Page 78 - SC SCAR 2023 ENGLISH Flipbook

PART 3 STRENGTHENING THE SUSTAINABILITY AND COMPETITIVENESS OF THE CAPITAL MARKET
Bursa Malaysia Derivatives DCE Soybean Oil Futures Contract
On 13 September 2023, the SC also granted approval- in-principal for the introduction of FSOY on BMD. Similar to the FCNH contract, FSOY is based on a licensing agreement with the Dalian Commodity Exchange (DCE) for the settlement price of the DCE’s soybean oil futures contract. This collaboration is the culmination of two years of groundwork and enjoys the support of the China Securities Regulatory Commission (CSRC).
While the price in China is used as a reference, the FSOY contract is standalone and separate and will be traded and cleared at BMD. The proposed introduction of FSOY taps into BMD’s current expertise with edible oils, as the exchange provides the global pricing benchmark for crude palm oil through the Crude Palm Oil Futures (FCPO) contract.
Having both crude palm oil and soybean oil futures on a single exchange would also result in cross margining savings. Further, to attract participants seeking exposure to Dalian’s soybean oil pricing – the contract will be denominated in US dollars, which is an international pricing unit.
ENHANCING THE ATTRACTIVENESS OF THE EQUITY CAPITAL MARKET
In 2023, the SC continued to introduce further measures to enhance the attractiveness of the equity capital market with the introduction of fractional share trading, a new accelerated transfer process to the Main Market and taking measures to safeguard investors’ interest in relation to offerings by the unlisted public companies (UPCs).
Introducing Fractional Share Trading
On 7 September 2023, the SC facilitated the offering of fractional trading on shares listed on Bursa Securities by stockbroking companies. This is part of the SC’s capital market initiatives to improve investors’ accessibility to the domestic stock market and to make investment more affordable for Malaysians.
A fractional share is a portion of stock that is less than one standard board lot. Fractional share trading will allow retail investors, particularly individuals from the younger generation, with low starting capital, to invest in high value stocks. Additionally, these retail investors will have the option to diversify their portfolio, while creating a more inclusive capital market for all Malaysian.
To safeguard the interest of investors, the Guidelines on Market Conduct and Business Practices for Stockbroking Companies and Licensed Representatives was amended requiring stockbroking companies to incorporate the necessary systems, policies, and procedures when offering fractional share trading services. This is to ensure fair treatment of customers’ orders, price transparency and proper supervision of the fractional share trading service.
Accelerated Transfer Process for Transfer from ACE Market to Main Market
In December 2023, the SC had announced an accelerated transfer process to facilitate the promotion of eligible ACE Market listed corporations to the Main Market of Bursa Malaysia. This new framework will take effect on 1 January 2024.
The newly introduced accelerated transfer to Main Market framework is to provide a special pathway to encourage significantly larger and more profitable ACE Market companies with more than RM1 billion market capitalisation to transfer to the Main Market in an expedited manner.
The purpose for the introduction of the accelerated pathway to transfer to the Main Market is to promote the attractiveness of the overall equity market with larger companies listed on the Main Market, and to enable greater access to foreign and local institutional investors for these companies.
The newly simplified and accelerated transfer process should incentivise more companies listed on the ACE Market to make continuous efforts to improve their corporate values and achieve sustainable growth for shareholders.
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SECURITIES COMMISSION MALAYSIA ANNUAL REPORT 2023