What is Bursa Malaysia Derivatives Local Participant?

Recently, Bursa Malaysia launched its Derivatives Local Participants Recruitment Drive to have more derivatives traders, so that a more vibrant and dynamic derivatives market can be seen in Malaysia. Anyway, what is it actually? I guess many of us, either yourself or investors or traders, also doesn't know the exact answer...

Again, it's time for Finance Malaysia to do Bursa Malaysia a favor to educate the public. A Local Participant (Locals) is a professional derivatives trader who trades for his/her own account. In essence, a self-employed trader. With the recent easing of entry requirements, those who aspire to be a Local Participant are not required to pass the licensing examination, show the relevant academic qualification and industry experience.

What is the benefits of being a Locals?

Locals have grown alongside the Exchange over the years, both in terms of numbers and trading participation in derivatives products. As a proprietary trader, they have unlimited trading potential. They trade as a business and have the option of working flexi-hours from anywhere. Locals also enjoy exchange fee rebates and tax abatement on their income such as below:

• A Local Participant will enjoy exchange fee and clearing fee incentives if he trades 1,000 contracts per month or more. 
• A Local Participant will receive a 50% tax abatement on income derived from derivatives trading.

What are the differences between the current and previous admission requirements of a Local Participant?

Effective 3 January 2012, the following  admission requirements of a Local Participants have been removed :- 

1. Have passed an examination approved  by BMDB or have  been granted an  exemption in respect thereof; 
2. Possess such qualification as approved by BMDB; and 
3. Possess sufficient and relevant trading experience.

In substitution of the above admission requirements, an applicant needs to attend a two-day familiarization programme conducted by BMDB.   

What are the products offered by BMDB for Local Participants?

BMDB offers a range of derivatives products for Local Participants, which include the two (2) key products, namely, Crude Palm Oil Futures ("FCPO") and FTSE Bursa Malaysia KLCI Futures ("FKLI").

Click here to download the "Local Participants Application Form"

Source: www.bursamalaysia.com