KUALA LUMPUR, Aug 4 — The Securities Commission (SC) and Bursa Malaysia today announced the introduction of securities borrowing and lending negotiated transaction (SBLNT), an enhanced securities borrowing and lending (SBL) model that offers an option to borrow and lend on an over-the-counter (OTC) basis.
In a joint statement here today, the SC and Bursa Malaysia said the SBLNT model would be implemented on August 17 and relevant participants would be able to submit applications now.
They said the model would complement the existing SBL Central Lending Agency (SBL CLA) model which was introduced in January 2007 as the first phase of the securities borrowing and lending framework.
“Under the SBLNT framework, any eligible person who is approved by Bursa Malaysia Securities Clearing Sdn Bhd may borrow and lend securities.
“The lender and borrower are now given the flexibility to enter into SBL agreements, hence they can negotiate and agree on the terms of borrowing and lending directly,” they said.
These SBL transactions, they said, must be reported via onshore borrowing and lending representatives and facilitated through Bursa Malaysia Securities Clearing as the approved clearing house.
“This reporting is imperative for the movement of the loaned securities to take effect from the lender’s depository account to the borrower’s depository account.
“In addition, only securities that are specified by the approved clearing house are eligible for borrowing and lending transactions and the purposes for which the borrowing and lending have also been specified,” they said.
The statement said the SBLNT framework would also enable Bursa Malaysia Securities Clearing to ensure orderly and transparent borrowing and lending.
Besides that, the SC also released the revised SBL Guidelines while Bursa Malaysia issued the relevant rules, procedures and guidelines to provide for SBLNT.
In the SBL CLA model, Bursa Malaysia Securities Clearing acts as the central lending agency for all SBL activities conducted in Malaysia and participants need to comply with the terms and conditions as directed by Bursa Malaysia Securities Clearing.
Both the current SBL CLA and the new SBLNT models will operate concurrently.
The revised SBL Guidelines by SC also provide clarification on the tax treatment applicable to SBLNT.
The revised SBL Guidelines and rules are available on the SC website at www.sc.com.my as well as Bursa Malaysia website at www.bursamalaysia.com. – Bernama
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