$MDLY FYI Q: What is Limit Up-Limit Down (LULD)? On April 5, 2011, national securities exchanges and the Financial Industry Regulatory Authority, Inc. (FINRA) filed a proposal to establish a new “limit up-limit down” rule to address extraordinary market volatility in U.S. equity markets. The Limit Up-Limit Down (LULD) mechanism is intended to prevent trades in National Market System (NMS) securities from occurring outside of specified price bands. The bands would be set at a percentage level above and below the average reference price of the security over the immediately preceding five-minute period. To accommodate more fundamental price moves, there would be a five-minute trading pause – similar to the pause triggered by the current single-stock circuit breakers – only if trading is unable to occur within the specified price band after 15 seconds. On May 31, 2012, the SEC approved the NMS Plan on a pilot basis.