September 26, 2012 / 10:37 AM / 5 years ago

Bursa Malaysia introduces rules to spur trade in bonds, sukuk

KUALA LUMPUR, Sept 26 (Reuters) - Malaysia’s stock exchange operator has introduced new rules to allow non-listed issuers to list and trade conventional and Islamic bonds, or sukuk, in an effort to attract more retail participation for the fixed income market.

“We are creating an environment that provides something for every type of investor,” Bursa Malaysia Chief Executive Tajuddin Atan said in a statement on Wednesday.

The Exchange Traded Bonds and Sukuks (ETBS) rules include reporting and disclosure requirements to safeguard investors.

This move will provide retail investors another asset class to further diversify into, while issuers are provided more flexibility in their options for fundraising.

The new rules follow the launch of a framework by the Securities Commission earlier this month to give retail investors direct access to sovereign bonds and sukuk.

Investors are now able to invest in bonds and sukuk on the exchange or over-the-counter through appointed local and foreign banks. They were previously only able to invest through unit trust funds and exchange traded funds.

In the past, access to these instruments was limited primarily to institutional and high net-worth retail investors. (Reporting By Al-Zaquan Amer Hamzah)

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