"What you're seeing is a quiet, responsible response to an extraordinarily staggering national tragedy which hit the financial community with particular force," said Joel Seligman, dean of the Washington University law school in St. Louis.
The rules also would let brokerages calculate net capital without considering the four days the market was closed; let mutual funds borrow from and lend to "related parties," and relax a requirement for in-person meetings of mutual fund boards.
The SEC's unprecedented action follows moves by Congress, in 1990 and 1996, that gave the agency power to "summarily" take emergency action to "maintain or restore fair and orderly securities markets" and to grant exemptions from SEC rules.
"This is like a magic wand-type of provision," Seligman said. "You can do anything you want, with very few restrictions."
Unless trading systems fail during a Saturday test, the New York Stock Exchange, the NASDAQ Stock Market, and other US markets are set to be back in business Monday at 9:30am. Trading floors have been quiet since terrorists on Tuesday flattened the twin 110-story World Trade Center towers and forced the evacuation of Manhattan's financial district.
In public comments this week, Pitt talked about easing repurchase restrictions as a way to provide stability in the markets.
"We're pleased to see that flexibility" created by the SEC action on buyback rules, said Joseph White, chief financial officer at Insituform Technologies Inc. "That should give more reassurance to the market."
Chesterfield, Missouri-based Insituform, which repairs tunnels and pipelines, added 1 million shares to its existing 1.5 million-share repurchase authorization in a bid to soothe investors, White said.
Cisco Systems Inc, the largest maker of computer-networking equipment, yesterday said its board had authorized the repurchase of as much as US$3 billion of stock over the next two years.
At least 20 US companies followed Friday with announcements about new, expanded, or continued buybacks.
H&R Block Inc, the world's largest tax preparer, said the company had new authority to buy back 15 million common shares, on top of a 12 million-share buyback authorized last year.
"The timing could not have been better," said investor relations director Mark Barnett. "As a result of this authorization we're in an excellent position to support our shareholders in the event we would see a lot of pressure on our stock."
HCC Insurance Holdings Inc, a property and casualty insurer that expects some claims related to the World Trade Center's destruction, also said it's ready to repurchase 3 million shares, just in case.
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