The Securities Commission Malaysia (SC) today issued the revised Guidelines on Market Conduct and Business Practices for Stockbroking Companies and Licensed Representatives (SBC Guidelines).
The revised guidelines, which take effect today, outline the requirements that would allow stockbroking companies to offer fractional share trading services for shares listed on Bursa Malaysia. A fractional share is a portion of a stock that is less than one standard board lot.
Trading of fractional shares was one of the capital market initiatives announced by YAB Prime Minister Dato' Seri Anwar bin Ibrahim earlier in June this year to make share trading on Bursa Malaysia more accessible, affordable and inclusive for the retail investors, particularly the young investors.
The revised guidelines reflect the SC's continued commitment to enhance market vibrancy and promote greater retail participation in the Malaysian stock market.
The SC Chairman Dato' Seri Dr. Awang Adek Hussin said that allowing retail investors to trade in fractional shares, individuals particularly the younger generation will now have increased affordability and flexibility to trade and invest in the more expensive blue-chip stocks, at a fraction of the standard board lot value.
"In addition, the introduction of fractional share trading would allow retail investors to diversify their portfolio, whilst creating a more inclusive capital market for all Malaysians," he said.
He added: "To support the orderly development of the capital market, it is important for stockbroking companies to have the necessary controls and systems to safeguard the interest of the investors.”
Among the key requirements under the guidelines is the need for stockbroking companies to implement adequate systems, policies, and procedures. This is to ensure fair treatment of customers’ orders, price transparency, and proper supervision of the fractional share trading service.
