NEPSE’s Circuit Breaker System Amended
April 7, 2026 | Investopaper
Nepal Stock Exchange (NEPSE) is set to overhaul its long-standing circuit breaker system in a bid to better manage market fluctuations. Under the proposed amendment to the Securities listing and Trading Regulation, 2075, the existing three-tier structure—which halted trading at 4%, 5%, and 6% index movements—will be replaced. The revised framework, already approved by the board of the Securities Board of Nepal (SEBON), introduces a 5% initial threshold: if the NEPSE index rises or falls by 5% within the first two hours of regular trading, transactions will be suspended for 15 minutes. Previously, a 4% move triggered a 20-minute halt. Furthermore, the final circuit breaker has been raised from 6% to 8%, meaning that if the index moves by 8% at any point after the market reopens, trading will be halted entirely for the remainder of the day.
While the index-level circuit breaker is changing, the price limit for individual company shares remains unchanged at 10 percent. This means no single stock can rise or fall more than 10 percent in a single trading day. Market participants expect the revised circuit breaker to reduce panic-driven shutdowns and encourage more continuous trading, especially during moderate volatility. The existing 6% closure rule had been criticized as too sensitive, often halting trade prematurely on days with healthy but sharp movements.
Technical preparations are reportedly complete, and the new system is likely to go live soon after the official directive reaches the exchange.
