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Bursa Malaysia •
Annual Report 2015
Since its inception, Bursa Malaysia’s circuit breaker has only been triggered
once in 2008. It is tested regularly as part of the Exchange’s Business
Continuity Test. The mechanism remains a relevant and effective control
measure for market integrity in Bursa Malaysia and contributes to the
resilience of our marketplace.
PRICE LIMITS MECHANISM
Bursa Malaysia has always enforced Static Price Limits as the market
safeguard. Static Price Limits prescribe the maximum fluctuation in price
for a trading day of a stock.
Static Price Limits Range
Reference Price
Static Price Limits Range
BELOW RM1.00
+/- RM0.30 FROM THE REFERENCE PRICE
RM1.00 AND ABOVE
+/- 30% FROM THE REFERENCE PRICE
This safeguard ensures a fair and orderly marketplace for the investors.
In addition to the wider Static Price Limits, Dynamic Price Limits (at stock
level) mechanismwas introduced in 2013 as an additional market safeguard.
This brings Bursa Malaysia in line with international best practice as it is
also being practiced by other exchanges such as in Australia, UK and US.
The Dynamic Price Limits provide upper and lower thresholds in percentage
or absolute terms that are actively updated in response to price changes.
This mechanism increases the sensitivity of the market safeguard to
respond to sudden price fluctuations, which may suggest disorderliness in
the trading of the stock.
Dynamic Price Limits Range
Last Done Price
Dynamic Price Limits Range
BELOW RM1.00
+/- RM0.08 FROM THE LAST DONE PRICE
RM1.00 AND ABOVE
+/- 8% FROM THE LAST DONE PRICE
The mechanism is designed to address potentially disruptive orders
without interrupting regular orders during trading. When an incoming order
attempts to match an existing order at a price outside the Dynamic Price
Limits range, the incoming order will be purged without disrupting the
matching of other regular orders.
The Dynamic Price Limits of the stock can be revoked and suspended for
10 minutes upon request in the event that an investor wishes to have the
orders matched at a price outside of the range. To ensure transparency, the
marketplace will be duly informed prior to the revocation.
In recognising the importance of closing price, the Exchange instituted
Last Price Limits in 2014. While Dynamic Price Limits are set to manage
erratic volatility in price during continuous trading phase, Last Price Limits
managed the closing price by regulating the theoretical closing price and
order entry during the pre-closing phase.
Last Price Limits Range
Last Done Price
Last Price Limits Range
BELOW RM 1.00
+/- RM0.08 FROM THE LAST DONE PRICE
RM1.00 AND ABOVE
+/- 8% FROM THE LAST DONE PRICE
In the absence of a current last done price, a reference price will be used
instead. All unmatched orders from the continuous trading phase will be
carried forward to the pre-closing phase. Any new orders during the pre-
closing phase is required to fall within the Last Price Limits range. This
mechanism will ensure that the closing price is determined in a fair and
orderly manner.
IMPROVING EFFICIENCY WITH TECHNOLOGY
The technological requirements of our marketplace have grown in tandem
with the expansion of our regional and global presence. Technology has
become indispensable in enabling market access, facilitating efficient
settlements and protecting the data and security of our market participants.
We are proud to report that we maintained a 100% uptime for all three
of our markets in 2015, while making upgrades that will ensure greater
efficiency and protection. These changes include:
• Replacing Bursa LINK
We replaced our existing Bursa Link infrastructure to increase efficiency
and provide enhanced functionalities to the listed issuers. The new
system optimises business processes with enhanced functionalities
for data submission through web browsers. The new system also
facilitates online listing applications to help Bursa Malaysia better
serve its clients. Arising from this, all paper based applications by
listed issuers have been replaced with online applications.
MARKETPLACE REPORT:
FAIR AND ORDERLY MARKET