Malaysia extends short selling ban till year-end
30 June 2020 Kuala Lumpur
Image: 9wooddy/Shutterstock.com
The Securities Commission Malaysia and Bursa Malaysia Berhad have decided to further extend their temporary suspension of short-selling to 31 December.
Malaysia’s blanket ban on short selling began on 24 March in response to the COVID-19 pandemic-induced market disruption and was originally set to expire in April, but was extended until 30 June.
The decision to extend the ban again reflects continued attempts to mitigate the risks from heightened volatility due to the COVID-19 pandemic.
There will not be any change to the scope of the suspension, in that it applies to intra-day short selling and regulated short selling, as well as intra-day short selling by proprietary day traders.
Permitted short selling will not be affected by the temporary ban as it is necessary for market makers to market the relevant securities such as exchange-traded funds efficiently.
Elsewhere in Asia, Taiwan’s Financial Supervisory Commission (FSC) recently revoked its ban 10 days earlier than planned due to calmer trading conditions following extreme volatility caused by the spread of COVID-19 in February and March.
The ban was expected to remain in place until 19 June but was removed early to reflect the fact that the COVID-19 outbreak in the country is now under control and the consequential impact of markets has also significantly reduced, according to the Securities and Futures Bureau deputy director-general Tsai Li-ling.
Meanwhile, South Korea, and Indonesia are maintaining their own bans for now. South Korea’s curb on short selling, which affects all traded securities, is due to expire on 16 September, whereas Indonesia is yet to define a timeframe for its ban.
Malaysia’s blanket ban on short selling began on 24 March in response to the COVID-19 pandemic-induced market disruption and was originally set to expire in April, but was extended until 30 June.
The decision to extend the ban again reflects continued attempts to mitigate the risks from heightened volatility due to the COVID-19 pandemic.
There will not be any change to the scope of the suspension, in that it applies to intra-day short selling and regulated short selling, as well as intra-day short selling by proprietary day traders.
Permitted short selling will not be affected by the temporary ban as it is necessary for market makers to market the relevant securities such as exchange-traded funds efficiently.
Elsewhere in Asia, Taiwan’s Financial Supervisory Commission (FSC) recently revoked its ban 10 days earlier than planned due to calmer trading conditions following extreme volatility caused by the spread of COVID-19 in February and March.
The ban was expected to remain in place until 19 June but was removed early to reflect the fact that the COVID-19 outbreak in the country is now under control and the consequential impact of markets has also significantly reduced, according to the Securities and Futures Bureau deputy director-general Tsai Li-ling.
Meanwhile, South Korea, and Indonesia are maintaining their own bans for now. South Korea’s curb on short selling, which affects all traded securities, is due to expire on 16 September, whereas Indonesia is yet to define a timeframe for its ban.
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