Malaysia | SC and Bursa extend temporary margin financing flexibilities

On 28 September 2020, the Securities Commission Malaysia (“SC”) and Bursa Malaysia Berhad (“Bursa”) extended the temporary relief measures relating to margin financing to 31 December 2020. The relief measures, which took effect on 27 March 2020 via Participating Organisations’ Circular No. R/R 6 of 2020, were initially due to expire on 30 September 2020.

The relief measures allow brokers to exercise discretion whether or not to impose force selling measures on clients and accept other types of collateral from investors such as bonds, unit trusts, gold and immovable properties for purposes of margin financing. Previously, brokers were required to automatically liquidate their clients’ margin accounts if the equity value in those accounts falls below 130% of the outstanding balance.

The announcement on the extension is available here.