KUALA LUMPUR (Aug 14): Starting tomorrow, proprietary day traders will be allowed to deal in both securities and derivatives on Bursa Malaysia based on their business model, activities and risks.

This is part of the revamped rules and directives of Bursa Malaysia Derivatives Bhd and Bursa Malaysia Derivatives Clearing Bhd, which were issued on June 28.

The revamped rules also see a more liberalised regulatory framework. For instance, the client onboarding requirements have been liberalised where trading participants can now introduce various non face-to-face methods for them to verify individual clients’ identity for account opening.

"With the revamped rules, trading and clearing participants on Bursa will be able to reduce their cost of doing business and provide better services to their clients, while strengthening their governance framework and providing better investor protection," said Bursa Malaysia Bhd in a statement today.

Bursa has also removed the requirement for trading participants to maintain a voice logger for client orders. "This will ease their operational and administrative burden, apart from reducing costs of doing business and facilitating the mobility of registered representatives," it added.

Registered representatives can also now advise their clients and conduct dealing outside of their business premises.

"With such mobility, trading participants and registered representatives may now manage and operate their business more effectively and provide better services to clients," said Bursa.

Bursa has also strengthened governance framework for the participants by introducing new requirements for the participants’ risk management and internal audit functions.

These include a requirement to have the relevant committees overseeing these functions and requiring the registration of a head of dealing for greater accountability in a trading participant’s front office.

"The flexibility and liberalisations put in place under the revamp will enhance the attractiveness and
competitiveness of the Malaysian derivatives market.

"At the same time, it is Bursa’s hope that through this revamp, the standards for conduct and governance of the participants will be elevated and consistent with the equities market, where appropriate," it added.