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ARTICLE · 03 APRIL 2020

Preparing For Market Disruption: Circuit Breakers And Discretionary Trading Halts

A&O Shearman
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The COVID-19 outbreak and the breakdown of negotiations between oil producers have contributed to a fall in the stock market, ending the longest bull market in history and bringing about a period of volatility

United StatesFinance and Banking
A&O Shearman
A&O Shearman
P. Sean Kelly
P. Sean Kelly
Taylor Pugliese
Taylor Pugliese
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I. Introduction

The COVID-19 outbreak and the breakdown of negotiations between oil producers have contributed to a fall in the stock market, ending the longest bull market in history and bringing about a period of volatility. As of March 23, 2020, movements in the stock market have led to four 7% declines in the S&P 500 Index this year, each triggering Level 1 cross-market circuit breakers and bringing trade to a halt across exchanges (a “trading halt”).1 The following memo provides an overview of certain mechanisms and discretionary powers capable of pausing or stopping the trade of individual securities or general market activity.

Section 2 provides an overview of automatic halt mechanisms:

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