CLEARING AND SETTLEMENT

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CLEARING AND SETTLEMENT by Mind Map: CLEARING AND SETTLEMENT

1. BURSA MALAYSIA SECURITIES CLEARING SDN. BHD. (BMSC)

1.1. Commenced operations in March 1984 as the Clearing House appointed by Bursa Malaysia.

1.2. Known as Securities Clearing Automated Network Service Sdn. Bhd.

1.3. Incorporated on 12th November 1983

1.4. THE OBJECTIVES OF BMSC :-

1.4.1. 1. Providing clearing and settlement services with facilities for clearing.

1.4.2. 2. Delivering stocks and securities to eachother.

1.4.3. 3. Receiving stocks and securities from eachother.

1.4.4. 4. Receiving or paying any amounts payable to or payable by such Clearing Participants about any stockbroking transactions.

1.4.5. Incorporated on 12th November 1983

1.5. TWO (2) CATEGORIES CLEARING PARTNERSHIP OF BURSA MALAYSIA SECURITIES CLEARING SDN. BHD.

1.5.1. 1) TRADING CLEARING PARTICIPANT (TCP)

1.5.1.1. TCP is a person/organization which is a participant in the Exchange.

1.5.1.1.1. has been acknowledge by the Clearing House as a clearing party to engage in one or more of the services offered by the Clearing House.

1.5.1.2. They are stockbroking firms who are also active in the Bursa Malaysia Berhad Association.

1.5.2. 2) NON-TRADING CLEARING PARTICIPANT (NTCP)

1.5.2.1. They are resident banks and financial institutions who have been acknowledge to participate in the BMSC.

1.5.2.2. THE ELIGIBILITY CRITERIA FOR NTCP ARE :-

1.5.2.2.1. a) An organization carrying on financial services business by providing safe custody facilities and services with respect to securities listed and traded on the Exchange

1.5.2.2.2. b) It is a statutory organization or authority of Malaysia or any state of Malaysia

1.5.2.2.3. c) It is an organization that is an Authorized Direct Member of the Central Depository as defined in the Depository Rules

2. CENTRAL DEPOSITORY SYSTEM (CDS)

2.1. Established on 14 April 1990, under the Security Industry Act 1991.

2.2. The provider of CDS in Malaysia is Bursa Malaysia Depository Sdn Bhd.

2.3. CDS FACILITATES ARE :-

2.3.1. 1) CDS ACCOUNT

2.3.1.1. authorized Depository Agents are authorized to execute any of the depositor's transactions :-

2.3.1.1.1. 1) Opening, updating, suspending or closing a CDS account.

2.3.1.1.2. 2) Processing a deposit of scripts.

2.3.1.1.3. 3) Inquiry into status of depositors CDS account.

2.3.1.1.4. 4) Request for additional statement of accounts.

2.3.2. 2) CDS STATEMENT OF ACCOUNT

2.3.2.1. All account holders who have traded in a particular month will receive monthly statement

2.3.2.2. Every 6 months statements are issued for all account holders (except dormant account)

2.3.3. 3) DEPOSIT

2.3.3.1. It is mandatory to deposit shares of companies listed or propose to be listed on the Bursa Malaysia to be deposited with Central Depository.

2.3.3.2. Deposit is a facility to convert the shareholdings held in physical form to script less.

2.3.4. 4) TRANSFER OF SECURITIES

2.3.4.1. Two (2) broad categories of reasons which is :-

2.3.4.1.1. 1) No change in beneficial Ownership

2.3.4.1.2. 2) Change in Beneficial Ownership

2.3.4.2. This requests under the reason of change in Beneficial Ownership which must be accompanied by the relevant supporting documents.

2.3.5. 5) WITHDRAWAL

2.3.5.1. 1) To facilitate share buyback.

2.3.5.2. 2) To facilitate conversion of debt securities.

2.3.5.3. 3) To facilitate company restructuring process.

2.3.5.4. 4) To facilitate rectification of error.

3. CHAPTER 7