Investors have been agitating about the circuit breaker that seems to have stimulated the Jamaica Stock Exchange into action. Feedback received by this publication, suggests that investors could see changes in the length of time the freeze in trading last, with the possibility that it could drop from the current one hour to a lesser period.
The stock exchange is definitely not going to remove the circuit breaker Marlene Street-Forrest advises. That seems to be supported by the findings of the World Federation of Exchanges research that found, “on average, stock returns stabilize, selling pressure resolves, and prices become more informative after trading resumes from the market-wide trading halts.”
The report also states that a recent survey by the World Federation of Exchanges indicates that a large majority – 86 percent of exchanges in the world have circuit breakers, although their design and calibration vary to answer the needs of different individual market structures.
But the JSE is undertaking studies to garner pertinent information on the triggering of the circuit breaker in the past that can be used to guide decision making in any change to the rules.
It could be that the exchange may do away with the two tiered rule of 15 percent and 30 percent and instead have just a 30 percent limit that could sharply reduce the high number of interruptions that occurred over the past three months, primarily in the Junior Market that has been much more bullish than the main market.
The Exchange is also looking at the possibility of extending trading hours, which could well add an hour to the current trading session, feedback from the exchange suggest, bringing the local exchanges more in line with many exchanges worldwide. This may well be merited with the increasing number of listings on the market with the possibility that there could be another six added listings during the rest of the year, in addition to the imminent listing of Dolla Financial.
No timeline seems to be set for the above changes, but it could well take place before the year ends if approved by the JSE board.