Investors and other market participants should note the new circuit breaker that was announced by the Shanghai Stock Exchange (SSE) on 4 December this year and will become effective on 1 January next year will be applicable to Northbound Trading through Shanghai-Hong Kong Stock Connect (Stock Connect).
According to the new circuit breaker, when the CSI 300 Index rises or falls 5 per cent or more from its previous close for the first time in each direction during a trading day, the trading of A shares on SSE will be suspended for a period of 15 minutes. Trading will resume with a call auction after the 15-minute suspension. Unfilled orders placed before the circuit breaker was triggered will be carried forward, and market participants will be able to place and cancel new orders during the suspension.
When the CSI 300 Index rises or falls 7 per cent or more from its previous close for the first time during a trading day, the trading of A shares on SSE will be suspended for the rest of the trading day.
The SSE will issue an announcement on its website when the circuit breaker is triggered.
The Daily Quota operation for Northbound trading will remain the same. Once it is used up after the SSE's opening call auction, including while the circuit breaker is in effect, no further buy orders will be accepted for the remainder of the day.
Hong Kong Exchanges and Clearing Limited (HKEx) held a practice session on Saturday, 19 December this year to help China Connect Exchange Participants prepare for the implementation of the new SSE circuit breaker. The Information Book and Frequently Asked Questions for Investors and Market Participants in the Stock Connect section of the HKEx website-imbed this link will be updated in due course.
Further details of the SSE circuit breaker are available in the Q&A on Circuit Breaker Mechanism for Index at SSE's website.
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