China will launch a planned circuit breaker mechanism on Jan. 1 to curb wild swings in the stock market.
With approval from the China Securities Regulatory Commission, the Shanghai and Shenzhen stock exchanges and China Financial Futures Exchange issued regulations on the mechanism on Friday, according to the Shanghai Stock Exchange.
From Sept. 7 to Sept. 21, the three bourses collected public opinion on the mechanism, which would suspend trading temporarily in response to huge rises or drops.
The latest draft shortened the suspension time in the event of a major swing from half an hour to 15 minutes.
The system will follow changes in the Hushen 300 Index, which reflects the performance of China's Shanghai and Shenzhen stock exchanges. When the index rises or falls by 5 percent, the circuit breaker will be triggered with a 15-minute suspension in stock trading.
If the index changes by 5 percent after 2:45 p.m., or if the index rises or falls by 7 percent, trading will be suspended until 3 p.m., the closing time for daily trading, the draft said.
China has already set a daily trading limit of 10 percent for the rise and fall of individual stocks. The new mechanism will cover trading of all stocks, convertible bonds and stock options and futures contracts.
