Bursa Malaysia Introduces Rule To Facilitate Exchange Traded Bonds And Sukuks

26/09/2012

Bursa Malaysia today introduced the rules to facilitate Exchange Traded Bonds and Sukuks (ETBS) to be listed, and traded on Bursa Securities. This marks the first step towards providing wider access for this asset class to Bursa Malaysia’s investors.

In the past, bonds have been primarily accessible to Institutional and high net worth individuals. With the introduction of these rules, issuers now can list bonds or sukuks on the Bursa Securities market, and thus tap into the liquidity provided by retail investors.

Dato’ Tajuddin Atan, Chief Executive Officer of Bursa Malaysia, expressed the significance of the initiative introduced by Bursa Malaysia Securities Berhad (Bursa Securities) which will promote greater price transparency and disclosure of these instruments to investors especially retail investors :

“The introduction of the Exchange Traded Bonds and Sukuks (ETBS) on Bursa Malaysia complements our goal to offer a diverse range of tradable products on the Exchange. We are creating an environment that provides something for every type of investor. In this case, bonds and sukuks from a wider issuer base will be listed and traded on our Exchange and these complement the diverse selection of stocks, exchange traded funds (ETFs) and REITs already listed on the Bursa Malaysia as well as our complete range of derivatives and futures products.”

ETBS, a project under the National Key Economic Areas (NKEA), is aimed at offering greater choices for investors who are seeking products that yield stable returns with capital protection. Aside from enhancing the diversity of products offered to investors, this initiative is also expected to attract a new segment of investors into the market and provide issuers with greater flexibility in their fund raising exercises.

This initiative is also a big step towards broadening and deepening the bond/sukuk markets, with the advantage of converging a whole spectrum of bond/sukuk market players.

The relevant rule changes to the Listing Requirements, Rules of Bursa Securities and the Rules of Bursa Depository have been made available for reference at the Exchange’s website, www.bursamalaysia.com.

Bursa Malaysia is working with issuers for potential listing and trading and will inform the market accordingly.