SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, B Wing, First Floor,
224, Nariman Point, Mumbai 400 021
June 28, 2001
The President/Executive Director/Managing Director
All the Stock Exchanges
Sub:-Index based market wide circuit breaker in compulsory rolling settlement
It has been decided to implement with effect from July 02, 2001 an index based market wide circuit breaker system, which will apply at three stages of the index movement either way at 10%, 15% and 20%. These circuit breakers will bring about a coordinated trading halt in all equity and equity derivative markets nationwide.
1. The market wide circuit breakers would be triggered by movement of either BSE Sensex or the NSE S&P CNX Nifty whichever is breached earlier.
2. 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 of index variations would be revised and be applicable for 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.
3. It will be mandatory for BSE/NSE to provide real time Sensex/Nifty data free to all the exchanges. It will also be mandatory for all the stock exchanges to have real time information of Sensex/Nifty data either from the respective exchange or through a vendor.
4. Scrip wise price bands
5.While in the rest of the scrips that are not in compulsory rolling settlement, the existing price bands would continue to apply.
Stock Exchanges are advised to take steps to implement the above decisions.
P. K. BINDLISH
Deputy General Manager
Secondary Market Depository,
Research & Publications Department