New York/Washington : US securities regulators are considering new curbs to slow stock trades when markets are plunging following Thursday's dramatic sell-off, two people familiar with the matter said on Saturday.
Securities and Exchange Commission officials are considering whether trading restrictions should be imposed across markets for companies that have fallen a certain percentage within a specific time-frame, one source said. Another said more circuit breakers at a stock level are among many items being discussed and expected to evolve this week, adding "logistics are tough".
The sources requested anonymity because the investigation is ongoing.
The SEC could not immediately be reached for comment.
The SEC and the Commodity Futures Trading Commission are still trying to determine the causes for the massive stock market meltdown fuelled by computerised trades that caused a nearly 1,000-point plunge in the Dow Jones industrial average.
Although the regulators have been working around the clock at initial data since Thursday to find the causes, they have yet to notify exchanges of an "official inquiry" into the sell-off, a third source familiar with the review told Reuters. That step would trigger the release of more information to regulators. When that data comes, the investigation will likely focus on who quoted the "bids" and "offers" throughout the market dive, the bid-ask spreads, trading volumes, and a full list of the cancelled trades, the source said.
‘Diligent probe'
The third source added regulators conducting the probe "are being diligent" but said they were calm about it despite ongoing jitters on Wall Street.
The source said regulators had moved away from a theory that the stock plunge was called by a trading mistake, or a so-called "fat finger" episode in keyboard data entry.
Regulators are looking at links between futures and cash markets for stocks.
At one point on Thursday, at least a half-dozen stocks, including Accenture and Exelon Corp briefly traded for as low as a penny a share.
