Regulatory Alerts2023-09-14
AFM Market Watch 9 - Circuit breakers
The Dutch Authority for the Financial Markets (AFM) issued this Market Watch to clarify the purpose, design, and functioning of automatic circuit breakers and manual trading suspensions. The document explains that circuit breakers act as emergency brakes to pause trading during sudden price swings, thereby preventing algorithmic errors and allowing market participants to assess volatility. It further details the AFM's supervisory role in ensuring trading venues properly calibrate these safeguards and outlines the regulator's authority to suspend trading to protect investors from information asymmetry.
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