Bursa implements intraday short-selling

Introduction of framework to wider group of investors is timely, says Tajuddin

BURSA Malaysia implemented intraday shortselling (IDSS) for all investors yesterday as part as its initiative to boost market liquidity.

Under the IDSS framework, investors will be able to sell and buy securities within the same trading day.

IDSS can be carried out on a list of 280 securities, which will be reviewed every six months.

“Introducing IDSS to a wider group of investors is timely, considering the growing sophistication of market participants.

“This measure is part of the exchange’s strategy to boost market liquidity and further improves flexibility for market participants to refine their trading and risk management strategies,” said Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan in a statement yesterday.

“The exchange will continue to undertake initiatives to provide a more efficient and facilitative market framework and the introduction of IDSS is set to further advance the exchange’s efforts to build a dynamic and vibrant capital market,” he added.

Industry players have said the move could attract new investors and make the Malaysian bourse more vibrant.

IDSS was previously reserved for a select group of licensed brokers or proprietary day traders because it was deemed to be highly speculative and risky.

Bursa Malaysia said a robust compliance requirement and safeguards had been put in place for IDSS trades.

These include market controls for IDSS suspensions if a stock price falls by more than 15 per cent from the previous day’s closing or if the gross short-selling volume exceeds the daily maximum limit of three per cent of outstanding shares per security.

The framework also specifies compliance obligation requirements for investors before IDSS activities can commence.