30 January 2019

In order to improve the framework on exchange-traded funds ("ETFs"), Bursa Malaysia Securities Berhad ("Exchange") amended the following on 7 December 2018 ("ETF Amendments"):

  1. Bursa Malaysia Securities Berhad Main Market Listing Requirements; and
  2. Rules and Directives of the Exchange in relation to ETFs.

The ETF Amendments came into effect on 2 January 2019.

Some of the key ETF Amendments relate to the following:

  • Amendment of interim reporting frequency of ETFs from quarterly to a semi-annual basis;
  • Amendments to  the required contents of ETFs’ semi-annual report and annual report to encourage meaningful and value-add information to unit holders; and
  • Amendment of immediate announcement requirements by ETFs to promote better transparency on specific key matters.

In line with the revised Guidelines on Exchange Traded Funds ("ETF Guidelines") issued on 26 November 2018, the Securities Commission Malaysia has allowed the issuance of a diversified range of ETFs, including future-based ETFs such as leveraged and inverse ETFs, synthetic ETFs, physical commodity ETFs and smart beta ETFs.

The objective of introducing a variety of ETFs is to promote competitive development, to aid product innovation in the market, as well as to offer new investment opportunities and exposure for investors with varying risk appetites. The ETF Guidelines came into effect on 2 January 2019.

In order to facilitate the trading of the new types of ETFs and improve the ecosystem for ETFs, the Exchange has reviewed the Permitted Short Selling framework for Market Makers, and introduced new provisions to regulate trading in Leveraged and Inverse Products ETFs.

 

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