PSX eyeing to enhance Circuit Breakers and Market Halt

The Pakistan Stock Exchange (PSX) is exploring the possibility of further enhancement in the Circuit Breakers (CBs) and Market Halt, it announced on Wednesday.

Enhancement of scrip based Circuit Breakers was implemented in a phased manner along with the introduction of an index-based market halt in January 2020. CBs enhanced from 5pc to 7.5pc in a phased manner and the market halt was implemented based on KSE 30 Index move, initially at 4pc and then increased to 5pc.

This implementation contributed to overall discipline in the market and so as an improvement in the trading volume as a result of enhancing the day’s price range. Furthermore, this implementation is well aligned with the Global practices with an added benefit of better price discovery.

In order to move forward, the PSX is exploring the possibility of further enhancement in the Circuit Breakers from the existing 7.5pc to 10pc in a phased manner along with the introduction of the second level of index-based market halt at 7pc. CBs to increase 0.5pc after every two weeks and once the level of 10pc is reached, the second level of a market halt to be implemented upon 7pc move of KSE 30 Index.

In this regard, PSX said that it would like to engage with market participants through initiating a consultation process on the above-stated implementation. All market participants are therefore requested to share the initial feedback on the above proposal by November 25, 2020.