PHILIPPINES: PSE Announces Amendment of Circuit Breaker Rules

Thursday April 30 2020

On 29^th April 2020, the Philippine Stock Exchange (PSE) announced the implementation of amendments regarding the PSE Trading Rules on the market-wide circuit breaker which, at present, is automatically triggered when the benchmark index, PSEi, declines by at least 10% resulting in a 15-minute trading halt of the entire market.

The current circuit breaker system, an offshoot of the 2008 global financial crisis, will be replaced by a three-phase circuit breaker system effective Monday, May 4, 2020.

To implement the revisions to the PSE Trading Rules pertaining to circuit breakers, the pertinent provisions of the PSE Trading Rules and Implementing Guidelines of the Trading Rules are amended.

New Section XXI of the Implementing Guidelines of the PSE Trading Rules:

Three (3) levels of Circuit Breaker will be implemented in the PSE trading system, as follows:

Level 1 decline means the PSEi decreases by at least ten percent (10%) compared to its previous day’s closing level. In such case, trading will be halted for 15 minutes. Under the whole day trading schedule where pre close starts at 3:15 p.m., Level 1 Circuit Breaker shall be triggered only up to 2:55 p.m.

Level 2 decline means the PSEi decreases by at least fifteen percent (15%) compared to its previous day’s closing level. In such case, trading will be halted for 30 minutes. Under the whole day trading schedule where pre-close starts at 3:15 p.m., Level 2 Circuit Breaker shall be triggered only up to 2:40 p.m.

Level 3 decline means the PSEi decreases by at least twenty percent (20%) compared to its previous day’s closing level. In such case, trading will be halted for 60 minutes. Under the whole day trading schedule where pre-close starts at 3:15 p.m., Level 3 Circuit Breaker shall be triggered up to 2:10 p.m. only.

Under the current shortened trading schedule where pre-close starts at 12:45 p.m., Level 1 Circuit Breaker shall be triggered up to 12:25 p.m. only. Level 2 Circuit Breaker shall be triggered up to 12:10 p.m. and Level 3 shall be triggered up to 11:40 a.m. only.

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