Nasdaq OMX Group Inc. (NDAQ) is eyeing new rules that would require some major market participants to keep trading through periods of intense price volatility, according to a senior executive.

After the dramatic market swings of May 6, Nasdaq OMX has crafted a proposal that would increase minimum obligations for market makers in stocks, according to Eric Noll, head of transaction services for the exchange operator.

Nasdaq OMX has circulated the idea among other market centers and regulators, Noll said Tuesday in testimony at a Washington hearing set up to discuss U.S. market matters.

Regulators are considering tougher obligations for big market makers, which stand ready to take the other side of customers' orders, ensuring liquidity.

The severe price drop and rapid recovery seen on May 6 prompted some of the biggest providers of liquidity in U.S. stocks to withdraw from the market, which critics have alleged exacerbated the plunge.

Noll said the Nasdaq OMX proposal could see some market makers required to quote at the best price available nationally for a set percentage of the trading day.

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com
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