[9448]
November 24, 1997
TO: BOARD OF GOVERNORS No. 64-97
ACCOUNTING/TREASURERS COMMITTEE No. 46-97
OPERATIONS COMMITTEE No. 41-97
SEC RULES COMMITTEE No. 117-97
RE: INSTITUTE RECOMMENDATION TO SEC ON CIRCUIT BREAKERS
______________________________________________________________________________
In response to the October 27th market break, the Securities and Exchange Commission
recently announced plans to review the circuit breaker rules. The Institute has sent a letter to
SEC Chairman Arthur Levitt recommending that the circuit breakers not be triggered if the
trading halt would extend beyond the normal market close (i.e., 4 p.m.). A copy of the letter is
attached.
The letter explains that this proposed change would:
make it more likely that markets close in an orderly manner and minimize the potential for
the circuit breakers to serve as a "magnet" for sell orders;
avoid confusion on the part of mutual fund shareholders, who could rely on a 4 p.m. cut-off
time for getting their purchase and redemption orders processed at that days price; and
facilitate funds ability to price their portfolios in a timely manner.
Craig S. Tyle
General Counsel
Attachment (in .pdf format)