings tested the pilot “limit up, limit down” rules that halt trading for stocks and exchange-traded funds during big moves. Market participants recommended that the SEC require the exchanges to harmonize their reopening procedures after such a freeze, among other suggestions.

Email a friend

Please complete the form below.

Required fields *