ACG CROSS TRAINING Bursa Malaysia Depository Sdn Bhd 27th & 28th June 2006 Bursa Malaysia and its Group of Companies (“Bursa Malaysia”) 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 Bursa Malaysia’s prior written permission. This Presentation is provided for information purposes only. Neither the Bursa Malaysia 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. Merits and Demerits of Direct and Indirect Account Method

IntroductionIntroduction - Bursa Malaysia Depository Sdn Bhd - CDS Users - Benefits of CDS - Depository’s Services - Account Structure - Account Status - Statistic Differences Between Direct & Indirect AccountDifferences Between Direct & Indirect Account Merits of Direct & Indirect AccountMerits of Direct & Indirect Account Demerits of Direct & Indirect AccountDemerits of Direct & Indirect Account AGENDA

INTRODUCTION In November 1992 Bursa Malaysia Depository Sdn Bhd (formerly known as Malaysian Central Depository Sdn Bhd) began providing the Central Depository System (CDS) to the investing public through the opening of CDS accounts. It was a system designed to revolutionise the securities industry in Malaysia. BURSA MALAYSIA DEPOSITORY SDN BHD

Provides depository services to the following users through the Central Depository System (CDS):-  Authorised Depository Agent (ADA)  Authorised Direct Member (ADM)  Issuer  Issuing house  Share registrar  Account holder / depositor  Clearing House CDS USERS

BENEFITS OF CDS mIncreased efficiency – Via a computerised book- entry system, it has improved the efficiency of securities transactions e.g. on-line transfer of securities mIncreases the capacity of clearing and settlement of securities mReduces settlement risk - eliminate lost, fraud or misplaced certificate mAutomatic registration - save time and costs

DEPOSITORY’S SERVICES Core services provided are as follows:-  Account openings  Deposit of securities  Transfer of securities  Withdrawal of securities  Book-entry settlement  Initial Public Offerings (IPOs)  Corporate exercises  Provision of information

ACCOUNT STRUCTURE Direct Account : mheld directly in the name of individual, corporate body, institutional investors and etc. Indirect Account : mheld in the name of nominees where the beneficial owner details are captured mone nominee account one beneficial owner mnominees account can only be opened by Authorised Nominees i.e. bank/ broker/trust companies mCertain relaxation was introduced whereby nominee company can operate omnibus account effective 21 October 2005.

ACCOUNT STATUS Active Account : mAccounts having transaction or balance for the last 3 years. Inactive Account : mAccounts with balance but without any transaction for the last 3 years. Dormant Account : mAccount without balance and transaction for the past 3 years.

STATISTIC AS AT 31 MAY 2006 mNo. of Participants - Authorised Depository Agent (ADA) - 37 Authorised Direct Member (ADM) - 27 mNo. of Participants Branches - Authorised Depository Agent (ADA) Authorised Direct Member (ADM) - 1 mNo. of CDS Accounts million mNo. of Indirect CDS account million No. of Direct CDS account million

Direct AccountIndirect Account Account holder open the account with the Brokers i.e. ADA under his name directly i.e. John Smith Depositor open the account with Custodians Bank or Brokers under the name of a nominee company with the depositors as the beneficial owner i.e. ABC Nominees (Tempatan) Sdn Bhd For John Smith In direct account, the account holder is the owner of the securities in the CDS account. The depositor will be registered as the shareholder In indirect account, the nominee company is the owner of the securities in the CDS account. The name of the nominee company will be registered as the shareholder. DIFFERENCES BETWEEN DIRECT & INDIRECT ACCOUNT

Direct AccountIndirect Account Dividend entitlement will be directly mailed to the depositor, while entitlement in shares will be credited directly to the appropriate account Dividend entitlement will be received by the nominee company that in turn will redirect these entitlement to the beneficial owner. Account opened for its own investment and deal with securities using this direct account Account opened for the following purpose : 1. custodian 2. margin or loan facilities purpose Requires supporting documents for opening of direct CDS account and subsequent operating process Does not require extensive supporting document The depositor is the operator of the account The nominee company is the operator of the account DIFFERENCES BETWEEN DIRECT & INDIRECT ACCOUNT

Direct AccountIndirect Account Depositors are in a principal relationship with Bursa DepositoryDepositors are in a principal relationship with Bursa Depository Confidentiality of depositor shareholdings is protected whereby depositor’s share holding is not known to third partyConfidentiality of depositor shareholdings is protected whereby depositor’s share holding is not known to third party The ownership of CDS account is transparentThe ownership of CDS account is transparent The asset of depositor and stockbroker i.e. ADA is clearly segregatedThe asset of depositor and stockbroker i.e. ADA is clearly segregated Depositor received his/her annual reports or dividends payout directly from the registrar/issuerDepositor received his/her annual reports or dividends payout directly from the registrar/issuer Lesser documentation to operated such accountLesser documentation to operated such account Do not require to be present in person to perform depository transactionsDo not require to be present in person to perform depository transactions Cost savings to Bursa Depository arising from the following :Cost savings to Bursa Depository arising from the following : - storage cost due to less documentation to stored - storage cost due to less documentation to stored - postage and other related stationeries on mailing of statements/notices as these notifications are send electronically to nominee company MERITS OF DIRECT & INDIRECT ACCOUNT

Direct AccountIndirect Account The depositors shareholdings is unaffected in the event the brokers is declared bankruptThe depositors shareholdings is unaffected in the event the brokers is declared bankrupt Depositors received notification directly from Bursa Depository in the event of any changes to its account particulars or movement of securitiesDepositors received notification directly from Bursa Depository in the event of any changes to its account particulars or movement of securities CDS statement of account are issued directly to the depositorCDS statement of account are issued directly to the depositor MERITS OF DIRECT & INDIRECT ACCOUNT

Direct AccountIndirect Account More documentation to operate such accountMore documentation to operate such account To be physically present in person to perform depository related transactionsTo be physically present in person to perform depository related transactions Higher operational and maintenance cost for Bursa Depository :Higher operational and maintenance cost for Bursa Depository : - storage cost for storing documents - postage and stationeries cost for sending out statements and notices to depositors The nominee company is in a principal relationship with Bursa Depository and the beneficial owner details are merely for informationThe nominee company is in a principal relationship with Bursa Depository and the beneficial owner details are merely for information Depositor shareholding is known to third partyDepositor shareholding is known to third party Depositor do not receive any notification or CDS statement of account directly from Bursa DepositoryDepositor do not receive any notification or CDS statement of account directly from Bursa Depository Delay in receiving dividend entitlementDelay in receiving dividend entitlement Does not receive notification or annual report directly from the IssuerDoes not receive notification or annual report directly from the Issuer DEMERITS OF DIRECT & INDIRECT ACCOUNT

Direct AccountIndirect Account Incurred additional cost for services provided by the nominee companyIncurred additional cost for services provided by the nominee company Implication to depositor shareholdings if the nominee company is declared bankruptImplication to depositor shareholdings if the nominee company is declared bankrupt Ownership of account is not very clear.Ownership of account is not very clear. DEMERITS OF DIRECT & INDIRECT ACCOUNT