Business Notes MARKETS

For almost nine months following the Oct. 19, 1987, crash, U.S. financial markets failed to install any substantial safeguards to prevent a recurrence. The delay prompted calls for new regulations and frightened individual investors away from the stock market. Last week, in a surprising show of cooperation, the New York Stock Exchange and the Chicago Mercantile Exchange proposed safety measures in response to concerns raised by several Government studies of the crash.

The two exchanges, at which the simultaneous program trading of stocks in New York City and index futures in Chicago can create fearsome volatility, agreed to impose restrictions when prices begin falling out of control. One safeguard will be a "shock absorber," a half an hour price floor that will go into effect on the Standard & Poor's 500 index whenever it drops on the Merc by the equivalent of about 96 points on the Dow Jones average. Under even more stormy conditions, if the Dow drops 250 points, a "circuit breaker" would halt trading for one hour on both the Big Board and in the Merc's S&P futures pit.

As a separate measure, the New York exchange announced plans for an "express lane" to expedite the trades of individual investors on heavy selling days. The new proposals will require approval by the Government's securities and futures regulators.