Bursa Malaysia Berhad (“Bursa Malaysia”) today announced that Bursa Malaysia Derivatives Berhad (“BMD”) has been granted registration as a Foreign Board of Trade (“FBOT”) by the U.S. Commodity Futures Trading Commission (“CFTC”) pursuant to Section 4(b)(1) of the Commodity Exchange Act and Part 48 of the CFTC’s regulations. An Order of Registration has been issued by the CFTC to BMD on 22 January 2015 in Washington D.C. With this Order, BMD may now permit identified members and other participants located in the U.S. to enter trades directly into its electronic order entry and trade matching system on CME GLOBEX® to trade BMD products.
Chief Executive Officer of Bursa Malaysia, Dato’ Tajuddin Atan said, "The CFTC approval for BMD to be registered as a FBOT is very much welcomed. We have had requests from US customers trading on CME GLOBEX® to directly access our market to hedge and arbitrage based on strategies they have in other exchanges globally. This timely approval paves way for this market opening and will add market vibrancy through enhanced market access and time-to-market; consequently resulting in enhanced trading and liquidity in our market.
The benefits of Direct Market Access (DMA) will certainly be an incentive to draw US traders especially since Malaysia is the global marketplace for palm oil derivatives and the global benchmark for palm oil namely the Malaysian-ringgit denominated Crude Palm Oil Futures (FCPO).”
“We welcome the CFTC’s approval for BMD to be registered as a FBOT,” said Phupinder Gill, Chief Executive Officer of CME Group, which owns 25% of BMD. “Our strategic partnership has paved the way for the internationalisation of BMD in terms of global accessibility and visibility through the migration of its products onto our CME GLOBEX® trading platform, and given strength and confidence to the Malaysian derivatives market.”
Securities Commission Malaysia (“SC”) Chairman, Datuk Ranjit Ajit Singh said, “This is an important development that reinforces the strong regulatory collaboration between the SC and the US CFTC at both the bilateral and global levels. Widening market connectivity with the US derivatives market will help strengthen the competitive position and vibrancy of the Malaysian capital market as outlined in the Capital Market Masterplan 2, and we will continue to place efforts to expand and deepen linkage opportunities globally for our market players and institutions”.
Under the Bursa Malaysia Group, BMD provides, operates and maintains a futures and options exchange and clearing house. In 2014, BMD charted an impressive growth with total volume traded growing by 17 per cent to above 50,000 contracts compared to the volume in 2013 of 43,490. A significant growth of 27 per cent was observed in the FCPO contract where volumes hit an all time record of 10.1 Million contracts for the year.
