Bursa Malaysia enhances ETF framework

07 Dec 2018 / 13:09 H.

KUALA LUMPUR: Bursa Malaysia Bhd has made several enhancements to the exchange-traded fund (ETF) framework under the Main Market Listing Requirements and Bursa Malaysia Securities Bhd rules and directives that will help spur further growth of the ETF industry in Malaysia.

With the revised guidelines, a wider variety of ETFs such as futures-based ETFs, synthetic ETFs, physical commodity ETFs and smart beta ETFs, can now be issued.

The amendments will take effect from Jan 2.

The key amendments include liberalising the interim reporting frequency from quarterly to semi-annual basis; enhancing the contents of ETF interim and annual reports arising from the new types of ETF products and their specific requirements to promote meaningful and value-add information to unit holders.

They also include enhancing immediate an-nouncement requirements to promote greater transparency on specific key matters; introducing qualifying criteria for investors trading in leveraged and inverse ETFs; and expanding the permitted short-selling framework to new types of ETFs.

Currently, under the PSS framework, short-selling is only applicable to equity-based ETFs.

Bursa Malaysia CEO Datuk Seri Tajuddin Atan said the introduction of innovative ETF products is a welcome development for the ETF market, and should lead to a more vibrant ETF ecosystem. The resulting enhancements to the framework complement its ongoing market development initiatives to provide an efficient and effective ecosystem for ETFs as well as diversified product range for investors.

“We are also focusing on investor awareness and education as we believe that this is important for the ETF industry to take off.”


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