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Bursa Malaysia Securities Clearing Sdn Bhd

Bursa Malaysia’s Central Matching Facility. Bursa Malaysia Securities Clearing Sdn Bhd. 2 June 2008.

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Bursa Malaysia Securities Clearing Sdn Bhd

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  1. Bursa Malaysia’s Central Matching Facility Bursa Malaysia Securities Clearing Sdn Bhd 2 June 2008 Bursa Malaysia Bhd. and its Group of Companies (“the Company”) reserve all proprietary rights to the contents of this Presentation. No part of this Presentation may be used or reproduced in any form without the Company’s prior written permission. This Presentation is provided for information purposes only. Neither the Company nor the Presenter make any warranty, express or implied, nor assume any legal liability or responsibility for the accuracy, completeness or currency of the contents of this Presentation. It is your responsibility to verify any information before using or relying on it.

  2. Issues: - Manual processes and procedures. Manual pre-matching of trades between Clearing Participants. Late instructions and shorter turnaround time. STP TO ACHIEVE IMPROVED OPERATIONAL EFFICIENCY Risk in error and cost of failed trades.

  3. There is a need for implementation of an automated flow within the current pre-matching processes to improve the processing of institutional trades between the fund managers, custodians and the brokers. BACKGROUND Pre-matching of institutional trades – manual process comprising of communications through telephone, faxes or e-mails.

  4. The Central Matching Facility (CMF): - Will allow Clearing Participants comprising of Trading Clearing Participants (TCP) and Non Trading Clearing Participants (NTCP) to automatically and electronically match settlement details. This new facility will be able to provide a more efficient and effective method of matching of settlement details between the Clearing Participants. CENTRAL MATCHING FACILITY (CMF)

  5. Trading Clearing Participants (TCP) Non-Trading Clearing Participants (NTCP) CMF System Files Files Matching Process Matching Process Output Unmatched Matched ISS Depository Transfers Processing on T+2 after 7.00 p.m. ISS CMF OVERVIEW Creation of ISS Instructions

  6. Clearing Participants input trade and settlement details through file transfers from T+1 up to T+2. CMF will match the trade details sent by the Clearing Participants. The trade details must contain certain mandatory information as required for matching. A file will be generated to inform users that the information has been successfully transmitted. EXPLANATION OF CMF FLOW

  7. For trade details that have been successfully matched under CMF for Institutional Settlement Service (ISS) settlement, ISS instructions will be created. If there is any rejection, users are informed that the record cannot be matched and a rejection file is provided. Clearing Participants can re-submit trade details after the error is rectified. EXPLANATION OF CMF FLOW

  8. Increased capacity for the Clearing Participants to handle higher number of matched transactions. Reduced manual intervention Reduced manual intervention. Will facilitate straight through processing and the reduction in number of errors. Reduced risks BENEFITS OF CMF Increased capacity Reduction in settlement risks and errors.

  9. Time saving Improve operational efficiency Improve operational efficiency for users. BENEFITS OF CMF As the process is automated, benefit in time saving.

  10. Institutional Settlement Service (ISS) was introduced in July 1999. To enable the Non Trading Clearing Participants to clear and settle securities transactions delivery with the Clearing House. To extent DVP environment to wider participants. INSTITUTIONAL SETTLEMENT SERVICE

  11. The settlement of funds are directly between the Clearing House and the ISS participants (TCP and NTCP). Shares delivery / receipt are directly credited / debited in accounts maintained by NTCP. SALIENT FEATURES OF ISS

  12. THANK YOU www.bursamalaysia.com

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