THE Securities Commission Malaysia (SC) and Bursa Malaysia Bhd will uplift the temporary suspension of regulated short selling (RSS) with effect from Jan 1.
Both market regulators said the decision reached after careful consideration of current market conditions and the evolving needs of the market.
“The suspension of RSS – scheduled to expire on Dec 31 – will be uplifted on Jan 1, 2021 to facilitate investors’ risk management and revive securities borrowing and lending (SBL) activities which is an integral capital market function to promote product development and market making activities,” the SC and Bursa Malaysia pointed out in a joint statement.
To re-cap, the temporary suspension was part of the SC and Bursa Malaysia’s market management measures following heightened market volatility arising from the broader impact of COVID-19.
The RSS will be re-introduced with the following enhanced control measures to ensure stability and maintain investor confidence:
- The daily gross short position limit for approved securities will be temporarily reduced from 3% to 2%; and
- A new cap of 4% on RSS aggregated net short position will be introduced.
Meanwhile, the temporary suspension on intraday short selling (IDSS) and intraday short selling by proprietary day traders (PDT short sale) which are due to expire on Dec 31 will be extended to Feb 28, 2021.
Consequential to the extension of PDT short sale, temporary waivers in relation to PDT will be extended to Feb 28, according to the market regulators.
The temporary revisions to existing market management measures, namely the dynamic and static price limits as well as the circuit breaker, will be extended to May 30, 2021. These were implemented on July 20 and are due to expire on Jan 18, 2021.
Elsewhere, the temporary relief measures and flexibilities relating to margin financing which are due to expire on Dec 31 will be extended to June 30, 2021.
“The SC and Bursa Malaysia will continue to closely monitor ongoing domestic and global developments, and take a pro-active approach in implementing appropriate measures that support a fair and orderly market,” added the market regulators. – Dec 16, 2020
