Kuala Lumpur, 13 April 2017
SC Malaysia to Allow Regulated Short Selling of Corporate Bonds to Boost Bond Market Liquidity
Securities Commission Malaysia (SC) today brought into effect a new guideline to allow the regulated short selling of corporate bonds in the Malaysian capital market.
With the new Guidelines on Regulated Short Selling of Corporate Bonds (Guidelines), Principal Dealers are now permitted to conduct regulated short selling of corporate bonds, expanding the range of bonds that can be short sold.
The Guidelines aim to provide certainty as to the parties who would be permitted to conduct short selling of corporate bonds as well as the requirements involved. Recognising the importance of ensuring market stability, conditions on how regulated short selling of corporate bonds are to be conducted have also been put in place.
This latest initiative is part of the SC’s continuous efforts towards enhancing the liquidity of the secondary bond market while ensuring a comprehensive and facilitative infrastructure and regulatory framework. This is in line with SC’s on-going commitment towards sustaining the overall development and growth of Malaysia’s bond market.
The Guidelines on Regulated Short Selling of Corporate Bonds are available for reference on SC’s website (click here). The Guidelines take effect on 13 April 2017.
SECURITIES COMMISSION MALAYSIA