The Bursa Malaysia will permit short-selling of all types of exchange-traded funds (ETFs) from January 2.
The stock exchange formerly allowed only equity ETFs to be shorted. Under the new rules, futures-based, commodity and smart beta ETFs will be among the instruments that investors can use for speculation and to hedge to their risks by short selling.
Tajuddin Atan, chief executive of the exchange, said the growth of innovative ETFs on the bourse was helping to create a more “vibrant” ecosystem.
ETF companies in the region are hoping the new rules will spur more investor interest in ETFs, which are widely used in the US and Europe but which are still relatively undeveloped in Asia outside of Japan.
The ten ETFs listed on the Bursa Malaysia have combined assets worth about $500 million.
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