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SEC chairman pushes for new trade-cancellation rules

SHARE SEC chairman pushes for new trade-cancellation rules

WASHINGTON (AP) — The Securities and Exchange Commission will propose new rules covering cancellation of trades in the wake of the May 6 stock market plunge, the agency's chairman told a Senate Banking subcommittee Thursday.

Nearly 21,000 trades were canceled because exchanges deemed them erroneous after the "flash crash," which sent the Dow Jones industrial average down nearly 1,000 points in less than 30 minutes earlier this month. Many retail investors were affected, and senators pressed at the hearing for remedies.

"The rules have got to have clarity," SEC Chairman Mary Schapiro said. "You've got to provide certainty up front." Schapiro said the agency is examining whether decisions to cancel trades were made fairly and if market professionals fully met their legal obligations to investors.

The agency will put together new rules governing broken trades in the next few weeks, in consultation with executives from the major exchanges.