An error trade in the shares of a listed company triggered a market-wide halt on the Colombo Stock Exchange (CSE) today.
Shares in Distilleries Company of Sri Lanka PLC prompted the 30-minute pause due to their trading value of 100 rupees (approximately $0.87) per share in a 1,200-volume execution, down from the closing price of 143.60 rupees (approximately $1.26) per share the previous day.
The volatility safeguards in place on the Sri Lankan bourse ensure that trading is halted if the Milanka Price Index (MPI) drops by more than five percent within the day from the previous market's close.
"A Market Halt is used internationally by stock exchanges as a procedure for volatility management," says the CSE in a press release. "Under such procedures trading may be halted temporarily or, under extreme circumstances, a market may be closed prior to normal close of the trading session."
So-called circuit breakers have become hot topics following the US flash crash, in which the Dow Jones Industrial Average dived by hundreds of points in a short period of time, only to recover twenty minutes later. In Europe, the installation of price limits that will halt trading when breached have been mandated by the Markets in Financial Instruments Directive review.
More from Sell Side Technology
Updating your subscription status
Winner's Announced: Sell-Side Technology Awards 2014
The winners of the 2nd annual Sell-Side Technology Awards 2014 were announced in New York on April 15. These awards recognize the leading technologies and third-party vendors in their area of expertise, through an auditable and transparent methodology. To view the winners across the 24 categories click here.
03 Nov 2014
18 Nov 2014
08 Dec 2014
20 Oct 2014
03 Nov 2014
The over-the-counter (OTC) derivatives market is in the midst of a global regulatory restructure. Authorities in Europe, Asia and the US are currently...
A fast, flexible and reliable investment decision-making process must be based on access to accurate and consistent information throughout an organization....