The economic consequences of the "Spring 2020 shutdown" continue to cascade across markets, asset classes and jurisdictions. Calls, from issuers, intermediaries but also investors, have been steadily growing to close trading venues in a manner that is more permanent than using existing powers of circuit breakers, short-selling restrictions or suspension of individual financial instruments, which are designed as temporary measures and which aim to buffer volatility and prevent panic selling. Other industry associations have been calling for financial markets to stay open, while exchanges have been called upon to clarify their business continuity plans and pandemic contingency plans.

The debate on both sides raises considerable legal and regulatory issues that could exacerbate volatility and loss of confidence and firms may want to take proactive measures as discussed herein as restrictions on certain trading activity may more commonplace and talk of a ‘trading venue shutdown” and related risks may become more of a recurrence.