Professional Documents
Culture Documents
CONCEPTS OF DERIVATIVES
Source: Rosalan Ali, Noryati Ahmad, Ho Soke Fun, (2007), “Introduction to Malaysian
Derivatives”, UPENA UiTM
Topic Outline
2.1 History and Development
2.2 Definition and Purpose
2.3 Participants
HISTORY & DEVELOPMENT
• Malaysian derivatives market includes the
trading of forward, futures, options and swaps
• MoF is the controller of Malaysian Derivatives
market
• Securities Commission is the regulator, BMDB
is the operator of the exchange
• BMDC is the clearinghouse – refer Bursa
Malaysia Regulatory Structure
HISTORY & DEVELOPMENT
• Msia joined derivative trading with the launch of
crude palm oil futures traded at the KLCE in Oct
1980.
• Thereafter, also trades agro based commodities
(rubber, tin and cocoa)
• 1995, trades in KLCI futures at KL Options and
Financial Futures Exchange(KLOFFE)
• 1996, KLIBOR was launched at the Malaysian
Monetary Exchange (MME)
• Trading futures at KLOFFE and MME regulated by
SC under MOF and cleared by MDCH
*Roles of Securities Commission-find out!
HISTORY & DEVELOPMENT
• Dec 1998, KLCE and MME were merged to form
Commodities and Monetary Exchange(COMMEX)
• Jan 1999, KLOFFE to be under management of
KLSE
• May 2001, KLOFFE and COMMEX merged known
as MDEX
• March 2002, Bond futures contract (MGS)
launched
• 2005, KLSE change to Bursa Malaysia Sec Bhd
(BMSB) and MDEX known as BMDB, MDCH
known as BMDC
DEVELOPMENT
• Bursa Malaysia Derivatives Berhad (BMDB) is a
wholly owned subsidiary of Bursa Malaysia Bhd
which provides, operates and maintains a futures
and options exchange.
• BMDB operates the most liquid and successful
crude palm oil futures (FCPO) contract in the world
• In the last quarter of 2009, BMDB entered into a
partnership with the Chicago Mercantile Exchange
(CME) Group; the world largest derivative exchange
which led to an acquisition of an equity interest in
BMDB.
DEVELOPMENT
• Trading of derivative products on Bursa
Malaysia comprising commodity, financial and
equity futures is carried out via multiple access
globally on CME Globex, the electronic trading
platform of the CME Group