Circuit Breaker in NepSE

Nepal Stock Exchange (NepSE)

Circuit breaker is a provision started for the safety of investors. Every time the stock price or Nepse index makes a significant movement on either side, a halt is applied in order to stop any kind of emotional move. In Nepal, this system came into effect from 2064/6/4 (21st September 2007).

The halt provision applies in 3 stages and ultimately ends up closing the day’s trading.

The 3 stages of circuit break in Nepse index:

In case of Individual companies listed in Nepse, circuit break applies at 10% price movement on either side (Positive or negative). The stock cannot trade at a price higher or lower than 10% of the last traded price.

In India (National Stock Exchange Ltd.: NSE)

The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the BSE Sensex or the Nifty 50, whichever is breached earlier. In this regard the Exchange has issued a circular no 85/2013 (Download No-24709) dated October 11, 2013.

The market shall re-open, after index based market-wide circuit filter breach, with a pre-open call auction session. The extent of duration of the market halt and pre-open session is as given below:

Thanks to:

• https://nepsekhabar.com/newsdetail/what-is-a-circuit-break
• https://www.nseindia.com/products/content/equities/equities/circuit_breakers.htm