China to set stock circuit breaker to manage recurring crashes

China will launch a circuit breaker mechanism for its stock market on January 1 to curb wild swings in the bourse after the country's biggest crash that saw Chinese investors losing a whopping USD 3.2 trillion in three weeks of mayhem in July.
With approval from the China Securities Regulatory Commission, the Shanghai and Shenzhen stock exchanges and China Financial Futures Exchange issued regulations on the mechanism today, state-run Xinhua news agency quoted the Shanghai Stock Exchange officials as saying.
From September 7 to September 21, the three bourses collected public opinion on the mechanism, which would suspend trading temporarily in response to substantial rises or drops.

China had worst crash of stock market in July which wiped out about USD 3.2 trillion dollars of capital prompting government initiate investigation.
Since then the market experienced severe volatility. Over 20 million small investors who lost heavily in the fluctuations deserted the market since then.