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Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) recently issued an updated list of eligible securities for securities borrowing and lending (“SBL”). With the updated list, the number of eligible stocks available for securities borrowing and lending has been increased from 171 to 218 stocks.
By allowing more stocks to be classified as “approved security”, it will serve to further increase the breadth and depth of the SBL market as well as facilitate better price discovery via more Regulated Short Selling (RSS) activities. The outstanding securities borrowing and lending has grew to RM 1.7 billion by end of 2013 from RM450 million in 2012 while the monthly average RSS trading value rose to RM142 million in 2013 from RM28 million.
For more details on the updated list of the eligible securities allowed for SBL, please visit this webpage on the Bursa Malaysia website under securities borrowing and lending.
RSS and SBL in a nutshell
Under the Exchange’s RSS framework, a short seller can only short sell an “approved security” as determined by the Exchange. A short seller must first borrow securities or have located a borrowing before the seller can execute a short sale. The securities for RSS can be borrowed either under the Exchange’s Securities Borrowing & Lending Agency (“SBL-CLA”) or the Securities Borrowing & Lending Negotiated Transactions (“SBL-NT”) models.
