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BURSA ANNOUNCES MARGIN RATES AND BUSINESS RULE AMENDMENTS IN RELATION TO SINGLE STOCK FUTURES.
BackApr 26, 2006
26 Apr 2006
BURSA ANNOUNCES MARGIN RATES AND BUSINESS RULE AMENDMENTS IN RELATION TO SINGLE STOCK FUTURES
Bursa Malaysia today announced further details in relation to margin rates and its business rules in preparation for the launch of Single Stock Futures (SSF) on 28th April 2006.
Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia Berhad said, "We are on track to launch Single Stock Futures at the end of this week. We believe SSF will expand the range of investment options available to investors as well as further build liquidity within the derivatives market in Malaysia."
Bursa Malaysia Derivatives Clearing today announced the following Initial Margin rates for its SSFs:
Company | SSF Contract | Margin Rates (RM) |
---|---|---|
AirAsia Berhad | FAIR | 280 |
AMMB Holdings Berhad | FAMM | 460 |
Bursa Malaysia Berhad | FBRS | 940 |
Berjaya Sports Toto Berhad | FBST | 720 |
Genting Berhad | FGEN | 3840 |
IOI Corporation Berhad | FIOI | 2080 |
Maxis Communications Berhad | FMAX | 1360 |
RHB Capital Berhad | FRHB | 380 |
Scomi Group Berhad | FSGB | 200 |
Telekom Malaysia Berhad | FTEL | 1480 |
The list above refers to the Initial Margin for outright positions. Initial Margin is collected from investors before a futures position can be initiated and is a form of collateral or performance bond that will be returned to investors once all open positions are closed(i.e. net of transaction fees, losses and/or any amounts owing to futures broker).
The Initial Margin listed above is the minimum deposit required by the Clearing House. Futures brokers may require more than the minimum margins depending on their risk management policies. Initial Margin may be posted in the form of Ringgit Malaysia (RM), selected foreign currencies, approved stocks or letters of credit. Initial Margin rates are subject to regular review and may be changed by the Clearing House.
Bursa Malaysia Derivatives Berhad (Bursa Derivatives) has amended its Business Rules (the SSF Amendments) in conjunction with the introduction of SSFs to the Malaysian capital market. The changed will take effect from 28 April 2006.
Chief Legal Officer of Bursa Malaysia Berhad, Selvarany Rasiah said, "The SSF Amendments facilitate the trading of SSF on Bursa Derivatives, and contain provisions to ensure an orderly and fair market for trading in futures contracts on Bursa Derivatives. They are part of Bursa Malaysia's continuous effort to develop and maintain a dynamic and robust capital market in Malaysia," Selvarany Rasiah said.
Key Changes
The key changes are as follows:-
- Change of name of Share Futures to SSF;
- Prescription of minimum price for SSF Contract;
- Specification that there is no price limits for SSF Contract;
- Approval of underlying stocks to be used for SSF;
- Methodology of adjustments for cash payment and corporate exercises;
- Imposition of suspension or cessation of trading of SSF;
- Prescription of position limit for SSF;
- Insertion of a new reportable event;
- Contract Specifications of SSF; and
- Trading fees for SSF.