KUALA LUMPUR, July 24 — Bursa Malaysia Bhd expects trade value for Regulated Short Selling (RSS) to grow as the exchange introduces plans to attract greater market participation in Securities Borrowing and Lending.
Securities Borrowing and Lending is an instrument to facilitate more efficient price discovery.
The total RSS trade value reached a monthly peak at RM293 million in June from a zero base in March 2012 indicating market readiness and interest.
As of Monday, the number of stocks available has increased to 171 from 100 following the Securities Commission’s approval of the removal of the 100 stocks cap.
Bursa Malaysia’s Acting Director of Securities Market, Ong Li Lee, said Malaysia’s marketplace had grown more than 130 per cent in over four years to US$481 billion as of April 2013.
“What we do from an exchange perspective, we provide the framework to the market. And it is really up to the market on the take-up. So, what we want to do is to give the market the mechanism and the framework,” she told a media briefing today.
Under the Bursa Malaysia’s RSS framework, a short seller can only short sell an “approved security” as determined by the exchange and must first borrow securities or have located a borrowing before the seller can execute a short sale.
The securities for RSS can be borrowed under Bursa Malaysia’s Securities Borrowing and Lending Negotiated Transactions models.
Currently, the borrowers for Securities Borrowing and Lending are limited to institutional investors. – Bernama
