Bursa products and services
Trading on Bursa
Bursa offers trading on its exchange of various forms of financial capital such as shares, fixed Income securities such as bonds, exchange traded funds, warrants, derivatives and syariah compliant stocks. Other than the composite indices, BM has now positioned itself to enable trading of islamic equity indices and other Islamic market products from equities, derivatives, commodities, to debt securities across all sectors and industries in line with its vision to be the preferred or providor of competitive exchange for the Islamic Capital Market.
A secondary financial market requires liquidity and also drive in capital flow in any form of financial instruments.Therefore, a trading platform for trading of securities itself would not suffice. BM, in its listed business model, has to be innovative. Thus, towards the development of capital market in Malaysia and to compete with other matured exchange e.g., New York Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange and Singapore Stock Exchange, BM has introduced other products and services listed below other than trading of Exchange Traded Funds (ETF).
Securities borrowing and lending (SBL)
BM offers Securities Borrowing and Lending (SBL) facility. Currently, there are two models of SBL facility offered:
1. Central Lending Agency (SBLCLA)
The SBLCLA is a model whereby Bursa Malaysia acts as the Central Lending Agency for all SBL transactions between Authorised Lender and Authorised Borrower.
2. Negotiated Transaction (SBLNT)
The SBLNT model provides both Approved Lenders and Approved Borrowers the avenue to agree SBL transactions on an over-the-counter basis (OTC) and reports such transactions to Bursa Malaysia via on-shore lending representatives or borrowing representatives.
Offshore market provides avenue for tax advantages to multinational corporations and investors. To attract foreign investors, a wholly-owned subsidiary of BM i.e., Labuan International Financial Exchange (LFX) Incorporated provides duty free transactions and enables investors to deal with multi-currency financial instruments.
With a web-based exchange, participants in the LFX can access the trading system 24 hours and 7 days a week. It also works as a one-stop financial exchange centre where applications, approvals, listing, trading, clearing and settlements can be done efficiently.
BM maintains a list of authorised Information Vendors which provide real time market information other than itself providing provides (real time or delayed), investor Information and Historical Data Packages. Announcements from listed entities and disclosure under Listing Requirements are made to BM by listed entities.
A company in online trading business or securities houses has to subscribe to realtime information and announcement provided to BM. The following licences would have to be subscribed as partners with BM in those information.
1. Information Services Licence
This licence allows a subscriber to receive, distribute or redistribute Bursa Malaysia equities and derivatives market information in real time, delayed or end of day form.
2. Website Linking Licence
This licence allows a subscriber to establish a link between Bursa Malaysia’s Announcements webpage and the subscriber’s own website.
3. Investor Information Packages
This is a subscription to a selection of information specially packaged for investors.
4. Historical Data Packages
This is a subscription to a selection of Bursa Malaysia historical equities market data packages.
Co-location services (COLO)
High speed trade execution with low network latency is important for expedient trading and matched deals or trades. Bursa Malaysia has made available Co- Location (COLO) hosting services to its Market Participants. COLO hosting allows participants of BM to place their trading equipment within the same physical data centre as BM’s trading equipment. This service is available to participants and their appointed vendors.
Listing on BM
A corporation that wishes to raise its capital in the primary market have various choices. BM faces the challenge of being competitive. The products and services offered in the secondary market create a competitive value-add products and services
for BM to be the preferred partner in Asia for fund-raising, trading and investment activities.
Therefore, BM operates a fully-integrated exchange that offers a comprehensive range of products which includes equities, derivatives, offshore and Islamic products as well as exchange related services such as trading, clearing, settlement and depository services. To date, more than 1,000 companies from a wide range of business sectors have been listed on BM to access public equity financing. A few China based companies have also been listed on BM.
BM is in the position to tap the advantages of the Malaysian Islamic fraternity and network in OPEC. It has evolved to be a recognised leader in Islamic Finance and Investment and have a liquid and well-regulated secondary market in Syariah
Compliant securities and Islamic financial instruments including sukuk.
BM holistically plays a role in the development of Malaysian capital market from the products and servises it offers in the primary and secondary market.
Central depository system (CDS)
Investors who wish to trade in securities listed on Bursa Malaysia must open CDS accounts with Authorised Depository Agents (ADAs), i.e., stockbroking companies. Securities bought will be credited into CDS accounts that the investors have opened. Likewise for securities sold, these securities will be debited from the CDS accounts.
CDS is an acronym for “Central Depository System”. The CDS is a system that is fully-owned and operated by Bursa Malaysia Depository Sdn Bhd (formerly known as Malaysian Central Depository Sdn Bhd), a wholly-owned subsidiary of Bursa Malaysia Berhad.
Investors can use the Central Depository System to transfer securities from one CDS account to another, provided the transfers are within the reasons approved by Bursa Malaysia Depository Sdn Bhd. Other transactions that depositors can perform via the Central Depository System are registering of bank account information, updating of account particulars, reactivation of dormant CDS account, reactivation of inactive CDS account, deposit of share certificate, withdrawal of shares of delisted company and closing of CDS account.