Bursa Malaysia Announces Enhancements to ETF Framework

Bursa Malaysia announced amendments to the Main Market Listing Requirements and the Rules and Directives of Bursa Malaysia Securities (collectively “ETF Amendments”).

The ETF Amendments seek to spur the growth of the ETF industry in Malaysia.
 
Among others, the ETF Amendments –

  • Introduce new types of ETF products, i.e. futures-based ETFs, physical commodity ETFs, synthetic ETFs, smart beta ETFs, and leveraged and inverse ETFs;
  • Expand the range of ETFs that may be sold by registered market makers under the Permitted Short Selling framework to include the new types of ETFs products (presently short selling of ETFs is restricted to equity-based ETFs); 
  • Reduce the frequency of interim reporting from a quarterly to semi-annual basis;
  • Enhance the requirements for contents of interim and annual reports for ETFs;
  • Enhance the immediate announcement requirements to promote greater transparency on specific matters affecting ETFs;
  • Introduce the qualifying criteria for investors who wish to trade in leveraged and inverse ETFs.

The new ETF products will also boost range of products available to Digital Investment Managers.
 
The ETF Amendments are issued in tandem with the revised ETF Guidelines announced by the Securities Commission Malaysia on 26 November 20181.
 
The ETF Amendments and the revised ETF Guidelines will take effect on 2 January 2019.
 
Further details of the ETF Amendments are available through the links in Bursa Malaysia’s Media Release –