KUALA LUMPUR (Sept 7): The Securities Commission Malaysia (SC) has issued the revised Guidelines on Market Conduct and Business Practices for Stockbroking Companies and Licensed Representatives.

The revised guidelines, which take effect on Thursday, outline the requirements that would allow stockbroking companies to offer fractional share trading services for shares listed on Bursa Malaysia.

A fractional share is a portion of a stock that is less than one standard board lot.

SC chairman Datuk Seri Dr Awang Adek Hussin said that by allowing retail investors to trade in fractional shares, individuals, particularly the younger generation, would now have increased affordability and flexibility to trade and invest in the more expensive blue-chip stocks at a fraction of the standard board lot value.

“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,” he said in a statement on Thursday.

To support the orderly development of the capital market, Awang Adek noted that it was important for stockbroking companies to have the necessary controls and systems to safeguard the interests of the investors.

Trading of fractional shares was one of the capital market initiatives announced by Prime Minister Datuk Seri Anwar Ibrahim in June this year to make share trading on Bursa Malaysia more accessible, affordable and inclusive for retail investors, particularly the young investors.

“The revised guidelines reflect the SC’s continued commitment to enhance market vibrancy and promote greater retail participation in the Malaysian stock market.

“Among the key requirements under the guidelines is the need for stockbroking companies to implement adequate systems, policies, and procedures,” said the SC.

This is to ensure fair treatment of customers’ orders, price transparency, and proper supervision of fractional share trading services, it added.