Exchanges' plan to make circuit-breaker program permanent lauded by asset managers, traders

6 February 2019 9:51am
A cross-section of asset managers and traders have backed a proposal for US securities exchanges to make permanent a pilot program using circuit breakers to pause trading during unusual stock market swings.

The “limit up-limit down” program, or LULD, “not only helps to ensure orderly markets in periods of extraordinary volatility, but also prevents potentially harmful price volatility during normal market conditions, when transitory gaps in liquidity may occur for non-fundamental reasons,” the group’s letter to the US Securities and Exchange Commission said.

Asset managers such as BlackRock and Vanguard, as well as the trading units of JPMorgan, Citigroup and Citadel Securities were among the letter's 22 signees. Others include the Security Traders Association and Virtu Financial, a leading high-frequency trader.