UPDATE 2-U.S. exchanges want tighter circuit breakers
* 23-year-old trading pauses did not trip in 'flash crash'
* Lower thresholds, shorter trading halts proposed
* Plan would use S&P 500 index, not Dow, as reference
* Designed to reduce extraordinary volatility -- Schapiro (Rewrites; adds Schapiro comment, other breakers, FACTBOX, byline)
By Jonathan Spicer
Sept 27 (Reuters) - The U.S. securities regulator is considering a plan that would improve a 23-year-old circuit breaker that did not trip during last year's "flash crash" to make it more sensitive to extreme market moves.
Exchanges pitched a long-awaited plan that would lower percentage thresholds for halting stock trading, shorten the halts and change the reference index to the broader Standard & Poor's 500 .SPX from the current Dow Jones industrial average .DJI, the U.S. Securities and Exchange Commission said on Tuesday.
The government regulator could formally adopt the changes after a 21-day public comment period.
The new breakers, designed to pause trading in all exchange-listed securities throughout U.S. markets, are the latest in a long line of responses to the May 6, 2010, crash, which revealed deep flaws in market structure, spooked investors and embarrassed exchanges and regulators.
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