According to a circular issued by the Securities Commission (SC), stockbrokers will be able to offer fractional share trading services to shareholders. Fractional share trading services will enable more young investors to participate in Malaysian equities and will also help retail investors to diversify their investments.
Fractional shares are shares with less than a standard unit (lot) of shares, which will be less than 100 shares per transaction.
The move comes after Bursa Malaysia said it would introduce a framework for fractional shares within six months, which would allow investors to buy shares in dollar amounts instead of units.
For example, at least 100 units must be purchased to buy a share, but in future, investors can choose to buy shares in RM10, and the system will allocate how many shares will be available in RM10 based on the latest share price of the listed company.
This fractional share trading model has already been implemented in other financial products and will be introduced to the stock exchange market.
