Aug 26, 2015 Is the New York stock market having the equivalent of a heart attack by invoking rule 48 for the third time? Or should it be called a Shemitah God induced attack?
This blog usually does not follow the stock market or its news, but since the Shemitah God caused cycles are affecting the market so greatly and God is intervening mightily it is for me to talk about it.
Rule 48 was unknown to me before I read the article listed below, but it is important for me and the readers to ask ourselves what are the financial leaders seeing that they have to invoke this rule and they are not telling us?
Transparency is a basic condition that has to exist to have trust in anything. Are their actions transparent? Do they explain satisfactorily their reasons for invoking rule 48?
Savy investment managers and financial CEO’s make their living by predicting and controlling the market and try to control the uncontrollable.
God is moving the present market as He wishes to obtain the results He wants and unless you are very fine tuned to His plans and will, there is not one chance in a trillion that you will will be able to stop, control, alter or guess the destination of the market and the forces moving it.
May God rule forever and His will be done.
It’s bad when NYSE invokes Rule 48…for the 3rd time
The New York Stock Exchange invoked the little-used Rule 48 to pre-empt panic trading at the stock market open for the third day in a row on Wednesday. In a historic move, the exchange used the rule before Monday’s open following a dramatic drop in pre-market open futures, including the Dow Jones Industrial Average futures falling more than 700 points.
The goal of Rule 48 is to ensure orderly trading amid financial market turbulence. It’s only used in the event that extremely high market volatility is likely to have a floor-wide impact on the ability of designated market makers (DMMs) to disseminate price indications before the bell.
© Provided by CNBC
Unlike a circuit breaker that stops stock trading, Rule 48 speeds up the opening by suspending the requirement that stock prices be announced at the market open. Those prices have to be approved by stock market floor managers before trading actually begins. Without that approval, stock trading can begin sooner.
To invoke Rule 48, an exchange would have to determine that certain conditions exist that would cause market disruptions. Those conditions include:
- volatility during the previous day’s trading session
- trading in foreign markets before the open
- substantial activity in the futures market before the open
- the volume of pre-opening indications of interest
- government announcements
Rule 48 was approved by the Securities and Exchange Commission on Dec. 6, 2007 and has been rarely used.
Rule 48 was invoked a few times in recent years, including on Tuesday, January 22, 2008 and on Thursday, May 20, 2010. In 2008, the stock markets were subject to great volatility over fears of a global recession and in 2010, the European debt crisis caused panic buying and selling. The rule was also invoked during the August-September 2011 time frame, when European debt crisis fears and U.S. government shutdown debate again roiled the markets, and in early 2015, when massive snowstorms swept across the U.S.
And in what was quite likely a first for hidden stock exchange protocols—Rule 48 was trending on Twitter.
Full text of Rule 48, Exemptive Relief—Extreme Market Volatility Condition
(a) In the event that extremely high market volatility is likely to have a Floor-wide impact on the ability of DMMs to arrange for the fair and orderly opening, reopening following a market-wide halt of trading at the Exchange, or closing of trading at the Exchange and that absent relief, the operation of the Exchange is likely to be impaired, a qualified Exchange officer may declare an extreme market volatility condition with respect to trading on or through the facilities of the Exchange.
(b) In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange, a qualified Exchange officer shall be empowered to temporarily suspend at the opening of trading or reopening of trading following a market-wide trading halt: (i) the need for prior Floor Official or prior NYSE Floor operations approval to open or reopen a security at the Exchange (Rules 123D(1) and 79A.30); and/or (ii) applicable requirements to make pre-opening indications in a security (Rules 15 and 123D(1)).
(c) A suspension under section (b) of this Rule is subject to the following provisions:
(1)(A) Before declaring an extreme market volatility condition, the qualified Exchange officer shall consider the facts and circumstances that are likely to have Floor-wide impact for a particular trading session, including volatility in the previous day’s trading session, trading in foreign markets before the open, substantial activity in the futures market before the open, the volume of pre-opening indications of interest, evidence of pre-opening significant order imbalances across the market, government announcements, news and corporate events, and such other market conditions that could impact Floor-wide trading conditions.
(B) Such review shall be undertaken in consultation with relevant officers of NYSE Market and NYSE Regulation, as appropriate. Following the review, the qualified Exchange officer or his or her designee shall document the basis for declaring an extreme market volatility condition.
(2) The qualified Exchange officer will, as promptly as practicable in the circumstances, inform the Securities and Exchange Commission staff that an extreme market volatility condition has been declared, the basis for such declaration, and what relief has been granted.
(3) An extreme market volatility condition may only be declared before the scheduled opening or reopening following a market-wide halt of securities at the Exchange.
(4) A declaration of an extreme market volatility condition shall be in effect only for the particular opening or reopening for the trading session on the particular day that the extreme market volatility condition is determined to exist. The Exchange may declare a separate extreme market volatility condition on subsequent days subject to sections (b)(1) through (b)(3) above.
(5) A declaration of extreme market volatility shall not relieve DMMs from the obligation to make pre-opening indications in situations where the opening of a security is delayed for reasons unrelated to the extreme market volatility condition.
(d) For purposes of this Rule, a “qualified Exchange officer” means the Chief Executive Officer of ICE, or his or her designee, or the Chief Executive Officer of NYSE Regulation, Inc., or his or her designee.