1st LD-Writethru: Exchanges seek opinions on stock index circuit breaker

China's stock exchanges on Monday began soliciting public opinions on an index circuit breaker system, which would suspend trading temporarily in response to substantial rises or drops.

The system would follow changes in the Hushen 300 Index, which reflects the performance of China's Shanghai and Shenzhen stock exchanges, according to a draft regulation posted on the website of the Shanghai bourse.

When the index rises or falls by 5 percent, the circuit breaker would be triggered with a 30-minute suspension in stock trading.

If the index changes by 5 percent after 2:30 p.m., or if the index rises or falls by 7 percent, trading would be suspended until 3 p.m., the closing time for daily trading, the draft said.

China's stock exchanges will collect opinions on the draft from now till Sept. 21.

The mechanism will be triggered once at most in a single trading day.

"Circuit breaker in both directions will be conducive to curbing excessive transactions and reining in market fluctuations," the draft said.

Investors on China's stock market are mostly small and medium-sized ones, and the market often experiences large fluctuations in both ways, it said.

The new mechanism will help prevent excessive reactions of investors and give them more time to confirm whether a stock's price is reasonable, according to the draft.

On Sunday, China's securities regulator said it would study the introduction of the circuit breaker system in a bid to prevent further abnormal fluctuations.

The benchmark Shanghai Composite Index surged about 154 percent from July 2014 to as high as 5,178 points on June 12, 2015, but later plunged more than 40 percent by Monday. Endi