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http://203.115.192.58/cms/content.jsp?i ... 0-18d14a04KUALA LUMPUR: Bursa Malaysia will operate on a new securities trading platform from next month, which may also open doors for the local bourse to develop a common trading platform with regional bourses in the future.
Its chief executive officer Datuk Yusli Mohamed Yusoff said Bursa had invested about RM100 million to implement the new trading system for securities and derivatives that would allow market users and investors access to more trading opportunities.
Currently, the country is the first in Southeast Asia to implement the new trading system that is powered by NYSE Euronext Advanced Trading Solutions, the same provider that powered the New York Stock Exchange, he said.
With the robust expansion of the Malaysian capital market, coupled with technology developments and contemporary trends in leading exchanges worldwide, it has become apparent that an advanced trading system is required in order for Bursa Malaysia to not only survive, but thrive, he told the media at a briefing on the Bursa Trade Securities launch here yesterday.
The key features of the new equities trading platform are:-
Theoretical opening price, which allowed investors to have ‘viewing ability’ of the theoretical opening prices for each stock under the pre-opening phase from 8.30am until market opens for trading at 9am, as well as in the second session. The pre-opening price process enables real-time calculation of stock prices for first matching at opening phase.
Theoretical closing price, which would promote natural closing prices for each session.
Trading At Last, in which the last 10 minutes of each session would provide traders the opportunity to close their positions. Matching will take place at a fixed price which will be either the last done price of the theoretical closing price.
Continuous trading, which enables real-time and continuous matching of orders compared with 10 seconds matching under current system.
Five best price limits, which would give investors more control of their trading decisions as opposed to three-best price limits offered under the current system.
Odd Lots Settlement, which allow investors to do partial matching for odd lots, based on price time priority.
Bursa Malaysia COO Omar Merican (left) with Yusli at a media briefing on the Bursa Trade Securities launch in KL yesterday.
Yusli said he was confident that the new trading platform would be operational on Dec 1, but said this would be subject to a successful pre-live implementation on Nov 29.
I trust our stakeholders will take note that there may be a possible but unlikely chance of a trading disruption due to the conversion of our trading system, he said.
Nevertheless, he said if an unexpected disruption should occur before the start of the trading day, Bursa would be able to resume trading within the same day. If a major disruption occurred during the trading day, trading would be expected to resume on the next business day.
What we cannot promise is that, there will not be any glitches on the implementation date. However, we have done sufficient number of tests on the trading platform to make sure we can recover within the stipulated timeframe, Yusli said.
He added that once the trading platform was stable, Bursa would implement the Direct Market Access for equities in six months’ time, which would give investors the access to its trading platform with no manual intervention.
Going forward, he said Bursa would work closely with regional bourses such as Singapore, Thailand, Philippines and Vietnam-based Ho Chi Minh Stock Exchange to develop a common trading platform that would allow investors to trade in each other’s stock exchanges.
It is an Asean initiative to create more accessibility to our investors. We are talking to several Asean stock exchanges but that plan would be worked out in stages over the next few years, he said, adding that Bursa’s talks with the Singapore Exchange had been shelved to make way for this Asean initiative.
Yusli also said the process of unifying the Main and Second boards was still ongoing, and announcements on the plan would be made in the first quarter next year.
In March, the Securities Commission said the Main and Second Board companies would be merged with a set of unified listing requirements by this year-end, which would also pave the way for more emerging companies to seek funding from the Mesdaq market, which will be sponsor-driven.
In a separate interview with Bloomberg yesterday, Yusli also said the slump in trading volumes would continue into next year as the global economic recession deepened.
It’s going to be tough, it’s a global problem, Yusli said. Bursa said last month third-quarter profit slumped 64% from a year earlier as the credit crisis eroded trading volumes.
On a separate matter, Yusli had dismissed the possibility of any occurrence of illegal short-selling in the market. He said as far as the market regulator knew, there could be instances where brokers had mistakenly sold more shares than their investors owned.
There will always be instances where people can make mistakes but in those cases, we will look at it on a case-by-case basis. (But), I don’t think there are any major cases that we are looking at, at the moment, he said.
In July, The Edge Financial Daily reported that JP Morgan may have inadvertently sold short on more than eight million shares of nearly 60 companies, including several counters that were not among the 100-approved securities on Bursa’s regulated short-selling (RSS) list. With Yusli’s response, it would appear that JP Morgan had been absolved of any wrongdoing.
