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KUALA LUMPUR (December 16): The suspension of restricted short selling (RSS) in Bursa Malaysia will be lifted on January 1 next year, after regulators imposed the penalty for nine months.
However, the regulator extended the ban on intraday short selling (IDSS) and intraday short selling by intraday traders (PDT Short Sale) until February 28, 2021. As a consequence of the sale extension Short PDT, temporary waivers regarding PDT will also run until February 28, 2021.
In short, the Malaysian Securities Commission (SC) and Bursa Malaysia imposed a ban on short selling of shares from March 24 this year, when world markets were hit by the stock slump. The move, regulators said, was “part of their proactive measures to mitigate potential risks arising from increased volatility and global uncertainties.”
The suspension was initially scheduled to end on April 30, but was extended three times. Initially, it was scheduled to end on June 30, but it ran until December 31, 2020 and lasted until February 28, 2021.
“SC and Bursa Malaysia Bhd will lift the temporary suspension of regulated short selling (RSS) and have reviewed other market management measures that were introduced this year following increased market volatility stemming from the broader impact of Covid-19.
“This decision was made after careful consideration of current market conditions and changing market needs,” according to the joint statement by SC and Bursa Malaysia.
He stated that the move to lift the RSS ban is to facilitate investor risk management and revive Securities Lending and Lending (SBL) activities, which is an integral function of the capital market to promote product development and investment. market making activities.
However, RSS will be reintroduced with the following enhanced control measures to ensure stability and maintain investor confidence.
“The daily limit of gross short positions for approved securities will be temporarily reduced from 3% to 2%; and a new limit of 4% will be introduced on RSS’s aggregate net short position, ”the statement showed.
Meanwhile, they said that temporary revisions to existing market management measures – that is, dynamic and static price caps, as well as circuit breaker – will run until May 30, 2021. They were implemented on July 20. 2020 and will expire on January 18, 2021.
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