Malaysia Stock Loan Glossary
The vocabulary of Bursa Malaysia share-backed financing — markets, instruments, custody, loan terms, liquidity, and disclosure — defined plainly, for shareholders and their advisers.
In short
This glossary defines the terms that recur in a Malaysia stock loan. It covers the Bursa Malaysia markets and indices, the instrument itself, custody and collateral through Bursa Depository and the CDS, the loan terms such as LTV, tenor, and recourse, the liquidity and risk factors that shape pricing, and the regulation and disclosure framework under the SC, the Companies Act 2016, and the Take-overs Code. Each term carries its own link, so it can be cited individually.
Key takeaways
- Stock loan, not loan stock. A stock loan raises cash against listed shares you already own and keep, while loan stock (ICULS / RCULS) is a convertible debt instrument a company issues — the opposite direction.
- You keep ownership. The financing arranged here is non-recourse cash-out against a holding, so the shareholder keeps ownership, dividends, and upside.
- Book-entry custody. Bursa Malaysia shares are held scripless in a CDS account at Bursa Malaysia Depository, so a share charge is created and released by book entry while beneficial ownership is preserved.
- Conventional or Shariah-compliant. A Shariah-compliant facility uses tawarruq (commodity murabahah) so the return is a profit rate rather than interest (riba).
- Sized in ringgit. Financing is typically denominated in ringgit and sized from RM 5 million upward, with LTV shaped by liquidity, volatility, and concentration.
Markets & boards
Bursa Malaysia
Malaysia's stock exchange, home to the country's listed companies across the Main, ACE, and LEAP markets.
Main Market
Bursa Malaysia's primary board for established companies that meet its admission criteria.
ACE Market
Bursa Malaysia's sponsor-driven market for smaller, high-growth companies.
LEAP MarketLeading Entrepreneur Accelerator Platform
Bursa Malaysia's adviser-driven market for smaller and emerging companies, open to sophisticated investors. Its more limited liquidity and investor base make counters listed on it harder to finance than Main Market or ACE Market shares.
FBM KLCI / FBM 70 / FBM 100Benchmark indices
Benchmark indices of the largest and most liquid Bursa Malaysia stocks; the FBM KLCI tracks the top 30 by market capitalisation.
Shariah-compliant securities
Listed securities classified as Shariah-compliant by the SC's Shariah Advisory Council; a large share of Bursa counters qualify, enabling Shariah-compliant financing. See Shariah-compliant share financing.
Foreign ownership limitFOL
A sector-specific cap on the percentage of a company that non-Malaysian investors may hold, applied in regulated industries such as banking and telecommunications.
Bumiputera equity conditionEquity participation
Equity-participation conditions attached to some companies and licences, relevant to how certain holdings are structured.
The instrument
Stock loan / Share-backed financing
A loan secured by charging listed shares; the borrower keeps ownership and upside and recovers the shares on repayment. See how stock loans work.
Margin financing
Borrowing against securities held as collateral. Traditional broker margin financing funds further purchases and carries margin calls; our financing uses the collateral for liquidity instead, so you keep ownership, dividends, and upside.
Lombard loan
A private-banking term for a loan secured by a pledge of liquid securities, familiar in Singapore and Hong Kong. Applied to Bursa Malaysia shares it provides non-recourse liquidity against a concentrated holding. See Lombard loans for Bursa Malaysia shares.
Loan stock (ICULS / RCULS)not a stock loan
A convertible debt instrument a company issues to raise capital (Irredeemable or Redeemable Convertible Unsecured Loan Stock), traded on Bursa Malaysia. This is the opposite of a stock loan or share margin financing, where a shareholder borrows against shares already owned.
Securities-backed lendingSBL
The broader category of lending against securities.
Block tradeDirect business transaction (DBT)
A large, privately-negotiated share transaction crossed off the central order book and reported to Bursa Malaysia. See block trades and block trades on Bursa Malaysia, explained.
Direct business transaction (DBT)
A trade negotiated directly between an identified buyer and seller away from the central order book and then reported to Bursa Malaysia for clearing and settlement. It is the mechanism by which a block of shares is crossed off-market on the Exchange.
Married deal
The market term for a parcel of shares matched between a specific buyer and seller at an agreed price and crossed off the order book. On Bursa Malaysia a married deal is executed and reported as a direct business transaction (DBT).
Crossing
The execution of a pre-matched buy and sell order for the same security at the same price, completed away from the continuous order book. On Bursa Malaysia a block crossing is reported as a direct business transaction (DBT).
Off-market trade
A transaction in listed shares negotiated and agreed away from the open order book, then reported to the exchange for clearing and settlement rather than matched anonymously on-screen. A Bursa Malaysia block trade is executed off-market as a direct business transaction (DBT).
| Feature | Stock loan | Loan stock (ICULS / RCULS) | Share margin financing |
|---|---|---|---|
| What it is | A loan secured by charging listed shares; the borrower keeps ownership and upside and recovers the shares on repayment. | A convertible debt instrument a company issues to raise capital, traded on Bursa Malaysia. | Financing raised against listed shares; as arranged here, non-recourse cash-out against a holding. |
| Who borrows | A shareholder borrows against shares already owned. | A company issues it to raise capital — the opposite direction. | A shareholder borrows against a holding they keep. |
| Ownership & upside | Retained — keeps ownership and upside. | Not applicable — issued debt, not borrowing against owned shares. | Retained — keeps ownership, dividends, and upside. |
| Relationship to a stock loan | The instrument itself. | The opposite of a stock loan. | The same family — borrowing against a holding. |
Custody & collateral
Bursa Malaysia Depository
The central depository (a Bursa subsidiary) that holds Malaysian securities in book-entry form and records share charges. In the financing, the collateral shares sit in the borrower's account at the designated custodian, over which the lender takes security; see the charge and custody stage.
CDS accountCentral Depository System
A Central Depository System account in which a holder's Bursa Malaysia–listed shares are held electronically.
Custodian
A licensed institution at which the borrower opens an account to hold the charged shares for the term of the financing, and over which the lender takes security. The collateral shares sit in that account, while beneficial ownership is preserved.
HaircutCollateral discount
The discount applied to a share's market value when sizing the loan against it.
Collateral top-up / Margin call
A demand to add collateral or repay part of the loan if the share price falls below an agreed level.
Scripless / book-entry securities
Bursa Malaysia shares are held in scripless (book-entry) form, recorded electronically in a CDS account at Bursa Malaysia Depository rather than as physical certificates. This is what allows a share charge to be created and released by book entry.
SICDA 1991Securities Industry (Central Depositories) Act
The Securities Industry (Central Depositories) Act 1991 — the statute governing the Central Depository System, scripless holdings, and the recording of interests in Bursa Malaysia–listed securities.
eDividend
Bursa Malaysia's mechanism for paying cash dividends directly into the bank account linked to a CDS account. It determines how dividends on charged shares are routed while beneficial ownership is retained — see dividends, voting & corporate actions.
Loan terms
LTVLoan-to-Value
The loan amount as a percentage of the charged shares' market value.
TenorLoan term
The length of the loan, commonly 12–36 months.
RecourseLender's remedy
Whether the lender can pursue the borrower's other assets for a shortfall. Non-recourse: limited to the shares. Full-recourse: borrower personally liable. Limited-recourse: in between. See recourse profiles.
Profit rate (Shariah)
The return on a Shariah-compliant facility, expressed as profit rather than interest.
Tawarruq / Commodity murabahah
The Shariah-compliant mechanism commonly used to structure Islamic financing: a commodity is bought and sold on a cost-plus (murabahah) deferred-payment basis, then sold onward for cash, so the client obtains liquidity and owes a fixed profit rather than interest (riba). See how Shariah-compliant stock loans work.
Ribaprohibited under Shariah
Interest or usury, prohibited under Shariah. A Shariah-compliant facility avoids riba by expressing the lender's return as profit from a genuine sale (for example via tawarruq) rather than as interest on a loan.
RinggitRM · MYR
The Malaysian ringgit, the currency in which Bursa Malaysia shares trade and in which the financing arranged here is typically denominated and sized (from RM 5 million upward).
Liquidity & risk
Free float
The share of a company's stock available for public trading, excluding locked-in strategic holdings.
ADTVAverage Daily Trading Value
The average value traded per day; a key liquidity input to LTV.
Volatility
How much a share's price fluctuates; higher volatility means a more conservative LTV.
ConcentrationPosition size
The size of a single position relative to the stock's float and daily volume.
PN17 (Practice Note 17)GN3 on the ACE Market
A Bursa Malaysia Main Market classification for financially distressed listed companies, which must submit and implement a regularisation plan. PN17 (and its ACE Market counterpart, GN3) status materially affects a counter's liquidity and financeability.
Moratorium sharesPost-IPO lock-up
Shares subject to a lock-up (moratorium) under Bursa Malaysia listing requirements — commonly on promoters after an IPO — during which they may not be sold or transferred. A moratorium constrains whether and how such shares can be charged and enforced.
Regulation & disclosure
Securities Commission MalaysiaSC
The statutory regulator of the Malaysian capital market.
Capital Markets and Services ActCMSA 2007
The principal statute governing Malaysia's capital markets and licensed activities.
Take-overs Code33% · MCTOM 2016
The Malaysian Code on Take-Overs and Mergers 2016; reaching 33%, or creeping by more than 2% in six months between 33% and 50%, can trigger a mandatory general offer.
Shariah Advisory CouncilSAC
The SC body that classifies listed securities as Shariah-compliant, with the list updated periodically.
Persons acting in concert
Parties who cooperate to acquire or consolidate control, whose holdings are aggregated when testing the thresholds in the Take-overs Code. Relevant when assessing whether a charge or its enforcement bears on the 33% mandatory-offer threshold — see the Take-overs Code & the 33% threshold.
From terminology to terms.
If a term here describes your situation, a senior principal can take it further. Confidential, no obligation.