KARACHI: The new circuit breaker rule went into effect from Monday where the maximum permitted rise and fall in the price of a particular stock on a single day has been raised by 0.5 percentage points to 5.5 per cent from 5pc.
The rule will remain in effect for 15 days after which the threshold would be raised by another 0.5pps to 6pc. In the subsequent month the circuit breaker would be revised by 0.5pps twice after 15 days each until it reaches 7.5pc.
The Securities and Exchange Commission of Pakistan had approved the regulation last month, which also provides that trading at the stock market will be brought to a halt when the KSE-30 index moves up or down by 4pc during the session in a single trading day.
The regulator’s spokesperson had affirmed that the application of circuit breaker on KSE-30 index was meant to prevent irrational price fluctuations; give the market a cooling period and provide facility to brokers to deposit their margins.
Published in Dawn, January 21st, 2020