This article first appeared in The Edge Financial Daily on February 15, 2018

KUALA LUMPUR: The stamp duty waiver on trading of shares of mid- and small-cap companies announced recently will apply to firms with a market capitalisation of between RM200 million and RM2 billion as at Dec 31, 2017.

This was stated by the Securities Commission Malaysia (SC) and Bursa Malaysia Bhd in a statement yesterday, outlining the operational details of measures announced on Feb 6 aimed at boosting the vibrancy and liquidity of the equity market.

The measures, announced by Prime Minister Datuk Seri Najib Razak, also include a six-months waiver on trading and clearing fees for new individual investors, liberalisation of margin financing rules, and permitting intraday short selling.

The SC and Bursa said the stamp duty waiver is for three years from March 1, 2018 to Feb 28, 2021, and the list of companies eligible would be reviewed annually and determined as at Dec 31 every year.

The regulators said the six-month fee waiver is only for first-time investors who open a central depository system account with a participating organisation and undertake trading between March 1 and Aug 31 this year.

As for the the liberalisation of margin financing rules, the regulators said the current 200% limit of the effective participating organisation’s shareholders’ funds will be removed.

In the case of intraday short selling, the SC has approved its framework while Bursa is putting in place the necessary rule changes and system enhancements.

“The exchange is targeting to launch the framework in the second quarter of 2018,” they said.

The two regulators said further details on the introduction of trading specialist and the implementation of the market corridor between Malaysia and Singapore would be released in due course.

Except for the intraday short selling, all the measures, together with the introduction of a volume-based incentive, would be effective on March 1.