The Securities Commission (SC) today released a set of revised guidelines to facilitate the reintroduction of securities borrowing and lending (SBL) in Malaysia. This follows the announcement by Bursa Malaysia Berhad last week that it will allow regulated short selling on the local stock exchange from 3 January 2007.
Under the revised Guidelines on Securities Borrowing and Lending (Guidelines), Bursa Malaysia Securities Clearing is authorised by the SC to be the central lending agency for all SBL activities conducted in Malaysia. It also serves to ensure that short-selling transactions can only be undertaken if accompanied by authorised SBL arrangements.
The revised Guidelines also provide clarification on the tax treatment applicable to SBL transactions.
The issuance of the revised Guidelines complements the rules on SBL and RSS which were released by Bursa Malaysia Berhad on 22 December 2006. Together they form the framework within which SBL and short-selling will be permitted to operate in the Malaysian capital market.
Short-selling activities transacted outside this framework remain in breach of securities laws.
The revised Guidelines, which supersede the earlier Guidelines issued in December 1995, are available here.