Bursa Malaysia Berhad (Bursa Malaysia) today announced the reintroduction of Regulated Short Selling (RSS) and Securities Borrowing and Lending (SBL) and issued the relevant rules to the Participating Organisations and Clearing Participants.  Both RSS and SBL transactions can be conducted from 3 January 2007.  

The reintroduction of RSS/SBL marks another implementation of the Securities Commission's Capital Market Masterplan's recommendations.

Bursa Malaysia Berhad's Chief Executive Officer, Dato' Yusli Mohamed Yusoff said, "The availability of RSS/SBL provides a new perspective of the Malaysian capital market.  RSS/SBL is in fact acknowledged by domestic and international investors as one of the features of a developed stock market. The reintroduction of RSS/SBL certainly marks a step forward for us to realizing our vision of achieving developed market status."

Dato' Yusli added that through RSS/SBL, Bursa Malaysia hopes to match the needs of issuers with investor requirements and this would contribute to greater liquidity and enhance the overall vibrancy of the Malaysian market.

RSS is defined as the selling of stocks which the person does not presently own but for which such person has made arrangements to borrow.  Any individual can engage in RSS.  The settlement of the short sales will be with the borrowed stocks.  This borrowing must be made within the SBL framework established by Bursa Malaysia Securities Clearing Sdn Bhd ("Bursa Clearing (S)"). 

Under this framework, Bursa Clearing (S) will act as a Central Lending Agency (CLA).  As the CLA, Bursa Clearing (S) will borrow from lenders and onward lend to borrowers.  Any person who has the requisite number of stocks may lend stocks to the CLA.  On the other hand, only approved Participating Organisations may borrow stocks from the CLA.  Any other person who wishes to borrow stocks must go through the approved Participating Organisations.  The lenders and borrowers must enter into an SBL agreement that will set out their rights and obligations. 

The SBL is introduced in stages.  In the subsequent stages, the Exchange will enhance the SBL framework further for all participants. This may include securities borrowing and lending on an over-the-counter basis (OTC) within a framework by Bursa Malaysia in which the terms of borrowing and lending are negotiated between the parties.

Further details as well as the list of the 70 stocks approved for RSS and SBL are available on Bursa Malaysia's website www.bursamalaysia.com.