29 June 2021

On 17 May 2021, Bursa Malaysia Securities Berhad (“Bursa Securities”) issued a new directive introducing the Pilot Market Making Programme for Eligible Stocks (“PMMP”) (“Directive”). The PMMP is a two-year pilot programme which allows eligible market makers for PMMP registered with Bursa Securities (“Stock Market Maker”) to carry out market making activities on the eligible PMMP stocks (“Eligible PMMP Stocks”) with the aim of improving the liquidity and price efficiency of these stocks.

The Directive provides, among other things, that:

  • Parts A (Registration of a Market Maker), B (Obligations of a Market Maker), D (Resignation) and E (Permitted Short Selling) of Chapter 4 of the Bursa Securities’ Rules and the Directive in relation to Market Makers and Derivatives Specialists (No. 4- 001) will apply to the Stock Market Maker;
  • The eligibility criteria of a PMMP stock will be based on, among other things, the stock’s admission to the Official List (i.e. the list of securities that have been admitted by Bursa Securities and/or quoted and traded on Bursa Securities) and the stock having at least 15% free float; and
  • A Stock Market Maker may carry out permitted short selling (“PSS”) on an Eligible PMMP Stock provided that the Stock Market Maker has entered into an agreement to borrow the Eligible PMMP Stocks for the settlement of a short sale prior to commencing PSS.

The participating organisations’ trading manual is also amended to reflect the prescribed time of the requirement for contract rectification for PMMP.