By the end of this sub unit, you should be able to:
1. Explain the establishment of KLSE and its evolution.
2. Describe the functions of BM.
3. Describe the various product and services offered by BM.
4. Discuss the corporate governance model of BM.
Under Section 15 of the Capital Markets and Services Act 2007, Bursa Malaysia (BM) was approved to be an exchange holding company. It offers a range of services including trading, clearing, settlement and depository services.
The evolution of Bursa Malaysia is reflective of the evolution of the Malaysia in terms of the challenges it faced when it seek to transform itself from an agricultural based economy to an industrial based economy to be one of the competitive capital market financial based economy.
The seccession of Singapore from Malaysia and subsequent cessation of currency interchangeability between Malaysia and Singapore set the pace for Kuala Lumpur Stock Exchange to create an identity of its own and be independent. BM created
its own identity in 1976.
The Capital Market Master Plan unveiled in February 2001, was the beginning of a comprehensive plan mapping the direction of the Malaysian capital market over the next 10 years. It was also the foundation of the changes of the stock exchange in Malaysia after the Asia financial crisis. The Capital Market Master Plan is now at Phase II, which was recently unveiled in 2011 to take the Malaysian securities market to the next level.
BM is still a frontline regulator eventhough it became a holding company while SC is still the monitoring supervisory regulator. BM is the market driven roll out vehicle whilst SC promotes and develops the capital market. BM works hand in hand with SC to achieve the milestones and goals in the Capital Market Master Plan i.e.,:
1. To be the preferred fund-raising centre for Malaysian companies.
2. To promote an effective investment management industry and a more conducive environment for investors.
3. To enhance the competitive position and efficiency of market institutions.
4. To develop a strong and competitive environment for intermediation services.
5. To ensure a stronger and more facilitative regulatory regime.
6. To establish Malaysia as an international Islamic capital market centre.