Malaysia and Singapore will set up a stock market trading link between Bursa Malaysia (BM) and Singapore Exchange (SGX) by the end of this year, regulators from both countries announced on Tuesday (Feb 6).
The trading link will allow investors to trade and settle shares listed on each other's stock market more conveniently and at lower costs.
It will also cover post-trade arrangements like the clearing and settlement of the stocks traded.
The Monetary Authority of Singapore (MAS) and the Securities Commission Malaysia will set up cross-border supervisory and enforcement arrangements, and work together with the two exchanges to operationalise the link.
The initiative is part of efforts by the ASEAN Capital Markets Forum to deepen financial connectivity across the region's capital markets.
Securities Commission Malaysia chairman Ranjit Ajit Singh said the trading link is a key step to encouraging ASEAN investors to invest in the region.
"The ease of accessibility for investors will contribute towards greater vibrancy in our markets. Once operationalised, this pilot initiative can form the basis for future connectivity among ASEAN markets,” he said.
MAS assistant managing director Lee Boon Ngiap said the trading link will help boost cross-border investments in Singapore and Malaysia stocks.
"This will improve the liquidity of both our stock markets,” he said.