News
Bursa Malaysia and FTSE Group sign agreement to create indices for Malaysian market
BackJan 13, 2006
| General Announcement Reference No BM-060112-58939 |
| Company Name | : | BURSA MALAYSIA BERHAD |
| Stock Name | : | BURSA |
| Date Announced | : | 12/01/2006 |
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| Type | : | Announcement |
| Subject | : | Bursa Malaysia and FTSE Group sign agreement to create indices for Malaysian market |
Contents :
With reference to the announcement dated 22 June 2005, we are pleased to announce that Bursa Malaysia Berhad ("Bursa") and global index provider FTSE Group ("FTSE") today signed a Co-operation Agreement ("this Agreement") to create a new series of equity indices ("New Indices") for Malaysia.
Under this Agreement, Bursa and FTSE ("the Parties") collaborate to develop and promote a series of domestic indices, customised indices and products for the equities market in Malaysia that will become the preferred choice for trading and benchmarking for institutional and retail funds, exchange traded funds and derivative contracts in Malaysia and other markets. The new indices will be designed using international standards and will be free float adjusted. In addition, the Parties also collaborate to create an Islamic index series for the Malaysia market and explore the feasibility of a wider co-operation including on the creation and promotion of Islamic or Syariah indices.
This Agreement is for a period of 5 years commencing from the date of this Agreement ("Initial Period") and thereafter shall automatically renew for further successive periods of 2 years each on the same terms and conditions, unless terminated on 12 months' prior written notice by either party to take effect at any time after the expiry of the Initial Period.
The New Indices shall be managed and calculated by FTSE in accordance with a set of ground rules written by FTSE and approved by Bursa. The FTSE/Bursa Indices Advisory Committee shall convene every 6 months to undertake a review of the New Indices including:
(a) feedback on the performance of the New Indices and the application of the ground rules in relation thereto; and
(b) suggested changes and improvements to the New Indices and/or ground rules.
FTSE will monitor the corporate activity in the constituent stocks of the New Indices and where necessary make appropriate adjustments to the New Indices. In addition FTSE will also, in consultation with Bursa, create data products and/or customised indices on the New Indices. A service level agreement shall further be agreed upon by the Parties to ensure the accurate and consistent maintenance of the New Indices.
The series of New Indices is expected to go live by the end of March 2006. Full details including ground rules, constituents and historical performance information will be announced when the series goes live.
All net revenue received in relation to the licensing of the New Indices and any product or services derived from the New Indices in accordance with the terms of this Agreement will be divided between the Parties equally. Nevertheless, the New Indices will not have any material impact on the earnings of Bursa. The New Indices will in due course replace all the existing Bursa Malaysia indices with the exception of the Kuala Lumpur Composite Index ("KLCI"). The KLCI will continue to be in existence alongside the New Indices.
This announcement is dated 12 January 2006.