day-to-day oversight of trading. Similarly, the Na- tional Association of Securities Dealers oversees trading of OTC securities. The Associa- tion for Investment Management and Researchs Code of Ethics and Professional Conduct sets out principles that govern the behavior of Chartered Financial Analysts, more com- monly referred to as CFAs. The nearby box presents a brief outline of those principles. The market collapse of 1987 prompted several suggestions for regulatory change. Among these was a call for "circuit breakers" to slow or stop trading during periods of ex- treme volatility. Some of the current circuit breakers are as follows:   Trading halts. If the Dow Jones Industrial Average falls by 10%, trading will be halted for one hour if the drop occurs before 2:00 P.M. (Eastern Standard Time), for one-half hour if the drop occurs between 2:00 and 2:30, but not at all if the drop occurs after 2:30. If the Dow falls by 20%, trading will be halted for two hours if the drop occurs before 1:00 P.M., for one hour if the drop occurs between 1:00 and 2:00, and for the rest of the day if the drop occurs after 2:00. A 30% drop in the Dow would close the market for the rest of the day, regardless of the time. Collars. When the Dow moves 210 points in either direction from the previous days close, Rule 80A of the NYSE requires that index arbitrage orders pass a "tick test." In a failing market, sell orders may be executed only at a plus tick or zero-plus tick, meaning that the trade may be done at a higher price than the last trade (a plus tick) or at the last price if the last recorded change in the stock price is positive (a zero-plus tick). The rule remains in effect for the rest of the day unless the Dow returns to within 100 points of the previous days close.   The idea behind circuit breakers is that a temporary halt in trading during periods of very high volatility can help mitigate informational problems that might contribute to excessive price swings. For example, even if a trader is unaware of any specific adverse economic news, if she sees the market plummeting, she will suspect that there might be a good reason for the price drop and will become unwilling to buy shares. In fact, the trader might decide to sell shares to avoid losses. Thus feedback from price swings to trading behavior can exacerbate market movements. Circuit breakers give participants a chance to assess market fundamentals while prices are temporarily frozen. In this way, they have a chance to decide whether price movements are warranted while the market is closed. I. Introduction 3. How Securities Are Traded The McGraw−Hill Companies, 2001           EXCERPTS FROM AIMR STANDARDS OF PROFESSIONAL CONDUCT