
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 6, 1990                   TAG: 9006060102
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

STOCK-REFORM BILL GETS HOUSE OK

A reform bill giving the Securities and Exchange Commission powers to curb the controversial practice of program trading during stock market emergencies was passed by the House on Tuesday.

The Securities Markets Reform Act would allow the SEC to limit program trading "during periods of extraordinary market volatility" - the sharp climbs or drops in stock prices.

The measure, introduced last year, was adopted on a voice vote.

Critics of program trading - rapid-fire transactions through computerized buy and sell programs - blame it for worsening the 1987 stock market crash and the 190-point market slide last Oct. 13.

Many believe that strategy and the volatility that often seems to accompany it have driven small investors out of the stock market.

Last March, the Treasury Department wrote the House Energy and Commerce Committee opposing a program trading ban, saying the measure's language was "overly broad and potentially harmful" to market reform.

But the measure was voted out of committee anyway on March 13.

"We are not talking about banning computers or legitimate program-trading strategies. Far from it," said Rep. Edward Markey, D-Mass., chairman of the finance subcommittee that oversees the SEC and one of the bill's co-authors.

"We are giving the SEC the tools to protect the securities markets from manipulative trading strategies."

In addition to the program trading curb, the bill:

Expands the authority of the SEC chairman to shut down the securities markets, with the president's permission, in times of market emergency.

Requires large securities traders to report their market positions to the SEC.

by CNB