Nigerian Exchange (NGX) will on Wednesday organised a virtual seminar to enlighten investors and other stakeholders on the roles of index circuit breaker as a market-protection tool.

The virtual event themed, “Role and Impact of Index Circuit Breakers in the Capital Market”, is designed to increase awareness and enhance the understanding of NGX circuit breakers.

Circuit breakers are trading halts used by exchanges to guard against sharp fluctuations in the market and are designed to give the market an opportunity to take a break and adjust to all available information before re-opening the market.

Once a circuit breaker is applied, no order can be placed until the trading resumes. However, existing orders can be withdrawn or cancelled but cannot be modified. Trading halts will not affect the clearing, settlement and depository operations for matched trades, which will function as normal.

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It should be noted that the NGX Index Circuit Breaker was triggered for the first time on November 12 2020, when the All Share Index (ASI) surged beyond the 5.0 per cent threshold, since its introduction in 2016.

According to NGX, the webinar will also serve as a platform for receiving information on certain procedures to follow after the first and second trigger of the circuit breakers.

The webinar will feature leading capital markets experts across the globe including Vice President of Research at CBOE Holdings Inc, Chicago, William Speth; Financial Economist, World Federation of Exchanges (WFE), Kaitao Lin, and Jude Chiemeka, Divisional Head, Capital Markets, NGX.

The webinar will bring together market operators, asset managers, pension funds administrators, banks, retail investors and regulators.

NGX stated that the webinar was consistent with its commitment to provide avenues for engagement on its various products and services, with the aim of further enhancing stakeholders’ knowledge and deepen capital market activities.

As capital markets globally continue to be impacted by economic headwinds; circuit breakers are designed to ease any unusual volatility in the market that may cause investors to panic.