KUALA LUMPUR: Bursa Malaysia Bhd
is expanding the exchange-traded fund (ETF) framework which will allow permitted short-selling (PSS) of of new types of ETFs from the current equity-based ETFs now.
The stock exchange announced on Friday the revised Guidelines on Exchange-Traded Funds will now allow ETFs which are futures-based, synthetic, physical commodity and smart beta.
It said the ETF amendments will take effect from Jan 2, 2019 onwards.
Bursa said the move would ensure greater business efficacy and reduce the cost of compliance by ETFs.
It would also boost the ETF industry whilst enhancing investor protection and transparency; and facilitating market making activities for all ETFs through the enhanced PSS framework.
This would also allow interim reporting frequency from quarterly to semi-annual basis.
Issuers must also enhance the contents of ETF interim and annual reports arising from the new types of ETF products and their specific requirements to promote meaningful and value-add information to unit holders.
The framework will introduce qualifying criteria for investors trading in leveraged and inverse ETFs.
Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan said the innovative ETF products would be good for the ETF market and should lead to a more vibrant ETF ecosystem.
“The resulting enhancements to the framework complements our ongoing market development initiatives to provide an efficient and effective ecosystem for ETFs as well as diversified product range for our investors,” he said,
“In tandem with this, we are also focusing on investor awareness and education as we believe that this is important for the ETF industry to take off,” he added.
Bursa has been educating investors on ETF for the past few years. It has reached out to over 15,700 investors through 165 ETF workshops and seminars especially over these last two years.