In the wake of the extreme volatility that shook global markets in August and at the beginning of the year, a group of buyside giants is urging regulators to set new standards for stock exchanges. The aim is to avoid the extreme dives in trading volume that occurred on August 24, 2015.
According to news reports, a consortium of industry players that include buyside giants BlackRock and State Street Corp. have signed a letter addressed to the SEC. The contents of the letter urged the regulator to harmonize rules on trading halts designed to curb volatility.”
According to Bloomberg, The letter comes amid debate over how to prevent a recurrence of Aug. 24, a trading day marked by delayed openings, more than 1,000 halts and wild price swings. More than $1 trillion in value was erased from the U.S. stock market that day before prices partially recovered. The SEC issued its own 88- page postmortem of the days events in December, but did not include any specific proposals for how to prevent a similar occurrence.
Representatives from JPMorgan Asset Management, Cantor Fitzgerald, and Charles Schwab reportedly added their names to the SEC letter.
