Bank Negara Malaysia issues Framework for Electronic Trading Platforms

28 November 2019

On 8 November 2019, Bank Negara Malaysia (“BNM”) issued a policy document titled “Framework for Electronic Trading Platforms” (“policy document”), which is applicable to approved money brokers operating electronic broking platforms and operators of electronic trading platforms. The policy document came into effect on 11 November 2019 and supersedes the Guidelines on Electronic Broking System by Licensed Money Brokers issued on 1 August 2005.

This policy document sets out BNM’s requirements and expectations on market participants who offer services of electronic trading platforms within the Malaysian wholesale financial markets, specifically money and foreign exchange markets. Eligible platform operators are required to obtain BNM’s approval prior to offering their services in Malaysia. Platform operators that wish to offer electronic trading services for securities and instruments other than those specified in the policy document are required to ascertain and obtain the necessary approvals from relevant authorities where applicable.

This policy document sets out the approval requirements for platform operators to be eligible to provide their services on electronic trading platforms in the wholesale financial markets in Malaysia and the internal control requirements applicable to approved platform operators to safeguard the system integrity and data confidentiality of such platforms. In addition, it imposes requirements for approved platform operators to put in place and maintain appropriate internal governance policies and procedures in providing their services.

This policy document does not apply to the following:

  • An operator of a recognised market registered, or a stock market of an approved stock exchange, under the Capital Markets and Services Act 2007 which offers facilities that enable the trading of financial instruments other than in the money market or foreign exchange market;
  • A stock market operated by overseas stock exchange which is under the regulatory or supervisory oversight of the relevant authority, or any facility offered by such stock exchange; or
  • A proprietary single-bank platform offered solely for bilateral transactions undertaken with the bank for financial instruments in the money market or foreign exchange market.

Reference materials

The following materials are available on the BNM website www.bnm.gov.my or by clicking the titles below:

 

Download PDF