Chinese stock markets plan ‘circuit breakers’ against volatility

Chinese stock markets have proposed “circuit breakers” to freeze trading if stocks rise or fall too fast, after recent fluctuations on its bourses [sic] spooked global markets, a news report said Tuesday, dpa reports.

The Shanghai and Shanzhen exchanges would see trading stopped for 30 minutes if a key index rises or falls by 5 per cent within a day.

An intra-day change of 7 per cent would cause trading to be stopped for the rest of the day, the South China Morning Post reported, citing the exchanges.

The index used would be the CSI300, which lists the 300 largest firms listed on the mainland. It would include futures in those shares.

The system would restrict all A-shares, traded only by Chinese citizens, which account for the majority of stocks in China.

The proposal is now open to public feedback until September 21, the report said.

Full article: Chinese stock markets plan ‘circuit breakers’ against volatility (Asia Times)

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