http://www.state.gov/e/eb/rls/othr/ics/2013/204686.

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Capital Markets and Securities Trading Foreigners may trade in securities and derivatives. Malaysia houses Asias third largest corporate bond market, behind only Japan and Korea in market capitalization. Both domestic and foreign companies regularly access capital in Malaysias bond market. Malaysia provides tax incentives for foreign companies issuing Islamic bonds and financial instruments in Malaysia. During 2011, foreign capital continued flowing back into Malaysian bonds after a US$35 billion outflow during the 2008-9 global financial crises. Malaysias stock market (Bursa Malaysia) is open to foreign investment and foreign corporation issuing shares. However, foreign issuers remain subject to Bumiputra ownership requirements of 12.5% if the majority of their operations are in Malaysia. Listing requirements for foreign companies are similar to that of local companies. There additional criteria for foreign companies wanting to list in Malaysia including, among others: approval of regulatory authorities of foreign jurisdiction where the company was incorporated, valuation of assets that are standards applied in Malaysia or International Valuation Standards and the company must have been registered with the Registrar of Companies under the Companies Act 1965.

Foreigners are permitted to purchase a limited number of stockbrokerage licenses and are allowed to take a majority ownership stake in unit trust management companies. Malaysia has allowed five foreign stock brokerage firms and one foreign fund management company to set up operations in Malaysia. Maximum

foreign ownership in domestic Malaysian stock brokerage firms and unit trusts is 70%. There are no foreign equity restrictions for fund management companies providing wholesale services and 70% foreign equity unit trust management companies providing retail services and for stock broking companies. Futures brokerage firms may be 100% foreign-owned. International fund managers have to go through a local fund provider, which then establishes a feeder arrangement.
http://www.asiapacfinance.com/malaysia-stock-market In general, foreign ownership of Malaysian companies is restricted to 30% and is listed in their M&A or governed by Ministry guidelines. There are exceptions where the 30% limit can be exceeded, in particular for companies that mainly produce goods for export. A notable exception is where the foreign equity limit in telecommunication companies has been raised from 49% to 61%, investment banks, domestic Islamic banks and insurance companies up to 70%, etc. Once the limit on foreign-owned shares is reached, the companies concerned can ask for a separate listing of their foreign and local contents, although this is not mandatory. Shares that have reached their foreign ownership limits (FOLs) may therefore either be traded singly or separately. Additionally, foreigners can still continue to buy and hold or trade in shares that have reached their foreign holding limit and which have not been quoted separately or in shares about to reach their limit. However, there could be ramifications on the treatment of corporate action entitlements for such shares, which is explained below under "restricted shares". "Restricted Shares" Under the Securities Industry (Central Depositories) (Foreign Ownership) Regulations 1996, shares held by foreign investors in companies with foreign ownership limitations, and which are not separately quoted, are known as restricted shares. The rights and obligations of these restricted shares may be determined by the issuer or their registrar. General market practice has been that holders of these 'restricted' shares that have exceeded the prescribed FOLs will not have voting rights but may rank pari passu with other ordinary shares in all aspects of entitlements declared by the issuer. Please note there are no penalty or other consequences of going over the ownership level.