The NYSE has filed with the Securities and Exchange Commission for immediate effectiveness a new rule that will authorize the NYSE to suspend certain rule requirements relating to the opening of securities in the event of extreme market volatility or market-wide price dislocation. Extreme volatility impacts NYSE’s pre-opening rule requirements, which over the past few months has led to undue delays in NYSE openings. The new rule will permit a qualified NYSE officer to declare an extreme market volatility condition, which will suspend certain pre-opening rules. The new rule is intended to ensure timely, fair and orderly opening of securities.
A variety of factors need to be met in order for the rule to be invoked, including, but not limited to, the following:
- Volatility during the previous day’s trading session;
- Substantial activity in the futures market before the opening of the NYSE;
- The volume of pre-opening indications of interest;
- Evidence of significant pre-opening order imbalances across the market; and
- News and corporate events.