Securities Commission Publishes Revised Guidelines To Offer Fractional Share Trading Services

Alex Cheong Pui Yin

8th September 2023 - 2 min read

The Securities Commission Malaysia (SC) has published the revised Guidelines on Market Conduct and Business Practices for Stockbroking Companies and Licensed Representatives (SBC Guidelines). Effective immediately, it outlines the requirements that would allow stockbroking companies to offer fractional share trading services for shares listed on Bursa Malaysia.

Key requirements that were highlighted in the revised guideline include the implementation of adequate systems, policies, and procedures to ensure that investors have a clear understanding of the services that they are tapping into. Details of these implemented policies and procedures must also be submitted regularly to the SC for monitoring. You can find the full list of requirements in the revised SBC Guidelines here.

The publication of the SBC Guidelines is a follow-up to Prime Minister Datuk Seri Anwar Ibrahim’s announcement back in June 2023, which enabled fractional trading for investors who are trading on the local bourse. This essentially means that you can now buy shares in less than one standard board lot, as opposed to the previous practice which requires you to trade in full board lots.

By allowing fractional trading, the government hopes to make share trading more accessible and affordable – especially for young retail investors – and to promote greater retail participation in the Malaysian stock market. Investors may also be more interested to trade as they will now have more flexibility to invest in the more expensive blue-chip stocks.

“In addition, the introduction of fractional share trading would allow retail investors to diversify their portfolio, whilst creating a more inclusive capital market for all Malaysians,” said the chairman of the SC, Dato’ Seri Dr Awang Adek Hussin, who stressed as well that this must be done in line with the implementation of the necessary controls and systems. This is so that the interest of the investors are also properly safeguarded.

(Source: Securities Commission Malaysia)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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