The New York Stock Exchange reinstated its “Liquidity Replenishment Point,” program or LRPs, on a temporary basis today, after receiving approval to do so by the Securities and Exchange Commission, according to the Wall Street Journal.
The LRP mechanism, which slows movement in volatile stocks, was turned off in April after the industry-wide limit up – limit down system went into effect. The two mechanisms are similar, but limit up – limit down doesn’t operate during the opening and the close.
Due to whipsawed pricing in some stocks during the minutes that limit up – limit down was not operational traders and the NYSE alike petitioned the SEC to allow a reinstatement.
Limit up – limit down will cover the opening and close from August. Then the NYSE will again shut down its LRP program.
