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KUALA LUMPUR (September 28): The Malaysian Securities Commission (SC) and Bursa Malaysia Bhd said today that they have extended temporary relief measures related to margin financing for equities until December 31, 2020, to maintain stability in the market amid the continuous uncertainties that arise. of the Covid-19 pandemic.
According to today’s regulators ‘joint statement, the flexibilities granted under the relief measures will allow brokers to better manage their clients’ margin financing facilities.
“The relief measures, which went into effect on March 27, 2020, will expire on September 30, 2020,” SC and Bursa said.
“During this interim period, brokers may continue to exercise discretion on whether or not to impose forced sale measures on clients and accept other types of guarantees from investors, such as bonds, unit trusts, gold and real estate for financing purposes of margin.
“Previously, brokers were required to automatically liquidate their clients’ margin accounts if the equity value in those accounts falls below 130% of the outstanding balance.
“These temporary measures are subject to the brokers complying with their own capital adequacy ratio and shareholder funds as required by Bursa Malaysia. They are also expected to exercise discretion in accordance with their own credit risk policies.
“Both SC and Bursa Malaysia will continue to monitor developments in the securities market and assess the adequacy of existing measures to support an orderly market and mitigate potential risks,” they said.
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