KUALA LUMPUR, April 16 — Bursa Malaysia Bhd has introduced intraday short-selling (IDSS) for all investors as part of the exchange’s strategy to boost market liquidity.
Chief Executive Officer Datuk Seri Tajuddin Atan said the introduction of IDSS to a wider group of investors was timely considering the growing sophistication of market participants.
“This measure is part of the exchange’s strategy to boost market liquidity and further improves flexibility for market participants to refine their trading and risk management strategies,” he said in a statement today.
Bursa Malaysia would continue to undertake initiatives to provide a more efficient and facilitative market framework, Tajuddin said, adding that the introduction of IDSS was set to further advance the exchange’s efforts to build a dynamic and vibrant capital market.
The IDSS implementation followed Prime Minister Datuk Seri Najib Razak’s announcement at the World Capital Market Symposium in Kuala Lumpur on Feb 6 of measures to enhance vibrancy and stimulate greater trading activity in the stock market.
Tajuddin said the exchange had implemented a clear framework to facilitate IDSS trades for all investors.
Under the framework, investors will be able to sell securities first and buy the securities later within the trading day itself.
IDSS can be carried out on a selected list of eligible securities. This list of approved securities, currently comprising 280 securities, will be reviewed every six months.
According to Tajuddin, a robust compliance requirement and safeguards had also been put in place to allow for IDSS trades to take place, including market controls for IDSS suspensions if a stock price falls by more than 15 per cent from the previous day’s closing price or if the gross short selling volume exceeds the daily maximum limit of three per cent of outstanding shares per security.
The framework also specifies compliance obligation requirements for investors before IDSS activities can begin.
Tajuddin added that to allow investors to carry out IDSS, the exchange had amended the Rules of Bursa Securities, Directives and the Participating Organisations’ Trading Manual. These amendments have been approved by the Securities Commission. — Bernama