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SEC proposes stocks 'circuit breakers'

WASHINGTON, May 18 (UPI) -- The U.S. Securities and Exchange Commission Tuesday proposed a trial of a system intended to head off the kind of chaos Wall Street experienced May 6.

SEC Chairwoman Mary Shapiro said a system of individual circuit breakers on all stocks in the Standard & Poor's 500-stock index "would help to limit significant volatility," The New York Times reported. Schapiro told lawmakers on Capitol Hill May 11 regulators were working on establishing a fair process for evaluating trade.

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The circuit breakers -- which would pause trading in a stock if its price shifts by 10 percent or more within in a 5-minute span -- would be subject to a trial following a 10-day public comment period. The trial would end Dec. 10, the SEC said.

SEC officials would continue during the trial period to develop other approaches to addressing the problem, including restrictions or bans on some trading practices, the report said.

In a preliminary report issued Tuesday, the SEC and the Commodity Futures Trading Commission said investigators had been unable to identify a single factor responsible for the May 6 disruption, but said they had "found no evidence that these events were triggered by 'fat finger' errors, computer hacking, or terrorist activity, although we cannot completely rule out these possibilities."

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