KUALA LUMPUR, May 27 — Bursa Malaysia Bhd will launch a Pilot Market Making Programme (PMMP) in an effort to increase the liquidity and price efficiency of selected mid to large-cap stocks with low velocity (eligible stocks) on June 1.
The PMMP, a sandbox initiative to be undertaken over a two-year period, would allow eligible market makers to register with Bursa Malaysia and carry out market making activities on the eligible stocks while adhering to a pre-set list of prescribed trading obligations, the exchange operator said.
In a statement today, chief executive officer Datuk Muhamad Umar Swift said the programme was the first market making framework for stocks in Malaysia and recognised the important role of market makers as an integral part of the ecosystem.
“The PMMP has been developed to support growth in trading by encouraging liquidity and to help attract new investors and market participants that would further enhance the vibrancy of our marketplace.
“This programme will also provide brokers with the opportunity to build their expertise in the market making of stocks, as well as onboarding clients with market making expertise,” he said.
The exchange operator will assess the programme’s effectiveness based on various quantitative and qualitative factors and other relevant considerations before deciding to make this a longer-term initiative of the equity capital market.
The eligible stocks are selected based on three criteria: the stock is admitted to the official list; has a daily market capitalisation of RM500 million and above, and a stock velocity of 35 per cent and below; and has at least 15 per cent free float. — Bernama
