NYSE Invokes Rule 48 (Once Again) To Pre-Empt Panic-Selling Open

Tyler Durden's picture

The status quo must be maintained...

NYSE granting "triple width opening quote relief in all option classes for August 24, 2015", Invokes Rule 48

The last time this was invoked was in Jan 2015 (during the blizzard), in June 2012 (amid a dramatic drop in pre-open futures) and in Sept 2011 amid the chaotic 400-point swings in The Dow. Funny they do not use this "Rule" when futures indicate massive upside opens?

 

Via NYSE:

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.

*  *  *

As WSJ explains, basically it means the designated market makers “will not have to disseminate price indications before the bell, making it easier and faster to open stocks.

The rule was approved by the Securities and Exchange Commission on Dec. 6, 2007 and has been used rarely since then.

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dcohen's picture

Can't see why this is happening, the weather was not that bad...

stocktivity's picture

Finally!  After 3 years of saying "It's All Bullshit!!!"  (and being correct), I can finally say It's NOT all Bullshit!!! anymore.

It's not all bad though.

CNBC will see their ratings go up today after declining the past few years.

El Oregonian's picture

May I have a bit more porridge?

TeamDepends's picture

When in doubt, hit 'em with Double Secret Probation.

BLOTTO's picture

Sparkem up boyz...this might be an epic week - if not day.

.

Im baked.

TeamDepends's picture

Aaaaaaaaaand "markets" are "open", boys and girls!!!

Spitzer's picture

Umm Tyler,the Euro ? 

 

No love ? It's getting the gold bid

Urban Redneck's picture

Damn the Bilderberger was right, and they managed to do it without a Grexit... I guess a bunch of Europeans knew all along how to translate BTFD in their mother tongues, and now they want some of their chips back...

Bilderberg Member's picture

CNBC cherrypicking 4-5 stocks saying see, its not so bad while entire industries are down for the ten count, just destroyed.

TeamDepends's picture

Yeah, who are they? Smith & Wesson? Simon Properties (who build FEMA fun camps)?

Max Cynical's picture

Cramer is on the verge of melting down. Everyting he's saying will come back as a sound clip in a few months about how wrong he was.

milo_hoffman's picture

Time to BUY THE DIP?  Or is it too early?  :)

Spungo's picture

Is that the rule where porn must exist for everything that exists?

XAU XAG's picture

Your Kidding me.............................free markets! LOL

NYPoke's picture

Free Markets is a term that came from the Latin for Free Cheese.   That would refer to an elite Cheese, which only Caesar could afford.

ZDRuX's picture

The rule was approved by the Securities and Exchange Commission on Dec. 6, 2007 and has been used rarely since then.

 

It's about to get a lot more miles on it.

Bangin7GramRocks's picture

Next up....Prima Nocta!

Brazen Heist's picture

We like the upside....so much that we will limit the downside in this market.

There are your "Free markets" in action.

fuu's picture

They better be careful or DOW is going to open down 1000.

Conax's picture

859 as we speak.

teehee

fuu's picture

Looks like -5% across the board for open.

Hitlery_4_Dictator's picture

Wish has been granted. -1032

milo_hoffman's picture

Good prediction. It was down >1000 in seconds after the open.

Ralph Spoilsport's picture

Calvin Ball rules in effect. 

B2u's picture

It must be snowing somewhere.

Nothing Ever Happens's picture

It snowed in Alberta two days ago.

That's why they had to invoke, I just know it.

laomei's picture

now this right here is classic america.   china might be full of shit and do desperate things now and again and everyone laughs at it.  but the us, basically crafted a big long series of official-sounding "rules" that result in the same damn thing. 

Spitzer's picture

Pretty hard to blame Putinski on this one. Blame China !

Squid Viscous's picture

at least they're still yucking it up on CNBS, Kernen Cramer, etc unreal...

CHC's picture
CHC (not verified) Aug 24, 2015 9:20 AM

And we mock and give shit to the Chinese for doing the EXACT SAME THING.  Hypocrites!

Zymurguy's picture

Rule 48?  Awwwwwww, no fair!

StupidEarthlings's picture

"Rule 48 "..

Yeah I know..it's like 'directive 4 ' from robocop. 

You just can't make this shit up. (Well I guess ya can apparently )

:/

Mr. Guts's picture

Jim Kramer is using an email from APPL CEO this morning to assure his viewers that things are not that bad. Are you fucking kidding me?

BandGap's picture

Just the opening round of the surreal we are going to be experiencing.

Just relax and enjoy.

SMC's picture

That which can not be sold is worthless...

Cumulus Nimbus's picture

BTFD. (bolt the fucking door!).

cbaba's picture

Shall we shag now or shall we shag later Muppets. 

SillySalesmanQuestion's picture

Let's see...hmmm. Which one to short today...? Sooooooo many choices.....

Racer's picture

If I had any longs and they halted the market to prevent panic selling, I would panic and sell as soon as I could!

Son of Captain Nemo's picture

Can't wait for the litany of best recommendation(s) coming from the "Squawk box" crew this morning!

Aubiekong's picture

What is a lock limit down?  And are our markets now doing so?

IridiumRebel's picture

By the pricking of my thumbs,
Something wicked this way comes.

Open, locks,
Whoever knocks

buzzsaw99's picture

frikkken maggots

PTR's picture

Revolting Cocks, Union Carbide (Bhopal Mix)

 

Dead bodies everywhere....

 

https://www.youtube.com/watch?v=9XUV3JECOSs

Monetas's picture
Monetas (not verified) PTR Aug 24, 2015 9:33 AM

Corrupt Indians .... were to blame !

Paracelsus's picture

I rather liked the way the Chinese bolted the door (no selling for six months or else) to give confidence to the markets.Reminded me of Tianmen square with the fellow standing in front of a line of tanks....

Monetas's picture
Monetas (not verified) Aug 24, 2015 9:29 AM

Catch 48 !

Spitzer's picture

eat crow bitches

 

I've been saying the Euro was going to do this