A Circuit Breaker is a term used for a market-wide approach to manage downward movement of the barometer index by halting trading temporarily in the market during normal trading hours, during which time information is disseminated to all market participants.

Activating a Circuit Breaker provides the opportunity for information dissemination to all market participants, including investors, to make well-considered investment decisions.

The  circuit  breaker,  which  was  implemented  by  Bursa  Malaysia  in  March  2002,  was  designed to trigger automatically when the Kuala Lumpur Composite Index (KLCI) records a 10% decline from the previous day’s closing level.  Once the circuit breaker is triggered, the exchange  will  implement  a  trading  halt  for  a  specified  period  of  time.  When  the  circuit  breaker  is  triggered,  trading  on  equity  linked  derivatives  products  such  as  FKLI,  OKLI  and  SSF will also be halted as well.

The circuit breaker will be triggered when the FTSE based Composite Index (FBMKLCI) declines by 10%, 15% and 20% below its closing index of the previous market day, under these following conditions:

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