U.S. securities regulators are seeking to expand the application of single stock circuit breakers from the S&P 500 to include all the stocks in the Russell 1000 index, along with certain exchange-traded funds.

On Wednesday, the U.S. Securities and Exchange Commission published for comment proposals by the national securities exchanges and FINRA to expand a recently adopted circuit breaker program, which was introduced in response to the market disruption of May 6.

Under the program, which is in effect on a pilot basis through Dec. 10, trading halts for five minutes if a security experiences a 10% price change over the preceding five minutes. These new circuit breakers have already been triggered in a couple of instances since they were introduced.

When the new circuit breakers were introduced the SEC said that it would consider expanding it beyond the initial application to the S&P 500. “The proposals would expand the uniform circuit breakers to many more stocks and ETFs,” said SEC chairman, Mary Schapiro. “We look forward to receiving comments from the public on the proposed addition of the Russell 1000 Index securities and the selected exchange-traded funds to the circuit breakers.” She added that she hopes to continue to expand the program to additional publicly traded companies.

In addition to the circuit breakers, the SEC is considering other possible actions, examining different order types, studying the impact of different trading protocols at the various exchanges, working to improve the process for breaking erroneous trades, and considering a recalibration of market-wide circuit breakers.

IE