Rules governing the obligations of market makers on U.S. equity exchanges and how stock quotes are handled are among issues likely to be reviewed in a hearing today before the House Committee on Financial Services.
Regulators should guard against a repeat of the May 6 selloff in U.S. stocks by imposing limits on how far shares can fall instead of halting trading, investors and a former Securities and Exchange Commission economist said.
NYSE Euronext, owner of the largest U.S. equities exchange, is considering ways to improve its plan for dealing with disasters and said exchanges should consider mandatory testing after Hurricane Sandy caused the longest weather shutdown since 1888.
Exchange operator NYSE Euronext and brokers Cowen Group Inc. and Knight Capital Group Inc. told a congressional panel they support a pilot program to increase the minimum-price increment for smaller, less-active stocks as a way of spurring trading.
U.S. exchanges and some brokers will be required for the first time to conduct coordinated trading tests to show they can recover from natural disasters or terrorist acts, according to a rule proposed by regulators.