The 1987 crash that led the U.S. Securities and Exchange Commission to introduce circuit breakers was Black Monday.
After the unprecedented one-day fall on 19 October 1987, regulators examined how trading systems, program trading, margin requirements, and market structure might amplify panic. The U.S. Securities and Exchange Commission subsequently developed coordinated trading halts.
Circuit breakers pause trading when prices move by specified amounts. Their purpose is to give investors and exchanges time to assess information instead of allowing an accelerating feedback loop to continue without interruption.
Modern rules have been revised several times, including after later episodes such as the 2010 Flash Crash. The 1987 crash therefore influenced a continuing framework rather than creating one permanent, unchanged rule.