KUALA LUMPUR, Sept 28 — The Securities Commission Malaysia (SC) and Bursa Malaysia Bhd (Bursa Malaysia) have extended the temporary relief measures relating to margin financing to Dec 31, 2020, which was initially due on Sept 30, 2020.

The flexibilities accorded under the relief measures will enable brokers to better manage their clients’ margin financing facilities and maintain stability in the marketplace amid continued market uncertainties arising from the COVID-19 pandemic.

During this interim period, brokers can continue to exercise discretion whether to impose force selling measures on clients, and accept other types of collateral from investors such as bonds, unit trusts, gold and immovable properties for purposes of margin financing, both the statutory body and stock market operator announced in a joint statement here, today.

Previously, brokers were required to automatically liquidate their clients’ margin accounts if the equity value in those accounts falls below 130 per cent of the outstanding balance.

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They said these temporary measures are subject to brokers meeting their own capital adequacy ratio and shareholder funds as required by Bursa Malaysia.

“They are also expected to exercise discretion in accordance with their own credit risk policies. Both the SC and Bursa Malaysia will continue to monitor developments in the securities market and evaluate the adequacy of existing measures to support an orderly market and to mitigate potential risks.”

For a full array of measures to help capital market participants mitigate potential risks arising from COVID-19, please visit www.sc.com.my/covid-19. — Bernama

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