SFC backs consultation on circuit breakers

The Securities and Futures Commission backs the stock exchange's move to study whether circuit breakers are needed to protect the market from sharp price movements.

SFC executive director Keith Lui told the that such control measures would put the city in line with international practice.

"Many international firms in the city have operations overseas where they have a circuit breaker system. I do not think they would have a problem if Hong Kong were to have a similar system," Lui said. "However, any circuit breaker system must first require a public consultation."

He said the SFC would support any such consultation by Hong Kong Exchanges and Clearing.

The stock exchange has set up a working group to study the concept, which would see trading halted if a stock surged or fell by a set limit.

Lui said many markets, such as the US and mainland, had introduced circuit breakers to counter risks from a range of sources including trading errors.