Progress is being made on the setting up of the Brunei stock exchange, which will cater to the needs of Muslim investors.

Currently authorities are in the process of drafting rules and regulations, including those to deter market abuse and the speculative nature of trading.

Once ready, all companies will have the opportunity to be listed, provided that they are able to meet the requirements.

This was revealed by Autoriti Monetari Brunei Darussalam (AMBD), while responding via email to questions from the media regarding the country's first stock exchange.

The questions, and AMBD's responses, are as follows:

What will the characteristics of Brunei's stock exchange be?

The aspiration is for the characteristic features of the Brunei Securities Exchange to be unique to Brunei Darussalam.

Fundamentally, the vision of the exchange is to be simple in terms of design and yet have comprehensive rules based on international standards and best practices, to cater for various investment products.

All companies will have the opportunity to be listed, provided that they are able to meet the listing rules of the exchange.

In addition, a core objective of the exchange is to provide for the needs of Muslim investors.

Sukuk, being one of the common types of Syariah-compliant securities, may be among those listed on the Exchange.

How would the stock market help to diversify the local economy?

Capital markets, including equity and debt markets, play a central role in promoting economic activity through facilitating and diversifying the companies' access to finance. The launch of a securities exchange in Brunei Darussalam is expected to catalyse economic growth and business expansion through the enabling of alternative funding routes to Bruneian businesses. Moreover, a securities market will also allow Brunei Darussalam to take part in Asean exchanges. Not only will the development of a national securities market in Brunei Darussalam facilitate regional integration, expand the country's capital markets platform and trigger greater foreign investment opportunities, the securities exchange is also aligned to the national strategy to diversify the economy, apart from oil and gas industry.

How can local or international financial institutions play a role in the local stock exchange?

As with other securities exchange enabling ecosystems, there will be opportunities for local and international financial institutions to play a role, for example as market participants such as dealers, brokers, market analysts, investment advisers and underwriters. Financial institutions may also take part as institutional investors, for example, fund operators may invest in companies or securities listed on the securities exchange.

Additionally, with the development of the exchange, it is also expected that ancillary services such as legal firms, audit firms and corporate secretaries will be providing support for companies listed on the exchange.

Will it be modelled on any international bourses?

At present, there is no specific model that the proposed stock exchange will follow. However, in developing and establishing the exchange, we have studied different exchanges both regionally and internationally.

How would it answer the basic Islamic questions? Would Sukuk be traded in the stock market?

The exchange aims to provide for the needs of Muslim investors. Sukuk, being one of the common types of Syariah-compliant securities, may be listed on the Exchange.

Are there any plans to prevent the speculative nature of trading?

The nature of trading will depend on each individual, so it is very crucial to have continuous investor education and awareness programmes, which will be conducted by both the exchange and the market players, in particular on trading, to the general public.

Furthermore, the legal and regulatory framework provides for measures to deter market abuse.

What types of companies are going to be listed? What are the requirements, so that local companies can take proper preparation to be listed?

All companies will have the opportunity to be listed, provided that they are able to meet the listing rules of the exchange. The requirements are still currently being studied and prepared.

What is the current status of the Brunei stock exchange? How much progress has been made?

Progress on the setting up of the Brunei stock exchange continues to be made, including preparation of the necessary rules for the stock exchange.

When is it expected to be ready for use?

The exchange will be ready once all infrastructures, including the relevant rules and systems as well as the resources, are in place. As with other large-scale national projects, the stock exchange project needs not only proper planning but also a good execution in order to produce long-lasting positive outcome and to ensure its viability and sustainability.

Once ready, what will its name be?

This has yet to be confirmed.

Source:
@BRUDIRECT.COM

by BruDirect.com

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