Bursa Malaysia Readies Islamic Short-Selling System

Mar 31 2009 | 2:03am ET

Eyeing the growing Shariah-compliant hedge fund market, Malaysia’s stock exchange is readying a platform to facilitate short-selling, which is generally barred by Islamic law.

Bursa Malaysia’s regulated platform would likely involve short-sellers actually buying, rather than borrowing, the shares they are betting against. Islamic law forbids selling things that one doesn’t actually own; the stock market’s plan would have hedge funds and other investors buy the stock for a fraction of its value while simultaneously agreeing to sell it back to the seller at a later date, Reuters reports.

“This will help in bringing in Islamic hedge fund activities,” Bursa Malaysia CEO Yusli Mohamed Yusoff told Reuters. “Short-selling is an essential ingredient for capital markets to perform efficiently.”

Yusoff added that the precise structure of the short-selling system is still “being worked on.”

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...