The largest U.S. stocks face new trading curbs after regulators on Tuesday unveiled a plan meant to avoid a repeat of the mysterious May 6 market drop that quickly spiraled out of control.

The Securities and Exchange Commission proposed so-called circuit breakers that would halt trading in a stock for five minutes, if it fell more than 10 percent in five minutes.

The new restrictions will apply to all stocks in the Standard & Poor's 500 index under the SEC's joint plan with major exchanges and market watchdog Finra.

SEC Chairman Mary Schapiro said the plan, which is open to public comment, would help curb volatility. The circuit breakers would also increase market transparency, bolster investor protection and bring uniformity to decisions regarding trading halts in individual securities, she said in a statement.

The proposal was hastily crafted in response to the unexplained flash crash 12 days ago that drove the Dow Jones industrial average down some 700 points within minutes.

The new stock-specific circuit breakers would be in effect on a pilot basis through December 10, the SEC said. They are in addition to market-based breakers, which did not trip on May 6. The SEC said it is considering recalibrating those.

The broad market circuit breakers affect everybody, and could penalize people for what could be an index move, said Lou Matrone, a sales trader at JonesTrading.

But the stock-based ones deal with it specifically on a case by case basis. You're not penalizing people for trading stocks where nothing is really going on, they're not being dragged in for a 'fat finger' problem or some other problem.

Regulators and the exchanges have been under intense pressure to zero in on what triggered the May 6 meltdown and to find ways to uphold the integrity of U.S. markets.

A circuit breaker or a mechanism to halt trading across markets and in a single stock has emerged as one of the key solutions to protect investors.

The new curbs would align U.S. markets more closely to European markets, which have more muscular safeguards. Circuit breakers at the London Stock Exchange, for example, are based on the liquidity and volatility of individual stocks.

(Reporting by Rachelle Younglai and Jonathan Spicer; Editing by Steve Orlofsky)