New rules to help stop market meltdowns

From a story on FT.com today, it appears that new SEC rules are coming out next week to set floors on equity prices. This is an attempt to avoid the kind of firesale that we saw on May 6, and it's an echo of the limits that have been in place since 1987 to deal with daily changes in the S&P500, known as "circuit breakers." Although such a thing is common in futures markets, shutting markets down after max price changes is pretty new for equities, and not very well understood. Only time will tell if these limits are going to to harmful or worthwhile.

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