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FOR IMMEDIATE RELEASE 2010-80

SEC TO PUBLISH FOR PUBLIC COMMENT STOCK-BY-STOCK CIRCUIT

BREAKER RULE PROPOSALS

Washington, D.C., May 18, 2010 The Securities and Exchange Commissionannounced that in response to the market disruption of May 6, the national securities

exchanges and the Financial Industry Regulatory Authority (FINRA) are filing proposed

rules today under which they would pause trading in certain individual stocks if the pricemoves 10 percent or more in a five-minute period.

The SEC is seeking comment on the proposed rules.

The markets are proposing these rules in consultation with FINRA and staff of the SEC

to provide for uniform market-wide standards for individual securities in the S&P 500Index that experience a rapid price movement.

These rules reflect a consensus that was achieved among the exchanges and FINRA after

SEC Chairman Mary Schapiro convened a meeting of exchange leaders and FINRA atthe SEC early last week. That meeting took place within days after the market dropped

significantly and after approximately 30 S&P 500 Index stocks fell at least 10 percent in

a five-minute period.

We continue to believe that the market disruption of May 6 was exacerbated by

disparate trading rules and conventions across the exchanges, said Chairman Schapiro.

As such, I believe it is important that all the exchanges quickly reached consensus on aset of uniform circuit breakers that would be triggered when needed. Todays filings

reflect that consensus. I am pleased by the constructive cooperation of the exchanges and

FINRA as evidenced by their rapid response.

Under the proposed rules, which are subject to Commission approval following the

completion of the comment period, trading in a stock would pause across U.S. equity

markets for a five-minute period in the event that the stock experiences a 10 percentchange in price over the preceding five minutes. The pause would give the markets the

opportunity to attract new trading interest in an affected stock, establish a reasonable

market price, and resume trading in a fair and orderly fashion. Initially, these new ruleswould be in effect on a pilot basis through Dec. 10, 2010.

The markets will use the pilot period to make appropriate adjustments to the parametersor operation of the circuit breaker as warranted based on their experience, and to expand

the scope to securities beyond the S&P 500 (including ETFs) as soon as practicable.

The proposed rules will be available on the SECs website as well as the websites of each

of the exchanges and FINRA. The Commission intends to promptly publish the proposed

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rules for a 10-day public comment period, and determine whether to approve them

shortly thereafter.

I believe that circuit breakers for individual securities across the exchanges would help

to limit significant volatility. They would also increase market transparency, bolster

investor protection, and bring uniformity to decisions regarding trading halts in individualsecurities, said Chairman Schapiro.

During the pilot period, Chairman Schapiro has asked the SEC staff to consider ways to

address the risks of market orders and their potential to contribute to sudden price moves,

as well as to consider steps to deter or prohibit the use by market makers of stubquotes, which are not intended to indicate actual trading interest. The staff will study the

impact of other trading protocols at the exchanges, including the use of trading pauses

and self-help rules. The SEC staff also will continue to work with the exchanges and

FINRA to improve the process for breaking erroneous trades, by assuring speed andconsistency across markets.

The SEC staff is working with the markets to consider recalibrating market-wide circuitbreakers currently on the books none of which were triggered on May 6. These circuit

breakers apply across all equity trading venues and the futures markets.

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The SEC also has sought public comment about a concept release on a wide range of

topics concerning the equity markets to help facilitate the SECs ongoing review ofmarket structure issues.

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