Investors Reminded to Exercise Caution When Participating in Social Media Chatrooms Promoting Specific Stock Trading
29 January 2021  |   Kuala Lumpur

The Securities Commission Malaysia (SC) and Bursa Malaysia Berhad (Bursa Malaysia) are closely monitoring the local stock market in light of the current price surge of selected stocks in the US markets, fuelled by social media chatrooms against short-sellers.

Malaysian investors are advised to be cautious of social media chatrooms that try to influence investors to buy or sell certain stocks based on speculation or rumours. Investors should also be wary of discussions in these social media chatrooms that may trigger securities breaches such as the provision of investment advice or stock recommendations without a licence. Any person found guilty, may be liable to a fine not exceeding RM10 million or imprisonment not exceeding ten years or both.

The market dynamics between the US and Malaysia differ. In Malaysia, Regulated Short Selling (RSS) is only applicable to Approved Securities in the RSS list, which currently comprises 218 securities. Limits are also imposed to prevent excessive short-selling activities.

In addition, RSS trades require investors to either borrow the Approved Securities to be short-sold or have confirmation of borrowing of the Approved Securities. RSS must be undertaken in a designated account where sell orders must be placed at the best offer price or higher.

The SC and Bursa Malaysia conduct real-time monitoring of all trading activities to detect, analyse and escalate trading concerns promptly. Robust frameworks are in place to ensure an efficient, fair and orderly market. Where warranted, the SC and Bursa Malaysia will take the necessary measures to curb disruptive trading practices and market abuse.

SECURITIES COMMISSION MALAYSIA
BURSA MALAYSIA BERHAD

SC-World Bank-IOSCO Asia Pacific Hub Conference 2019: Enhancing Financial Inclusion through Islamic Finance and FinTech
(From left to right):
  1. Abayomi A. Alawode, Head of Islamic Finance, Finance, Competitiveness and Innovation, The World Bank Group
  2. Datuk Syed Zaid Albar, Chairman of the Securities Commission Malaysia (SC)
  3. Dr. Firas Raad, Country Manager for Malaysia, East Asia and Pacific, The World Bank Group 
  4. Datuk Zainal Izlan Zainal Abidin, Deputy Chief Executive of SC
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The Securities Commission Malaysia (SC) was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). We are a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market.

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