stp by bursa malaysia depository

Renewal Work-OutSlide 1

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Straight Through Processing (STP) for Improving Market

Liquidity

Bursa Malaysia Depository Sdn Bhd 2 June 2008


STP by Bursa Malaysia Depository

• Bursa Malaysia Depository Sdn Bhd has regularly review its processes to facilitate a shorter and more efficient timeline for the Listed Issuer to market their shares.

• To meet this objective, we introduced STP in some of our processes for greater efficiency.


STP by Bursa Malaysia Depository

• STP initiatives by Bursa Malaysia Depository.

– eRapid

– SPEEDS


eRapid

eRapid• Introduced in 2004.

• Portal to enable the Issuer / Share Registrar (Transfer Agent).

– To request for Records of Depositor (ROD) / List of Shareholders.

– Transmit Allotment files.– Disseminate circulars to stock broking

companies and share registrars.


eRapid – Old way

Prior to the introduction of eRapid,

• Physical delivery of documents using forms & diskettes.

• Slow - take days to weeks to complete to process and credit the allotments and to receive RODs.

• Subject to delays when diskettes are faulty.


eRapid – Old way

• Lack of security and involvements of courier services. Also risk of documents lost in transit.

• Costly - involves transportation cost.


eRapid – Requesting for ROD

1. Submit ROD Request

2. Transfer ROD Request

5. Download ROD from website

4. Posting of ROD

3. Processing of ROD

CDS database

eRapid Server

Issuer’s/Share Registrar


eRapid – Processing of Allotment

1. Submit Allotment Request

2. Transfer Allotment Data

6. Download results from website

5. Posting of Allotment verification & crediting results

3. Processing of verification of allotment data

4. Crediting of securities

CDS database

eRapid Server

Issuer’s/Share Registrar

Broker’s terminalInvestor’s

terminal

7. via eFix

- Updates of accounts balances

8. Send updates to client


Benefits from eRapid

• The introduction of eRapid STP has reduced the time to process the allotments.

• With the shorter time needed to credit the shares, shareholders can now trade their shares earlier.


SPEEDS

• Introduced in March 2007.

• Improve the processing of certain Corporate Exercises.

– Bonus Issue.– Share Split.– Shares Consolidation.


Old Process for Corporate Exercise

1. Request Record of Depositors (ROD)

3. Received ROD

Share Registrar

2. Process ROD on BCD night

4. Compute the entitlement list

5. Forward allotment data for verification

6. Revert on verification results

7. Print & dispatch Notice of Allotment

8. Credit shares on the evening prior to the listing date

Bursa Depository


SPEEDS Process for Corporate Exercise

2. Receive crediting data

Share Registrar

1. Process on BCD - Generate ROD - Compute entitlement

- Credit the securities

3. Print & dispatch Notice of Allotment

Bursa Depository


Benefits of SPEEDS

Activities Non-SPEEDS

Subdivision of Shares

Non-SPEEDSShare

Consolidation

Non-SPEEDS Bonus Issue

SPEEDS timeline

Announcement of Books Closing Date (“BCD”)

BCD - 10 BCD- 10 BCD - 10 BCD - 10

Trading suspension from BCD - 4 from BCD - 4 N/A N/A

Books Closing Date BCD BCD BCD BCD

Application for quotation

BCD + 4 BCD + 4 BCD + 8 N/A

Quotation BCD + 6 BCD + 6 BCD + 10 BCD + 1

No. of days the securities are suspended

10 days 10 days The new securities can only be traded 10 days after BCD)

Nil(new securities can be traded

immediately on Ex date)


Benefits of SPEEDS

• Shorter time to market and continuous trading of shares.

• Certainty of timeline for issuers, shareholders and investors.Automatic quotation of securities on the

next market day from BCD.

• Promotes investor’s confidence from uninterrupted trading.

• Reduction in investors’ risk exposure. Shares no longer suspended.


SPEEDS

• As at 30 April 2008, Bursa Depository has processed bonus issues, Subdivision of Shares and Shares Consolidations involving 106 counters.

• With earlier listing and non-suspension of counters has resulted in increased trades with estimated values of more than 4.3 Billion Malaysian Ringgit.


Benefits of STP processes

• The STP that is currently implemented has brought many benefits.

– Allows shorter time to process & market securities thus effectively increases the liquidity in the market.

– Simplifies processes.• Reduces cost (delivery, man

power).• Risk of error or omission.


Benefits of STP processes

– Almost end-to-end processing.• Less human intervention.

– Paper reduction.


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stp by bursa malaysia depository

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