We refer to the article in The Edge Financial Daily on 16 July 2008 (page 1 & 6) entitled "Massive Short Selling?":
Bursa Malaysia would like to clarify that the failure of delivery of securities referred to in this article involved a single client of a Participating Organisation.
As a result of this delivery failure, the buying-in mechanism instituted by the Bursa Malaysia Clearing House was effected promptly, ensuring the delivery of the securities to the buyer on time and caused no impact to the market.
We have stringent rules in place to ensure delivery of securities to the buyer, and the buying-in mechanism would deal with any instances of non-delivery by the seller. Under the buying-in mechanism, a mandatory purchase of the securities from the market will be instituted and the cost of the purchase for non-delivery will be borne by the seller.
The maintenance of an orderly and fair market is of paramount concern to us. Needless to say, investor protection is the exchange's utmost priority and our regulatory framework sufficiently provides for this. We vigilantly monitor for compliance with our trading rules and have in place adequate mechanisms to detect any instances of unusual activities. The exchange will promptly investigate such unusual activities and take the necessary enforcement action where non-compliance with the trading rules is detected.
We are currently investigating this matter and would like to assure the market that if there are any instances of breaches to the trading rules, appropriate actions will be taken. Unauthorised short selling activity is not permitted in the Malaysian market, unless it is through the Regulated Short Selling, Permitted Short Selling or by an approved propriety day trader.