The U.S. Securities and Exchange Commission on Monday enacted a ban on "stub quotes," a move seen guarding share prices from suddenly plummeting to one cent or rocketing to $100,000.

The U.S. stock-market regulator approved rule filings from exchanges that would require market-makers to keep their quoted prices within a reasonable range of the going rate for a given security--eliminating the use of stub quotes, or placeholder prices, which can be set far away from the current market.

The measure is among a raft of new trading rules instituted by stock exchange operators and market authorities following the May 6 "flash crash," when the Dow Jones Industrial Average fell about 700 points in a matter of minutes before rapidly making up much of the losses.

As big traders pulled out of the market that day, fewer quotes were available in some securities. That prompted some investors' orders to trade against the placeholder stub quotes, set as low as one penny in the case of some shares. Thousands of trades were later voided as a result.

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