Bursa Malaysia today successfully launched its Bursa Trade Securities trading platform. The launch of this trading platform for the equities market will provide greater accessibility for both local and international investors, as well as enhance trading efficiency and transparency in the market. The first phase of Bursa Trade was implemented in 2006 for the derivatives market. Bursa Trade is powered by the NSC® trading system from NYSE Euronext.
Bursa Malaysia Berhad’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “Today’s successful launch is the culmination of months of preparation which included internal and external-user testing to ensure a smooth and seamless migration. The successful implementation was certainly made possible by the steadfast support of our market participants who had spent a significant number of hours in working together with us in testing the new trading system.”
According to Dato’ Yusli, greater speed, access and control in trading is a notable trend in global exchanges today. “As the Malaysian marketplace progresses, we must leverage on new technologies to allow market users and investors access to more trading opportunities,” he added.
Stanley Young, NYSE Euronext’s Co-Global Chief Information Officer said, “We congratulate Bursa Malaysia on this landmark launch. This platform positions Bursa Malaysia on par with major international exchanges in terms of speed and functionality, but more importantly, gives Bursa Malaysia the flexibility to bring new products and services to the market.”
Dato’ Yusli added, “As with any highly complex technological system, there are always inherent risks. The exchange will be vigilantly monitoring the new trading system for stabilisation to avoid and minimise any possible disruption.”
Some of the key features of Bursa Trade Securities include:
Theoretical Opening Price (TOP)
Investors will be able to have ‘viewing ability’ of the theoretical opening prices for each stock under the pre-opening phase from 8:30am until the market opens for trading at 9am, as well as in the second session. The pre-opening price process enables real-time calculation of stock prices for first matching at opening phase. This allows investors to gauge market sentiment and prices better as the pre-opening period is made transparent. This is particularly useful for new listings.
Theoretical Closing Price (TCP)
This transparency of trading extends to the moment the market is about to end for both the first and second trading sessions. The theoretical closing price feature promotes natural discovery of closing prices for each session.
Trading At Last (TAL)
The last 10 minutes of each session will provide traders with the opportunity to close their positions. Matching will take place at a fixed price which will be either the last done price or the theoretical closing price.
Continuous trading
Bursa Trade Securities enables real-time and continuous matching of orders compared to 10 seconds matching under the current system. This makes the online trading experience faster and much more responsive.
Five best price limits
Investors would find this feature beneficial as it provides them with a clearer picture of market depth. The five-best price limits give investors more control of their trading decisions as opposed to the three-best price limits that is offered by the current system.
Odd Lots Matching
Investors will now be able to do partial matching for odd lots which makes it more marketable. Odd lots can be partially matched based on price time priority.
Final Settlement Price for FKLI and OKLI
The implementation of Bursa Trade Securities will also have an impact on the derivatives market. There will be a change in the calculation of the Final Settlement Price (FSP) methodology for the derivatives products carrying the Kuala Lumpur Composite Index (KLCI) as the underlying instrument. The products affected will be the KLCI futures (FKLI) and the KLCI options (OKLI). This new methodology makes it less susceptible to market manipulation and smoothens out price volatility.
To know more about Bursa Trade Securities, log on to http://www.bursamalaysia.com
