Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. Malaysia
  4. BURSA MALAYSIA
  5. Bursa Malaysia Berhad
  6. News
  7. Summary
    BURSA   MYL1818OO003

BURSA MALAYSIA BERHAD

(BURSA)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Bursa Malaysia : Securities Enhances Discretionary Trading Framework

07/09/2021 | 02:10pm EDT

On 15 June 2021, Bursa Malaysia Securities Berhad ("Bursa Malaysia") announced amendments to the Rules of Bursa Malaysia Securities ("Rules") and the Directives of Bursa Malaysia Securities ("Directives") to enhance the discretionary trading framework for securities traded on its securities exchange. These amendments will take effect from 30 June 2021.

The following are the main changes to the discretionary trading framework under the amendments to the Rules and the Directives:

New definition of Discretionary Account

The Rules are amended to introduce a new definition of "Discretionary Account", that is, "An account for trades executed by a Participating Organisation on behalf of a Client pursuant to an arrangement where the Client authorises the Participating Organisation to trade on the Client's behalf on a discretionary basis".

Permitted profit sharing or fee arrangement

A Participating Organisation ("PO") or a Dealer's Representative ("DR") may charge a client on either (but not both) of the following bases for the service of operating a Discretionary Account:

  1. accept a share in the profits from the client's Discretionary Account; or
  2. charge a fee calculated based on a percentage of the total value of assets or portfolio managed under the client's Discretionary Account.

Additional responsibilities of participants

Additional responsibilities are imposed on a PO, a DR and the Compliance Office ("CO") of the PO under the Directives.

PO

A PO must ensure compliance with the following:

  1. conduct a readiness audit before it commences discretionary trading;
  2. obtain prior written authorisation from the client before exercising any discretionary authority and maintain comprehensive records of such authorisation;
  3. enter into a written agreement with the client which sets out the terms and conditions for the operation of the client's Discretionary Account;
  4. maintain complete and accurate records of every transaction undertaken under any Discretionary Account, including the details, date and time of the transaction and the name of the DR who executed the transaction;
  5. at all times act in the best interest of the client when operating a Discretionary Account; and
  6. ensure that there is no conflict of interest arising from such transactions.

DR

A DR must satisfy the following criteria before operating a Discretionary Account:

  1. have a minimum of five years' experience in dealing in securities or a minimum of five years' direct experience in fund management; and
  2. have no adverse findings or enforcement proceedings or actions commenced or taken against him under the Rules and the Directives or the securities laws.

PO and DR

A PO and DR must:

  1. open a new trading account and a new securities account for discretionary trading for each client;
  2. ensure that the trading account and securities account are designated as a Discretionary Account, and bear the appropriate account qualifier and description prescribed in the Directives;
  3. comply with the Securities Commission Malaysia's Guidelines on Market Conduct and Business Practices for Stockbroking Companies and Licensed Representatives and the requirements prescribed by Bursa Malaysia in respect of Discretionary Accounts;
  4. comply with the following in operating a Discretionary Account:
    • trading is carried out in the designated Discretionary Account;
    • trading in a Discretionary Account is confined to securities quoted on the Official List;
    • trading in a Discretionary Account must commence with a cash transfer from a client instead of a transfer of securities or other types of collateral in lieu of cash, and must be carried out on a cash upfront basis; and
    • funds in a client's Discretionary Account must be identifiable from the funds in the client's non-Discretionary Account, if the funds are maintained in the same trust account.

CO

The responsibilities of a CO have been modified and are as follows:

  1. ensure compliance with the Rules and the Directives;
  2. review to ensure that prior written authorisation from the client has been obtained;
  3. review to ensure that the PO has entered into a written agreement with the client which sets out the terms and conditions for the operation of the client's Discretionary Account, including adequate and accurate disclosure of the risks involved;
  4. ensure that each discretionary order must be identified as a discretionary order at the time of the entry;
  5. review the trades done in a Discretionary Account regularly;
  6. review to ensure that the PO has at all times acted in the best interest of the client in operating a Discretionary Account;
  7. review to ensure that all discretionary trades are executed within the proper discretionary authority granted to the PO and that such trades are properly recorded;
  8. review to ensure that complete and accurate documentation is maintained for every transaction undertaken under any Discretionary Account; and
  9. review the Discretionary Account transactions to ensure that there is no conflict of interest in the execution of client trades and proprietary trades.

Comments

The main enhancements to the discretionary trading framework lie in the introduction of clear obligations to be complied with by a PO and a DR under the Directives in relation to the operation of Discretionary Accounts. The introduction of the profit sharing or fee arrangements are to be welcomed.

Bursa Malaysia's media release and details of the amendments to the Rules and the Directives are available here, here and here.

Originally published 18 June 2021

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Phua Pao Yii
SKRINE
Level 8, Wisma UOA Damansara
50, Jalan Dungun, Damansara Heights
Kuala Lumpur
MALAYSIA
Tel: 32081 3999
Fax: 32094 3211
E-mail: bdcsupportteam@skrine.com
URL: www.skrine.com

© Mondaq Ltd, 2021 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source Business Briefing

All news about BURSA MALAYSIA BERHAD
09/16DESTINI BERHAD : Appoints CEO and Executive Chairman
MT
09/16T7 GLOBAL BERHAD : Seeks Bourse Approval for Planned Share Placement
MT
09/15TOP GLOVE BHD : Withdraws Hong Kong Listing Application
MT
09/14TECHNA X BERHAD : X Lowers Sale Price of Stake in Subsidiary in Deal Amendment
MT
09/10VEGOILS-Palm oil falls for 2nd day on higher Indonesia, Malaysia supply outlo..
RE
09/09VEGOILS-Palm oil eases before supply and demand data, eyes weekly rise
RE
09/09BURSA MALAYSIA BERHAD : Names Chief Regulatory Officer
MT
09/08Bursa Malaysia Berhad Appoints ENCIK JULIAN MAHMUD HASHIM as Chief Regulatory..
CI
09/08Bursa Malaysia Berhad Announces Cessation of Inderjit Singh Sohan Singh as Ch..
CI
09/08UNISEM M BERHAD : to Close Chip Factory until Mid-September
MT
More news
Analyst Recommendations on BURSA MALAYSIA BERHAD
More recommendations
Financials
Sales 2021 746 M 178 M 178 M
Net income 2021 348 M 83,2 M 83,2 M
Net cash 2021 379 M 90,5 M 90,5 M
P/E ratio 2021 17,1x
Yield 2021 5,38%
Capitalization 5 956 M 1 421 M 1 422 M
EV / Sales 2021 7,48x
EV / Sales 2022 8,22x
Nbr of Employees 566
Free-Float 69,0%
Chart BURSA MALAYSIA BERHAD
Duration : Period :
Bursa Malaysia Berhad Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BURSA MALAYSIA BERHAD
Short TermMid-TermLong Term
TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 15
Last Close Price 7,36 MYR
Average target price 8,93 MYR
Spread / Average Target 21,4%
EPS Revisions
Managers and Directors
Muhamad Umar Swift CEO & Non-Independent Executive Director
Rosidah binti Baharom Chief Financial Officer
Abdul Wahid bin Omar Non-Executive Chairman
Ashish Jaywant Rege Director-Group Technology
Karunakaran Ramasamy Senior Independent Non-Executive Director
Sector and Competitors