The Philippine Stock Exchange, Inc. (“PSE”) will be implementing rule 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.
The new system will have multiple circuit breaker triggers for declines in the benchmark index, PSEi, of at least 10%, 15% and 20%, resulting in a market-wide trading halt lasting 15 minutes, 30 minutes and 60 minutes, respectively.
SEC likewise approved the adjustment of the lower static threshold or pricing band from 50% to 30% as another tool to contain the expected high volatility in capital markets, while the upper threshold of 50% remains unchanged.