The Securities and Exchange Commission (SEC) is working with national securities exchanges and the Financial Industry Regulatory Authority (FINRA) by filing proposed rules which will pause trading in certain individual stocks, by using what it calls "circuit breakers," if the price moves 10 percent or more in a five-minute period.

On May 6th, mortgage finance stocks took a beating as the exchanges swung wildly, dipping nearly 1,000 points before clawing back some ground.

These rules reflect a consensus that was achieved among the exchanges and FINRA after SEC chair Mary Schapiro convened a meeting on the incident early last week.

"We continue to believe that the market disruption of May 6th was exacerbated by disparate trading rules and conventions across the exchanges," Schapiro said in a statement. "As such, I believe it is important that all the exchanges quickly reached consensus on a set of uniform circuit breakers that would be triggered when needed."

Initially, these new rules would be in effect on a pilot basis through Dec. 10, 2010, pending approval.

The SEC staff is working with the markets to consider recalibrating market-wide circuit breakers currently on the books — none of which were triggered on May 6. These circuit breakers apply across all equity trading venues and the futures markets.

Write to Jacob Gaffney.

Disclosure: the author holds no relevant investments.

[Update 1: adds Senate vote against Reid motion]

Sen Harry Reid (D-NV) successfully filed a motion to end the floor debate on S 3217, the Restoring American Financial Stability Act, and the amendment sponsored by Sens. Chris Dodd (D-CT) and Blanche Lincoln (D-AR) that aims to reform the over-the-counter derivatives market.

Reid's action could force the Senate to end debate and vote on the financial reform package by late Wednesday. Senators rejected the motion late Wednesday afternoon.

"This cannot be delayed any longer," Reid said from the Senate floor on Monday. "The time has come to begin work sending this to conference so we can have a bill go to the president."

The vote means the Senate could adopt the financial reform bill this week after adding several amendments on Monday, including an amendment sponsored by Sen John Cornyn (R-TX) that aims to prevent taxpayer money from bailing out foreign governments.

"My amendment would bring needed transparency and accountability to what the International Monetary Fund (IMF) is doing with American taxpayer dollars, including roughly $60bn that our country has already provided to the IMF over the years," Cornyn said from the Senate floor. "Specifically, this amendment would require the administration to look more closely at any proposed IMF loan to see if that country's debt exceeds its GDP and when it does, as Greece's does, to certify to Congress that the loan will be repaid.

Senators also passed by a voice vote an amendment sponsored by Sen John Rockefeller IV (D-WV) that aims to uphold authority at the Federal Trade Commission (FTC).

"It fully preserves the FTC's enforcement and regulatory authority under the FTC Act as it is today," Rockefeller said from the Senate floor. "The underlying [financial reform] bill creates a new consumer protection bureau within the Federal Reserve and I fully support that effort. But creating that new bureau should not come at the expense of the FTC's mission, which is consumer protection, which is not, incidentally, a zero-sum game."

Senators previously added amendments that impose leverage and risk-based capital requirements, assign credit-rating agencies to deals, exempt qualifying mortgages from credit risk retention requirements, require lenders to maintain certain underwriting standards and call for a one-time audit of emergency lending actions at the Fed.

Write to Diana Golobay.