Rule 48 in effect again today

By: Ray Pellecchia

File Under: NYSE

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NYSE has invoked Rule 48 again today, as we did yesterday. That means that mandatory opening indications are not required.

Hey, if you subscribe to our System Status Notifications via RSS, you don't have to wait 'til I get around to telling you this stuff. In fact, yesterday I missed it altogether, because I was away from my desk at the time. So RSS is the way to go.

Here's the background on the rule, mostly lifted from our NYSE.com/Hybrid page:

Today, New York Stock Exchange has invoked Rule 48, which provides the exchange with the ability to suspend the requirement to disseminate price indications and obtain floor-official approval prior to the opening when extremely high market-wide volatility could cause floor-wide delays in opening of securities on the exchange.

Rule 48 is intended to be invoked only in those situations where the potential for extreme market volatility would likely impair floor-wide operations at the exchange by impeding the fair and orderly opening of securities. Accordingly, the rule sets forth a number of factors to be considered before declaring such a condition, including:

-- 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;
-- Evidence of pre-opening significant order imbalances across the market;
-- Government announcements;
-- News and corporate events; and,
-- Any such other market conditions that could impact floor-wide trading conditions.

The invocation of Rule 48 is in effect only for today. Previously, the NYSE invoked the rule on Jan. 22, 2008; and Dec. 12, 2007. The rule was approved by the Securities and Exchange Commission on Dec. 6, 2007.

And your daily bit of history:

Today in NYSE History
23 Jan 1895 -- The NYSE recommended that listed companies publish annual financial statements.

That was no mean feat at the time, encountering a lot of resistance from many companies. But it was an important, early step toward the strong system of corporate disclosure and governance we have today.