As part of a regulatory directive issued by SEBI over six years ago on June 28, 2001, the bourses need to implement an "index based market-wide circuit breaker system" every quarter that brings in a coordinated halt in trading across all equity markets in case of any sudden movement.

The circuit breaker system becomes effective at three stages of the index movement -which has been fixed as 10 per cent, 15 per cent and 20 per cent in either BSE's Sensex or NSE's Nifty whichever is earlier.

In case of a 10 per cent movement on either side in either of the two benchmark indices, there would be a one-hour halt if this movement takes place before 1 pm. If the movement is at or after 1 pm, but before 2.30 pm, there would be a trading halt of half an hour, while in case of such a movement after 2.30 pm, there would be no halt triggered by a 10 per cent fall or gain.

In case of a 15 per cent movement, there would be a two-hour halt if such a movement happens before 1 PM, while if the 15 per cent trigger is reached on or after 1 PM but before 2 pm,there would be a one-hour halt.

If the 15 per cent trigger is reached on or after 2 pm, the trading would halt for the remainder of the day.

In case of a 20 per cent movement of the index, the trading would be halted for the remainder of the day.

Importantly, the percentages are calculated not on the basis of the previous day closing levels of Sensex or Nifty, but on the basis of the closing value of the previous quarter.

These percentage points are then translated into absolute points of index variations (rounded off to the nearest 25 points in case of Sensex) and at the end of each quarter these absolute points of index variations are revised and made applicable for the next quarter.

Like today, the Sensex dropped a maximum of 1,743.96 points, while Nifty lost a maximum of 560.75 points, which represented a fall of 9.15 per cent and 9.8 per cent respectively from their previous closing levels.

However, the circuit breaker was triggered for one hour as the fall was 10 per cent of the closing level of the previous quarter for the Nifty index.

On the last trading day of the previous quarter, September 28, the Sensex had closed at 17,291.10 points. The BSE therefore fixed the absolute points of Sensex variation for any day of the current quarter as 1,725 points (10 per cent breaker), 2,600 points (15 per cent breaker) and 3,450 points (20 per cent breaker).

The trading was suspended today for the third time in nearly four years. The last time the markets witnessed a similar break in trading was on May 22, 2006 when the Sensex dropped to 9,826.91 from 1.111.70. Before that, on May 17, 2004, the trading was suspended following Sensex tanking 565 points.