CHINA: Notice of Soliciting Opinions on Regulations of Circuit Breaker Mechanism for Index

Friday September 11 2015

The Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE) and the China Financial Futures Exchange (CFFEX), upon approval by the China Securities Regulatory Commission, plan to usher into a circuit breaker mechanism for index under the precondition that the existing price limit mechanism for the individual stocks is kept, in a bid to control the risk of dramatic fluctuations in the market, further perfect the trading mechanism in China’s securities market, maintain the market order, protect the investors’ rights and interests and boost the sound and sustainable growth of the securities market.

The general arrangement for the circuit breaker mechanism for index is as follows: when the daily trading limit of CSI 300 Index reaches a threshold value, trading of all the stocks, convertible bonds, detachable bonds, stock options and stock-related products on the SSE and the SZSE will be suspended, and that of all the stock index futures contracts on the CFFEX will be suspended as well; after the time for the trading suspension expires, trading will be resumed or the market will be closed subject to different conditions.

Click on the link above for further details.