1. Central Matching Facility Bursa Malaysia Securities Clearing Sdn Bhd
2 June 2008
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2. STP TO ACHIEVE IMPROVED OPERATIONAL EFFICIENCY
Manual pre-matching of trades between Clearing Participants.
Late instructions and shorter turnaround time.
Issues: -
Manual processes and procedures.
Risk in error and cost of failed trades.

3. BACKGROUND
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.
Pre-matching of institutional trades – manual process comprising of communications through telephone, faxes or s.

4. 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.
The Central Matching Facility (CMF): -

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

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

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

8. BENEFITS OF CMF Increased capacity Reduced manual intervention
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
Reduction in settlement risks and errors.

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

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

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

12. THANK YOU