SEC to keep a watchful eye over extreme price volatility


The SEC has underlined that it is placing a close eye on extreme price volatility following events involving trading prices last week. 

Extreme price volatility can lead to investors being vulnerable to heavy and rapid losses according to the Commision, as it stated its core market infrastructure has enough weight to ride the wave of this week’s trading volumes. 

Offering an update, it stated: “As always, the Commission will work to protect investors, to maintain fair, orderly, and efficient markets, and to facilitate capital formation. The Commission is working closely with our regulatory partners, both across the government and at FINRA and other self-regulatory organisations, including the stock exchanges, to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing. 

“The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.

“In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.

“The Commission will continue our work on behalf of investors and the markets. In this regard, we hope to facilitate a robust public dialogue among market participants and investors on the structure and operation of our securities markets.”