CIRCULAR, CIR/MRD/DP/ 25
/2013 dated September 03, 2013
1. Please refer to SEBI circular
SMDRPD/Policy/Cir-37/2001 dated June 28, 2001 directing stock exchanges to
implement an index based market wide circuit breaker system to affect a
coordinated trading halt in all equity and equity derivative markets on index
movement either way of 10%, 15% and 20%.
2. Based on the recommendations of
Secondary Market Advisory Committee (SMAC), it has been decided to partially
modify the system of index based market wide circuit breaker as under:
(i) Daily revision of index based
market-wide circuit breaker limits: Para 2 of the SEBI circular dated June
28, 2001 shall be modified as under:
The stock exchange on a daily
basis shall translate the 10%, 15% and 20% circuit breaker limits of
market-wide index variation based on the previous day's closing level of the
index.
(ii) Resumption of trading after the
halt with a pre-open call auction session
(a) Post-observation of the trading
halt, stock exchange shall resume trading in the Cash Market with a fifteen
minutes pre-open call auction session.
(b) Such pre-open call auction
session shall be governed as per the provisions mandated vide SEBI circulars
no. CIR/MRD/DP/21/2010 dated July 15, 2010, CIR/MRD/DP/32/2010 dated September
17, 2010 and CIR/MRD/DP/6/2013 dated February 14, 2013.
(c) In order to accommodate such
pre-open call auction session, the extant duration of the market halt
prescribed vide SEBI circular June 28, 2001 shall be suitably reduced by
fifteen minutes.
(d) With regard to the dynamic price
bands mandated in para 6.1 and para 6.2 of the SEBI circular CIR/MRD/DP/34/2012
dated December 13, 2012, the reference price for the dynamic price band in the
pre-open session and subsequent trading sessions shall be previous day's closing
price.
3. All other conditions shall be as
per SEBI circular SMDRPD/Policy/Cir-37/2001 dated June 28, 2001.
4. Stock exchanges are directed to:
(i) take necessary steps and put in
place necessary systems for implementation of the provisions of this circular
with effect from October 01, 2013.
(ii) make necessary amendments to the
relevant bye-laws, rules and regulations for the implementation of the above
decision.
(iii) bring the provisions of this
circular to the notice of their members and also disseminate the same on their
website.
5. This circular is being issued in
exercise of powers conferred under Section 11 (1) of the Securities and
Exchange Board of India Act, 1992 to protect the interests of investors in
securities and to promote the development of, and to regulate the securities
market.
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