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New circuit breakers seen
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November 24, 1997: 8:35 a.m. ET
Big Board may alter trading halt rules to 10 and 20 percent basis, report says
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NEW YORK (CNNfn) - The New York Stock Exchange is reportedly proposing to change its so-called "circuit breaker" rules to halt trading in the event of another stock market crash.
The proposals followed the market's 554.26-point meltdown on Oct. 27 -- the first time that the trading halts have kicked in since their adoption after 1987's "Black Monday" crash.
Many investors criticized the circuit breakers for kicking in too soon. Yet, some contended that the Dow's drop would have been larger without the halts.
At a meeting on Friday, exchange and regulatory officials discussed converting the circuit-breaker system into a percentage basis and increasing the trigger levels to 10 and 20 percent, The Wall Street Journal reported on Monday, citing people familiar with the situation.
Currently, trading halts are activated when the Dow Jones industrial average drops 350 points and 550 points. Based on the present level of the market, the proposed triggers represent drops of 788 and 1,576 points, respectively.
Officials from the Big Board met with their counterparts from the nation's other stocks, futures and options exchanges as well as Securities and Exchange Commission officials.
An NYSE spokesman declined to comment on the article.
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