Securities Trading Halts

Overview

The SEC or a national securities exchange may halt trading in a particular security or (the SEC may halt trading in securities generally) for a variety of reasons which may be an event specific to an issuer, or a major market event that is forcing prices downward, or it may be because there is simply unexplained volatility, and the regulators hope that a pause in trading will restore calm to the markets.

Under Reg SHO, Rule 201(b), markets are required to have procedures generally intended to stop short selling of a "covered security" where there has been a sharp decline in the price of the relevant security. See also the topic on Short Sales.

In the event of any trading halt or short sale halt, broker-dealers are required to stop trading or short selling, as the case may be.

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Partner
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Senior Attorney

Find

 
Find: 

SEA Sections

SEA Rules

FINRA Rules

  • FINRA Rule 5260 (Prohibition on trading quoting, or indicating interest during trading halt)
  • FINRA Rule 6120 (Trading halts)
  • FINRA Rule 6121 (trading halts due to extraordinary market volatility -- permitting FINRA to halt trading where a primary listing market has issued a trading pause)
  • FINRA Rule 6184 (Trading in Exchange-traded managed fund shares)
  • FINRA Rule 6190 (Compliance with NMS Plan to address extraordinary market volatility) 
  • FINRA Rule 6440 (Trading and quotation halt in OTC equity securities)

NYSE Rules (External Links)

  • NYSE Rule 80B (Trading halts due to extraordinary market volatility)
  • NYSE Rule 80C (Limit-Up, Limit Down Plan and trading pauses in individual securities due to extraordinary market volatility)
 

Know

 
Know: 

Broker-Dealer Guide