US derivatives regulator the Commodity Futures Trading Commission (CFTC) has issued a no-action letter, permitting the offer and sale of Bursa Malaysia futures contracts based on the FTSE Kuala Lumpur Composite Index (KLCI).
The KLCI is a broad-based, free-float, market-capitalisation-weighted, composite index of 30 highly capitalised and actively traded stocks currently listed on the main board of Bursa Malaysia. The index provides a performance benchmark for the Malaysian equity market. As of May 17, 2011, the total adjusted market capitalisation of the KLCI was approximately US$265 billion.
US asset managers may trade foreign exchange-traded products through a futures commission merchant that is either a member of the foreign exchange on which that product is listed, or one which has established an omnibus account with a clearing member on the exchange. Such products may also be traded directly through a member of the foreign exchange that has been granted exemptive relief by the regulator.
Malaysia was elevated to Advanced Emerging market status from Secondary Emerging market status in the FTSE Global Equity Index Series on 20 June 2011.
Global index provider FTSE Group first announced Malaysia’s progression to the FTSE Advanced Emerging Market in September 2010 after the country met the Quality of Markets Assessment criteria for the category.
Dato’ Tajuddin Atan, CEO of Bursa Malaysia, said, “This will raise the country’s profile further as FTSE is a major indexing group. FTSE’s recognition highlights the continuous effort and commitment by the government, regulators and market participants to build a market of quality. This will attract more investments from global investors.”
Malaysia joined Brazil, Czech Republic, Hungary, Mexico, Poland, South Africa, Taiwan and Turkey in the Advanced Emerging market category.