International Survey on Market Safeguards

The Chair of e-Finance and the World Federation of Exchanges (WFE) conducted an international survey on market safeguards (so-called circuit breakers) between April and June 2016. In total, 44 of the 72 contacted trading venues answered the questionnaire resulting in a response rate of about 61%. Among the participants are well-known exchanges such as Deutsche Börse, New York Stock Exchange, Nasdaq and the Chicago Mercantile Exchange.

The results show that 38 of 44 exchanges already implemented circuit breakers. Compared to an earlier WFE-survey from 2008, the proportion of exchanges which use circuit breakers increased from 60% to 86%. By analyzing the different types of circuit breakers, it can be observed that market-wide trading interruptions (complete suspension of trading) and volatility interruptions (interruption of continuous trading by a call auction) are most widely used.

In the context of the current discussion, exchanges were also asked about the coordination of circuit breakers among several trading venues. In this regard, 69% of the answering exchanges support a stronger coordination, however, only 32% already coordinate their circuit breakers. The international survey on circuit breakers is part of our research project on market safeguards funded by the Frankfurt Institute for Risk Management and Regulation (FIRM). The complete study with all results can be accessed here.