WASHINGTON: US regulators huddled for an emergency meeting with stock market bosses on Monday, thrashing out new rules to stop a repeat of last week's stock market free-fall.
Days after markets were badly shaken by a near 1000-point drop on the Dow Jones Industrial Average, the Securities and Exchange Commission said additional "circuit breakers" were being considered.
SEC chairwoman Mary Schapiro described meetings with the leaders of six exchanges, including the New York Stock Exchange (NYSE) and the tech-studded Nasdaq as "constructive."
Despite markets recovering much of the loss, the sell-off sent a wave of panic across global stock markets and left President Barack Obama vowing an investigation into the "unusual market activity."
It took just minutes to notch losses worth billions of dollars.
Although markets had been roiled by fears that Greece's debt crisis would spread to other eurozone countries and derail the global economic recovery, other factors are thought to have played a role.
The speed of Thursday's slide suggested that a mistaken trade or computer error could be involved, observers said.
The SEC meeting was held "to discuss the causes of Thursday's market events, the potential contributing factors, and possible market reforms," the commission said in a brief, written statement.
"As a first step, the parties agreed on a structural framework, to be refined over the next day, for strengthening circuit breakers and handling erroneous trades."
The NYSE had slowed down trade on Thursday in an effort to halt the decline, but it proved futile as traders simply moved onto electronic platforms without so-called "speed bumps" and continued the sell-off.
In a rare move, the NYSE and the Nasdaq were forced to cancel trades executed between 2:40 and 3:00 pm that were off more than 60 percent from the price at the start of that period.
Meanwhile lawmakers have also called on stock exchange chiefs to explain the drop when they appear before a House of Representatives financial services panel on Tuesday.
Schapiro is expected to be among those who appear before a House of Representatives Financial Services subcommittee to discuss the stunning dive.
Democratic Senator Chuck Schumer of New York has written to the top US equities, options and futures exchanges urging them to adopt uniform circuit-breakers to slow vast, speedy sell-offs like last week's plunge.
"Coordination and consistent safeguards between trading venues - and across markets - is essential," the lawmaker said.
Schumer's letter went to the top executives of the NYSE, NASDAQ, Direct Edge, BATS Exchange, International Securities Exchange, Chicago Mercantile Exchange and Chicago Board Options Exchange, as well as Schapiro.
The senator also called for regulators to develop a new market-surveillance system to track volatile trading. - AFP/de
Days after markets were badly shaken by a near 1000-point drop on the Dow Jones Industrial Average, the Securities and Exchange Commission said additional "circuit breakers" were being considered.
SEC chairwoman Mary Schapiro described meetings with the leaders of six exchanges, including the New York Stock Exchange (NYSE) and the tech-studded Nasdaq as "constructive."
Despite markets recovering much of the loss, the sell-off sent a wave of panic across global stock markets and left President Barack Obama vowing an investigation into the "unusual market activity."
It took just minutes to notch losses worth billions of dollars.
Although markets had been roiled by fears that Greece's debt crisis would spread to other eurozone countries and derail the global economic recovery, other factors are thought to have played a role.
The speed of Thursday's slide suggested that a mistaken trade or computer error could be involved, observers said.
The SEC meeting was held "to discuss the causes of Thursday's market events, the potential contributing factors, and possible market reforms," the commission said in a brief, written statement.
"As a first step, the parties agreed on a structural framework, to be refined over the next day, for strengthening circuit breakers and handling erroneous trades."
The NYSE had slowed down trade on Thursday in an effort to halt the decline, but it proved futile as traders simply moved onto electronic platforms without so-called "speed bumps" and continued the sell-off.
In a rare move, the NYSE and the Nasdaq were forced to cancel trades executed between 2:40 and 3:00 pm that were off more than 60 percent from the price at the start of that period.
Meanwhile lawmakers have also called on stock exchange chiefs to explain the drop when they appear before a House of Representatives financial services panel on Tuesday.
Schapiro is expected to be among those who appear before a House of Representatives Financial Services subcommittee to discuss the stunning dive.
Democratic Senator Chuck Schumer of New York has written to the top US equities, options and futures exchanges urging them to adopt uniform circuit-breakers to slow vast, speedy sell-offs like last week's plunge.
"Coordination and consistent safeguards between trading venues - and across markets - is essential," the lawmaker said.
Schumer's letter went to the top executives of the NYSE, NASDAQ, Direct Edge, BATS Exchange, International Securities Exchange, Chicago Mercantile Exchange and Chicago Board Options Exchange, as well as Schapiro.
The senator also called for regulators to develop a new market-surveillance system to track volatile trading. - AFP/de
