Index-based circuit breaker

SEBI decided to implement an index-based market wide circuit breaker system, which will apply at three stages of the index movement either way at 10 per cent, 15 per cent and 20 per cent.

These circuit breakers will bring about a coordinated trading halt in all equity and equity derivative markets, nationwide. The breakers would be triggered by movement of either BSE Sensex or the NSE S&P CNX Nifty, whichever is breached earlier.

These percentages will be translated into absolute points of index variations on a quarterly basis and at the end of each quarter, these absolute points would be revised and be applicable to the next quarter.

The absolute points would be calculated based on the closing level of the index on the last day of trading in a quarter, and rounded off to the nearest 25 points in the case of the BSE Sensex and the nearest 10 points in the case of the S&P CNX Nifty.

In addition to the marketwide index-based circuit filters, it has been decided that there would be individual scrip-wise price bands of 20 per cent either way, for all scrips in the compulsory rolling settlement, except for the scrips on which derivatives products are available or scrips included in indices on which derivatives products are available.

For the scrips not in compulsory rolling settlement, the existing price bands would continue to apply.

(Source: NSE News published by the National Stock Exchange of India.)