I discovered the following article in today's Globe & Mail and it outlines a major change that appears is going to be made to the way stocks are traded on the Toronto Stock Exchange (TSX). It remains to be seen what effect this will have on the trading of Connacher shares in the future. Do you see this as a good change or a bad change?

Canadian stocks to get new circuit breaker

tim kiladze

Globe and Mail Blog

Posted on Thursday, February 2, 2012 3:07PM EST

Canadian stocks are on the verge of getting their first circuit breaker to guard against wild trading swings that are based on very little information.

In the future, any stock in the S&P/TSX Composite Index that moves more than 10 per cent in five minutes will be subject to a five-minute halt. The rule, implemented by the Investment Industry Regulatory Organization of Canada, also applies to exchange-traded funds that are principally comprised of Composite Index stocks.

The circuit breakers are being instituted following the May, 2010, flash crash that saw U.S. stocks plummet late in the afternoon even though no news had been announced. It was later discovered that high frequency traders reacted to a small price decline and immediately started dumping shares, sending the market into a panic.

Since then, IIROC has been looking for new ways to prevent against similar slumps. Although nothing as drastic as the flash crash has happened again, there have been instances when traders with "fat fingers" programmed the wrong trades, sending individual stocks into a tizzy.

IIROC put out proposed guidance for new rules in November, and the final decision came out Thursday. On top of the halt, all trades that are executed at more than 5 per cent beyond the price that triggered the circuit breaker will be cancelled.

While the new rule only applies to individual stocks, IIROC is also looking into a circuit breaker that could protect the entire market. More information on that will be released in the future.

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/canadian-stocks-to-get-new-circuit-breaker/article2324261/

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Cheers; Scott