Singapore Exchange proposes circuit breakers to contain market volatility

THE Singapore Exchange (SGX) said on Wednesday it is considering introducing circuit breakers to minimise volatility in the stock market.

The proposed dynamic circuit breaker will comprise a price band of plus or minus 10 per cent of the price of an instrument, SGX said, adding it will seek public consultation on the matter.

"Should a trade attempt to be executed at a price outside the price band, the circuit breaker will trip and a five-minute cooling-off period will be activated," SGX said. "During the cooling-off period, market participants can continue to trade within the price band, which will remain constant throughout the cooling-off period."

Circuit breakers such as what SGX is proposing are already in use in countries such as Australia, Britain and the United States.