* See Memorandum to Accounting/Treasurers Committee No. 14-98, Operations Committee No. 14-98, SEC Rules Committee
No. 24-98, Transfer Agent Advisory Committee No. 15-98 and Equity Markets Task Force, dated March 10, 1998.
[9771]
March 18, 1998
TO: ACCOUNTING/TREASURERS MEMBERS No. 5-98
OPERATIONS COMMITTEE No. 18-98
SEC RULES COMMITTEE No. 26-98
TRANSFER AGENT ADVISORY COMMITTEE No. 19-98
EQUITY MARKETS TASKS FORCE
RE: ICI SUBMITS LETTER ON PROPOSED CIRCUIT BREAKER RULE
AMENDMENTS
______________________________________________________________________________
The Institute has submitted a comment letter on the proposed amendments to the New York
Stock Exchange’s (NYSE) circuit breaker rule, which would increase the trigger levels to 10, 20 and 30
percent declines of the Dow Jones Industrial Average (DJIA) and require that price indications be made
during an intra-day halt for the stocks comprising the DJIA. The letter has been revised slightly from
the draft previously circulated to you* to incorporate members’ comments. A copy of the Institute’s
letter is attached.
The letter strongly supports increasing the triggers, but expresses concern about those aspects of
the proposal that could result in a premature market close. The letter states, however, that the proposal
to increase the triggers should greatly minimize the potential for an early close and, thus, largely
addresses our concerns. The letter supports the proposed requirement that price indications be made
during an intra-day halt but recommends that the requirement be expanded beyond the thirty stocks that
comprise the DJIA to include stocks comprising the S&P 100 index or some other index that contains a
number of the NYSE’s most active, highly capitalized stocks.
Amy B.R. Lancellotta
Associate Counsel
Attachment