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August 11, 2016 at 10:08 AM
The major operators of U.S. stock exchanges agreed on a set of rule changes to make their markets more resilient, an attempt to prevent a repeat of a wild trading session in August 2015.
NYSE Group Inc., Nasdaq Inc. and Bats Global Markets Inc. want to address four goals, according to a statement from the companies Thursday, with an emphasis on reducing and improving procedures around trading halts.
The alterations come after firms including BlackRock Inc. blamed the mayhem on Aug. 24, 2015, in part on the exchanges’ failure to coordinate their trading rules. Hundreds of securities had wild price swings that day.
“Exchanges should compete where it matters and harmonize where it doesn’t,” Bryan Harkins, head of U.S. markets at Bats, said in a phone interview. “This is unprecedented collaboration in my mind. It’s much needed, and at the industry’s request.”
The changes come after months of industry discussion on the appropriate way to stave off a similarly wobbly trading session. Last year’s Aug. 24 rout included brief plunges of 21 percent in JPMorgan Chase & Co. and General Electric Co.’s share prices. The swoon illustrated the need to adjust safeguards, put in place after a market crash in May 2010, that are meant prevent sudden erratic lurches.
