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Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) today shared the revised Tick Rule on Regulated Short Selling (“RSS”) and the Securities Borrowing and Lending - Negotiated Transactions (“SBL-NT”) Failed Trade Proposal frameworks to further facilitate market development.
Bursa Malaysia Chief Executive Officer, Datuk Seri Tajuddin Atan said: “The revised Tick Rule on RSS and SBL-NT Failed Trade Proposal frameworks are part of Bursa Malaysia’s on-going initiatives to create a more efficient marketplace for price discovery and trading, and to introduce market practices which are in line with more developed markets and jurisdictions”.
“With our market fundamentals intact to preserve a fair and orderly market, this is an opportune time for Bursa Malaysia to further enhance the characteristics of the two facilities which is expected to improve market liquidity, provide improved flexibility to market participants in mitigating the risk of settlement failure and reduce transaction costs of trading on Bursa Malaysia. As Malaysia looks towards becoming a leading market in ASEAN, RSS and SBL-NT are some of the important market mechanisms that we look to continually improve and enhance on”.
The revised Tick Rule will allow RSS orders to be executed at the best current asking price or higher. It will provide greater price flexibility to market participants in conducting RSS and enhance the price discovery process and market liquidity.
Under the SBL-NT Failed Trade Proposal’s new framework, investors are now allowed to borrow securities for the settlement of potential failed trades rather than be subjected to the buying-in process. Using this facility, investors can now mitigate the costs of genuine trade errors in the market.
In closing Datuk Seri Tajuddin Atan said; “There is clear indication of market interest in Bursa’s RSS and SBL. The total SBL size stood at RM4.9 billion at the end of January of this year. We anticipate that participation will continue to grow as the Exchange further enhances Bursa’s RSS and SBL facilities to be in line with developed markets”.
The rule amendments have been approved by the Securities Commission Malaysia.
For more details, please visit this webpage on the Bursa Malaysia website under Regulated Short Selling at:
http://www.bursamalaysia.com/market/securities/equities/market-statistics/
RSS and SBL-NT in a nutshell
RSS and SBL-NT are the facilities to provide more efficient price discovery and market liquidity, introduced by Bursa Malaysia in 2007. Under the previous framework, RSS order can only be entered at a price higher than the last done price of the Approved Securities. Meanwhile, borrowing of securities for the purpose of facilitating the settlement of potential failed trades can only be conducted under the Securities Borrowing and Lending-Central Lending Agency (“SBL-CLA”) framework.
