SEC approves circuit-breaker rules for US stocks trading

WASHINGTON: The US markets regulator, the Securities and Exchange Commission, said Thursday it had approved new circuit-breaker rules on stocks trading in response to last month's "flash crash.".

The new rules will require the stock exchanges and the Financial Industry Regulatory Authority to pause trading in certain individual stocks for five minutes if the price moves 10 percent or more in a five-minute period, the SEC said in a statement.

The new measures "come in response to the market disruption of May 6," it said, noting they were proposed by the securities exchanges and FINRA.

The SEC said it expects the exchanges and FINRA to begin implementing the new rules as early as Friday on a trial basis through December 10.

"The May 6 market disruption illustrated a sudden, but temporary, breakdown in the market's price-setting function when a number of stocks and ETFs (exchange-traded funds) were executed at clearly irrational prices," Mary Schapiro, SEC chair, said in the statement.