New NEPSE Circuit Breaker Rule with 8% Index Limit to be Effective from Monday

The Nepal Stock Exchange (NEPSE) will implement a new circuit breaker system starting Monday. According to this, if the index moves up or down by 5% within the first two hours of trading, the first circuit breaker will be triggered. This will result in a 15-minute trading halt. Subsequently, if the index fluctuates by 8% in either direction after trading resumes, a second circuit breaker will activate, leading to the suspension of trading for the remainder of the day. Previously, there were three circuit breakers in place, but under the new rule, there will be only two, with an increased threshold for activation. (April 17, Kathmandu)

Beginning Monday, the stock market will enforce the revised circuit breaker regulation. NEPSE has amended the current trading regulations to apply these new rules from next Monday onward. Under this system, if the NEPSE index increases or decreases by 5% compared to the previous day within the initial two hours of trading, the first circuit breaker will trigger, halting trading for 15 minutes. When trading resumes, if the index then moves by 8% in either direction, trading will be suspended for the day. This revision reduces the number of circuit breakers from three to two but raises the percentage thresholds. Under the former regulations, the first circuit breaker would activate if the index fluctuated by 4% within the first hour, suspending trading for 20 minutes. The second circuit breaker would halt trading for 40 minutes if a 5% change occurred after the first halt. Finally, if after this the overall NEPSE index changed by 6% compared to the previous day, the third circuit breaker would suspend trading for the rest of the day.