Research On Circuit Breakers In The Securities Market

At the beginning of 2016,circuit breakers entered into China’s securities market.Its intention was to reduce the stock market volatility and enhance the stability of the market,but the reaction of the market after the introduction was completely contrary to the expectations of regulators.This abnormal phenomenon shows that there are shortcomings in the system design of circuit breakers.The introduction lacks the accurate grasp of its rationality and obstacle factors,and it is urgent to reflect and perfect the mechanism.Therefore,it is necessary to systematically analyze the theoretical research of this mechanism,and combine with the experience of foreign capital market and the practice of our country to provide ideas and suggestions for the restart of the mechanism and taking root in China’s securities market.The article includes three parts:introduction,text and conclusion.The text is divided into four chapters.The first chapter elaborates the concept and origin of circuit breakers in the securities market,and the discussion of the social effect of the mechanism at home and abroad.To assess the effectiveness of the mechanism,it should be a comprehensive analysis of whether the benefits of the price discovery efficiency are greater than the expense of short-term liquidity costs when the mechanism is triggered.The second chapter compares the application of circuit breakers in other countries,Taking America,Japan,Korea and Singapore as an example,summarizing the practical experience of foreign mature markets from the setting mode of the mechanism and the rules of the market-wide circuit breakers.It can play a better role in stabilizing the market with "Melt is broken" form,"individual stock + index" mode,the multi-level,progressive and personalized design and Rising and falling parallelism,at the same time,it should limit the number of starts every day and take into account the spot and futures market.The third chapter combs the background of the mechanism in our country,and makes a detailed explanation of its system design.Its implementation was inefficient combined with the operation.There were some external adverse environmental factors,such as the lock-up period for major shareholders was about to expire,the rapid depreciation of the RMB,the financing balance in stock market dropped significantly,the implementation of the registration system was going to speed up,and the global stock market generally fell.At the same time,the mechanism has low thresholds and the interval between the two thresholds is too narrow.The fourth chapter focuses on the discussion of restarting circuit breakers.It is necessary to implement the mechanism considering the China’s capital market demand for internationalization,learning from overseas experience,the current situation of the securities market in China,and the perfection and practice of the mechanism,but,at present,the localization of circuit breakers has practical obstacles in the aspects of investor structure,information disclosure and integration of existing trading systems.It is reasonable to restart the mechanism in a good market environment and at the right time,and make recommendations from the following aspects:the system resettlement,the convergence with the individual stock price limit rule and T+1 trading rule and the soundness of the supporting measures.The innovation of this article is reflected in the following aspects.Concerning about the development of circuit breakers in the assessment of foreign institutions to seek the reasonable foothold of the mechanism with the individual stock price limit rule and T+1 trading rule in current China’s stock market.In addition,this-article will make full use of the market transaction data during the implementation of the mechanism in early 2016 to capture the real reflection of the market,focusing on taking the data that reflects the volatility of the stock market to improve the rules of the mechanism,so that the way of perfecting circuit breakers and the recommendations will have more realistic significance.