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SIA issues guidelines for unexpected market closes.

The Securities Industry Association's Data Management Division (DMD) unveiled "Unexpected Market Close" guidelines to direct the industry in order routing, clearing and settling equities and options during an unexpected market close.

During the past 30 years, the U.S. markets closed unexpectedly nine times. The reasons fall under two categories, "unexpected but forewarned closings" (such as a national day of mourning when a president dies) or "unexpected and spontaneous" closings (such as a blackout, natural disaster or other catastrophic event).

The information outlined in the paper provides securities firms, stock markets, industry utilities, and any other market participants with a point of reference based on these previous unexpected closes, says the SIA in a release. Among the topics it covers are dealing with open orders, locked-in trades, and ex-dividend dates.

"The paper will help market participants anticipate common operational issues during an unexpected crisis," states Thomas Quinn, chairman of the DMD working group that drafted the guidelines in a prepared statement. "However, it does not supplant the decision-making authority of each market and exchange to remain open or decide to close amid an unexpected emergency," he further states in the release. These industry guidelines would "kick in" once the decision to close is made by each organization.

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