Bursa Malaysia to offer multi-currency trading to widen investment options

Bursa Malaysia to offer multi-currency trading to widen investment options


Bursa Malaysia announced that its multi-currency securities framework that will support listing, trading, clearing and settlement of securities in non-Ringgit will be ready for implementation on 13 July 2009. This new framework will then be able to support primary non-Ringgit listings or cross-listings from other stock exchanges.

Chief Executive Officer of Bursa Malaysia Berhad, Dato’ Yusli Mohamed Yusoff said, “This new multi-currency platform is yet another of the Exchange’s initiatives to expand its accessibility to attract more issuers and investors to our capital market. Investors will find the new platform which can offer a range of non-Ringgit listing and product options, effective in diversifying their investment portfolio especially those who are looking into foreign denominated assets.”

He said that the implementation of the multi-currency securities framework will also be able to support the growing interest amongst domestic and foreign issuers to list Asian regional Exchange Traded Funds (ETFs) in a common global currency such as US Dollar or Euro.

Dato’ Yusli added, “ETF issuers are becoming more enthusiastic about cross-listings as a strategy to grow their assets under management. Their interest has also expanded to cover regional ETFs. Through the multi-currency platform, we are pleased to be able to support the offering of non-Ringgit ETFs on Bursa Malaysia such as that considered by BNP Paribas Investment Partners.”

Mr. Bruno Lebeda, BNP Paribas Asset Management Head of Structure, Indexed and Asset Allocation in Asia, said, “We are pleased to leverage on the multi-currency platform to offer our first US Dollar ETF which is expected to be launched in the third quarter of this year. It will be the first of its kind in Malaysia and I hope that it will be the first in a series of ETFs that BNP Paribas Investment Partners will bring to Malaysia.”

The availability of this multi-currency platform will also be able to promote the potential for regional linkages which involves settlement in common currencies. Apart from foreign denominated ETFs, the platform can also support the listing of any type of securities in non-Ringgit.

Investment in multi-currency securities allows for better diversification and hedging. Exporters could leverage on this by equitising their foreign currency holdings into non-Ringgit securities. Although trading in multi-currency securities is opened to all investors, they are required to comply with Bank Negara Malaysia’s (BNM) Foreign Exchange Administration policy as multi-currency securities are deemed foreign currency assets. Similarly, issuers seeking to offer non-Ringgit securities on Bursa Malaysia would require prior approval from BNM.

The rules and related FAQs in relation to the multi-currency securities are available for reference on Bursa Malaysia’s website at www.bursamalaysia.com.