Factbox: Stock exchanges revise trading rules, circuit breakers as volatility surges

(C) Reuters.

(Reuters) – Global stock exchanges are changing trading rules to protect their markets from intense volatility and speculative trading as the coronavirus pandemic hammers equities and threatens the world economy.

There have also been calls to shorten trading hours or for shut downs for a time to help calm stock markets rocked by outbreak.

The New York Stock Exchange will temporarily close its trading floors and move fully to electronic trading from March 23.

Here are some of the measures taken by exchanges across the world so far:

EUROPE

GREECE

** The country’s securities regulator banned short-selling on the Athens stock exchange until April 24 to shield the equities market from volatility

ITALY

** From March 17, market regulator Consob suspended short-selling on the Milan stock market for three months.

SPAIN

** Imposed a one-month ban on short-selling, which it said could be extended.

FRANCE

** France banned short-selling on 92 stocks on March 17

TURKEY

** A ban on short selling has been in place in Turkey since late February following an air strike that killed dozens of Turkish troops

ASIA

INDIA

** The country’s market halved position limits for certain stock futures, restricted short-selling of index derivatives and raised margin rates for some shares in a bid to curb “abnormally high” volatility.

** The measures will come into effect from March 23 and continue for one month

PHILIPPINES

** On March 17, the Philippines became the first country to suspend trade only to reopen later that week after the government exempted financial trading platforms from a strict coronavirus quarantine procedures.

THAILAND

** The country revised its circuit breaker rules that will last until the end of June

** New rules will see a 8% drop trigger a 30-minute halt in trade; a 15% fall to initiate a 30-minute halt, while a 20% plunge will see it halted for an hour

SOUTH KOREA

** Earlier in March, South Korea tightened short-selling rules for three months from March 11

** Stocks with a sudden and abnormal increase in short-selling transactions will be suspended from further short-selling for 10 days, compared with a the current limit of one day

** Stocks on the KOSPI that drop 5% or more and where daily short-selling transactions are up by three or more times the average of the previous 40 days will be subject to the new rule

** The exchange also briefly activated sidecar curbs on March 12 for the first time in more than eight years to halt program trading

INDONESIA

** The stock exchange tightened circuit breaker rules, where a more than 5% drop on its main stock index (JKSE) will see trading halted by 30 minutes, compared with the 10% previously

** If the index’s losses extend to 10% when trading resumes, it will be halted for a further half hour

** The exchange has also changed mechanisms for individual stock prices, and trading will now be halted if there is a 10% move, down from a previous 20-35%

** There is also a ban on short-selling: the exchange removed all stocks on a list where it was allowed until further notice

AFRICA

SOUTH AFRICA

** The Johannesburg Stock Exchange decided against shortening trading hours, but its head said JSE would strictly enforce rules prohibiting uncovered, or naked short-selling and lengthen the mandatory halts to trading circuit breakers.

MIDDLE EAST

UNITED ARAB EMIRATES

** Shares in the United Arab Emirates stock exchanges will be allowed to drop a daily maximum of 5% from their previous day closing price, state news agency WAM reported.