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KUALA LUMPUR: The Securities and Exchange Commission (SC) and Bursa Malaysia have advised Malaysian investors to be wary of social media chat rooms attempting to influence the purchase or sale of certain stocks based on speculation or hearsay.
Regulators said they are closely monitoring the local stock market in light of the current surge in prices of selected stocks in US markets, driven by groups of social media chat rooms moving against sellers in short.
“Investors should also be wary of discussions in these social media chat rooms that can trigger security breaches, such as the provision of investment advice or stock recommendations without a license,” they said today in a joint statement.
Anyone found guilty may be punished with a fine not to exceed RM 10 million or a prison term not to exceed 10 years or both.
In the wake of the GameStop phenomenon in the US, Malaysian retail investors have created a group called BursaBets on the social news aggregator site Reddit to discuss joint action to boost the shares of glove makers, whose prices of gloves Shares had fallen in recent months.
Regulators said the market dynamics were different between the United States and Malaysia.
“In Malaysia, regulated short selling only applies to stocks approved on the RSS (Regulated Short Selling) list, which currently comprises 218 stocks. Limits are also imposed to avoid excessive short selling activities, ”they said.
Additionally, RSS operations require investors to borrow approved securities to sell short or to have confirmation of the loan of approved securities. RSS must be done on a designated account where sell orders must be placed at the best bid price or higher.
Regulators said they also conducted real-time monitoring of all business activities to detect, analyze and escalate business concerns promptly.
“Where necessary, SC and Bursa Malaysia will take the necessary steps to curb disruptive business practices and market abuse,” they said.
Earlier today, the Minority Shareholders Oversight Group warned minority shareholders to act diligently and be aware of the risks involved when hiring institutional investors to short-sell certain shares.
