Summary Box: SEC to put forward new rules covering cancellation of trades after May 6 plunge

Summary Box: New rules for broken trades

NEW RULES FOR CANCELING TRADES: The Securities and Exchange Commission is putting forward proposed new rules spelling out when and at what prices stock trades would be canceled, a response to last month’s “flash crash.”

HOW IT WORKS: There would be a series of thresholds for canceling trades when prices diverge from the last sale before pricing was disrupted. The higher a stock’s value, the smaller the divergence would have to be to trigger a cancellation.

WHAT’S THE GOAL?: The idea is to bring consistency to rules governing broken trades. Currently each exchange has the discretion to choose the level at which trades are canceled. Almost 21,000 trades were canceled in the May 6 market plunge.