Bahrain Bourse (BHB) has announced a two-year-long incentive programme to encourage the adoption of online trading by brokers and investors, said a top official.

In a statement yesterday, BHB director Fouad Rashid said the online trading incentive programme (OTIP) would be implemented six months from the date of the resolution, which was issued on Monday, by bourse chairman Yousuf Humood, according to a report in the Gulf Daily News, our sister publication.

"This is to give brokers sufficient time to put in place the technology infrastructure including security and risk management capabilities and ensure compatibility with BHB's trading system," Rashid said.

He added that the OTIP was in line with the strategy for increasing trading activity by attracting more investors.

"The programme will improve accessibility, simplify dealing in listed securities and enhance liquidity in the market.

"It enables investors, regardless of their geographical location, to trade on BHB and manage their investments in listed companies with greater flexibility in order to achieve better returns," he said.

"Brokers' participation in the programme and the use of the service by investors will result in reducing the cost of transaction for both brokers and investors.

"Participants will enjoy many benefits including levy cuts and waivers, as well as technical and promotional services," he added.

For transactions executed online, the maximum trading levy has been reduced by almost a third to 0.2 per cent from 0.275 per cent of the value. It will remain capped at 0.2 per cent even after the programme ends.

For the duration of the OTIP, there will be no levy on online transactions with values equal to or less than BD5,000 ($13,180).

The OTIP has set a minimum amount of BD100 for opening a client's online trading account.

To encourage small investors, BHB will reduce its share of the brokers' levy on online transactions by 25 per cent, regardless of whether they are executed during or after the programme.

The bourse will also place, for a period of one year, a free promotional advertisement on its website for the participating broker. – TradeArabia News Service