28 February 2017
Kuala Lumpur
Reporter: Drew Nicol

Malaysia loosens the reins on its sec lending market

Bursa Malaysia has revised its securities lending and short selling rules in a bid to boost price discovery and market liquidity.

Investors in the Malaysian exchange’s securities lending market are now allowed to borrow securities for the settlement of potential failed trades rather than be subjected to the buying-in process.

The revision aims to offer a way to mitigate the costs of genuine trade errors in the market.

In the short selling market, changes to the tick rule will allow short selling orders to be executed at the best current asking price or higher.

The change will provide greater price flexibility to market participants and aid price discovery and market liquidity, according to the exchange.

The reforms come under the exchange’s Regulated Short Selling (RSS) and the Securities Borrowing and Lending-Negotiated Transactions (SBL-NT) Failed Trade Proposal frameworks.

The exchange recently valued the total size of its securities lending market at MYR 4.9 billion (USD 1.1 billion).

Bursa Malaysia CEO Datuk Seri Tajuddin Atan said: “The revised tick rule on RSS and SBL-NT Failed Trade Proposal frameworks are part of Bursa Malaysia’s ongoing initiatives to create a more efficient marketplace for price discovery and trading, and to introduce market practices which are in line with more developed markets and jurisdictions.”

“With our market fundamentals intact to preserve a fair and orderly market, this is an opportune time for Bursa Malaysia to further enhance the characteristics of the two facilities which is expected to improve market liquidity, provide improved flexibility to market participants in mitigating the risk of settlement failure and reduce transaction costs of trading on Bursa Malaysia.”

“As Malaysia looks towards becoming a leading market in the Association of South Eastern Nations, RSS and SBL-NT are some of the important market mechanisms that we look to continually improve and enhance on.”

More regulation news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
No further SFT regulations on the horizon, says European Commission
20 October 2017 | Paris | Reporter: Jenna Lomax
article synopsis 300 characters only so it fits to three lines. always add three periods to finish synopsis...
LEI compliance is non-negotiable, says ESMA
20 October 2017 | Paris | Reporter: Jenna Lomax
Steven Maijoor, chair of ESMA stated that there is no room for negotiation where legal entity identifiers are concerned
US appeals court dismisses US equity lending mismanagement case
20 October 2017 | Missouri | Reporter: Drew Nicol
Allegations of mismanagement of a securities lending programme brought by two US Bank pension beneficiaries was dismissed by the US Court of Appeals for the Eighth Circuit this week
Margin rules depress derivative contract terms, survey finds
19 October 2017 | Brussels | Reporter: Jenna Lomax
Only few changes were reported regarding credit terms and conditions with respect to non-centrally cleared OTC derivatives
Trax gains MiFID II ARM licence from UK FCA
29 September 2017 | London | Reporter: Drew Nicol
Reporting solution provider Trax is among the first to be approved by the UK FCA as an approved reporting mechanism (ARM) for transaction reporting services under MiFID II
Shadow banking will not be banned, confirms IMF
26 September 2017 | Helsinki | Reporter: Jenna Lomax
The IMF, along with the FSB and other regulatory bodies, have no desire to shut down the alternative financing industry but that some aspects of the market’s risk features must be managed
AcadiaSoft expands user base for IM compliance
21 September 2017 | Massachusetts | Reporter: Drew Nicol
The second phase of the IM rules went live on 1 September under the regulatory framework of BCBS and IOSCO