The Securities Commission Malaysia (SC) and Bursa Malaysia Berhad (Bursa Malaysia) will uplift the temporary suspension of Regulated Short Selling (RSS) on January 1, 2021 and have reviewed other market management measures that were introduced this year following heightened market volatility arising from the broader impact of COVID-19.
The decision was taken after careful consideration of current market conditions and the evolving needs of the market.
The suspension of RSS, scheduled to expire on 31 December 2020, will be uplifted to facilitate investors’ risk management and revive Securities Borrowing and Lending (SBL) activities, which is an integral capital market function to promote product development and market making activities.
The RSS will be reintroduced with the following enhanced control measures to ensure stability and maintain investor confidence:
- The daily gross short position limit for Approved Securities will be temporarily reduced from 3% to 2%
- New cap of 4% on RSS aggregated net short position will be introduced
Meanwhile, the temporary suspension on Intraday Short Selling (IDSS) and intraday short selling by Proprietary Day Traders (PDT Short Sale) due to expire on 31 December 2020 will be extended to 28 February 2021. Consequential to the extension of PDT Short Sale, temporary waivers in relation to PDT will be extended to 28 February 2021.
The temporary revisions to existing market management measures, namely the dynamic and static price limits as well as the circuit breaker, will be extended to 30 May 2021. These were implemented on 20 July 2020 and are due to expire on 18 January 2021.
In addition, the temporary relief measures and flexibilities relating to margin financing, which are due to expire on 31 December 2020, will be extended to 30 June 2021. The SC and Bursa Malaysia will continue to closely monitor ongoing domestic and global developments, and take a pro-active approach in implementing appropriate measures that support a fair and orderly market.