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FINRA, Nasdaq Propose Permanent Adoption of Pilot Program on Market-Wide Circuit Breakers

FINRA and Nasdaq Stock Market LLC (collectively, "the SROs") published proposed rule changes to adopt their respective pilot programs for market-wide circuit breakers ("MWCB") in NMS Stocks on a permanent basis.

The FINRA filing would adopt certain parts of FINRA Rule 6121.02 ("Trading Halts Due to Extraordinary Market Volatility"), while making other modifications. The Nasdaq proposal would remove certain parts of Equity 4, Rule 4121 ("Trading Halts Due to Extraordinary Market Volatility"), and would add several additional provisions to increase clarity and scope. Among other things, both proposals include requirements that the SROs:

  • participate in all industry-wide tests of MWCB, and that certain members participate in at least one industry-wide MWCB test each year; and
  • have policies and guidelines for when a halt is triggered after a market decline.

Comments must be submitted by May 10, 2022.

Primary Sources

  1. Federal Register: Nasdaq Proposed Rule Change To Make the Market Wide Circuit Breaker Pilot a Permanent Program
  2. Federal Register: FINRA Proposed Rule Change To Adopt on a Permanent Basis the Pilot Program for Market-Wide Circuit Breakers in FINRA Rule 6121.02 (Market-Wide Circuit Breakers in NMS Stocks)

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Tags

Regulated Activities
Trading
Sub-Activity
Regulation NMS, Trading Halt
Regulated Entities
Broker-Dealers
Body of Law
Securities Law
Jurisdiction
US - Federal
Organization
FINRA / MSRB / SEC Exchanges / SIPC / Accountants
Sub-Author
NASDAQ Stock Market, FINRA