NYSE Invokes Rule 48
This morning the NYSE has invoked Rule 48, a rarely-used rule that allows the NYSE to suspend the requirement to disseminate price indications at the open. This makes it easier and faster to open stocks.
This was only approved by the SEC on December 6, and was only used once--on December 12, 2007. The rule suspends the requirement to disseminate price indications at the open. This makes it easier and faster to open stocks.
Here is the statement from the NYSE:
Today, New York Stock Exchange has invoked Rule 48, which provides the exchange with the ability to suspend the requirement to disseminate price indications and obtain floor-official approval prior to the opening when extremely high market-wide volatility could cause floor-wide delays in opening of securities on the exchange.
Rule 48 is intended to be invoked only in those situations where the potential for extreme market volatility would likely impair floor-wide operations at the exchange by impeding the fair and orderly opening of securities. Accordingly, the rule sets forth a number of factors to be considered before declaring such a condition, including:
Volatility during the previous day’s trading session;
Trading in foreign markets before the open;
Substantial activity in the futures market before the open;
The volume of pre-opening indications of interest;
Evidence of pre-opening significant order imbalances across the market;
News and corporate events; and,
Any such other market conditions that could impact floor-wide trading conditions.
The invocation of Rule 48 is in effect only for today. Previously, the NYSE invoked the rule on Dec. 12, 2007. The rule was approved by the Securities and Exchange Commission on Dec. 6, 2007.
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