Brokers remain doubtful about Hong Kong stock exchange's need for circuit breakers

Brokers balked at a stock exchange study that could lead to the introduction of circuit breakers to protect against flash trading of stocks - which can send shares gyrating wildly - saying Hong Kong has adequate suspension rules in place already.

Securities and Futures Commission executive director Keith Lui told the South China Morning Post last week that the SFC supports the carrying out of a study by Hong Kong Exchanges and Clearing on a possible circuit breaker system to match those in place in the United States, India, Thailand, Taiwan and on the mainland.

"[We're] different from the US, where the stocks continue to trade even when the companies are announcing results or deals," said Jeffrey Chan Lap-tak, chairman of the Hong Kong Securities Association.

"HKEx requires companies to suspend trading for the whole trading session or sometimes up to several days until they release an announcement to the markets.

"If we had circuit breakers, it would lead to more companies suspending trading. This would not be welcomed by investors, as they would like to trade their stocks."

HKEx considered introducing circuit breakers in 2004 but eventually dropped after strong opposition.