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StockbrokingStockbroking Industry in MalaysiaIndustry in Malaysia

An OverviewAn Overview


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BUYING AND SELLING SHARES IN MALAYSIA- Overview

Account

Two Type Of Account Need to Be Opened

CDS

Trading Account with a remiser/dealer representative assigned to be the main contact person of an

investor and manage the buying and selling orderBuying

To buy shares , customer must have sufficient funds to cover the cost of shares as well as the transactioncosts. All payments must be settled by 12.30pm on T+3.

Selling

To sell shares , customer must already have shares in the CDS account or arrange to transfer the shares tothe CDS account to ensure sufficient shares for debiting on T+2 night .Payment to customer will be madeon T+3 12.30 .


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Buying and Selling Shares in Malaysia Overview (cont)

Matching

Orders are matched electronically through the Bursa Malaysias trading system.

There is no manual intervention in the process.

ConfirmationCustomer remiser will confirm the order after the orders have been matched.

T Day

The day on which shares are bought/ sold is known as T-day.

ContractA contract note will be sent to the customer and customer need to confirm that all details such as company

name, cost of the shares and transaction costs are correct and keep this document carefully


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Trading Process

CLIENT

W

inSCORE

DealerDealers representative keys order intos representative keys order into WinSCOREWinSCORE

((BURSABURSAss fully automated system)fully automated system)

BURSA

Orders are matched automatically and orderOrders are matched automatically and orderconfirmation will be routed back to CIMB IBconfirmation will be routed back to CIMB IB

Order Confirmation by Phone

DealerDealers representative confirms the trade with clients representative confirms the trade with client

CIMB INVESTMENT BANK BHD

DEALERS / REMISIERS

Phone Order

Client places order with dealerClient places order with dealers representative ats representative at

CIMB Investment BankCIMB Investment Bank Berhad(CIMBBerhad(CIMB IB)IB)


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SETTLEMENT CYCLE IN MALAYSIA T+3 SETTLEMENT

Clearing and settlement of Trades in Bursa trading systemCash settlement Via Clearing house

Shares settlement delivered by way of book entries in CDS accounts by Bursa Depository

Settlement Mode practice by the industry

FDSS Settlement

ISS Settlement-DVP

FDSS settlement -Purchase Contracts

Shares credited into buyers CDS account maintain with stockbrokers on T+3.

Cash settlement with brokers done in the following settlement mode:

Electronic funds transfer

Issuance of cheques

Cash

Telegraphic transfer


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SETTLEMENT CYCLE IN MALAYSIA T+3 SETTLEMENT(cont)

Failure to settle by T+3, force selling activities will be performed on T+4.

FDSS settlement -Sales Contract

Seller must make available securities in the CDS account by the scheduleddelivery time ie by 4pm on T+2.Failure which Exchange shall upon being advised by clearing house, automatically

buy-in against the Participating Organization without notice on T+3.

The losses or gain will be then charge to the relevant account.

Payment to selling clients will be done on T+3 from the trust account maintained by

PO after delivery of the securities.


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Trading Hours

Trading Sessions

9.00 am to 12.30 pm (+0800 GMT)

2.30 pm to 5.00 pm (+0800 GMT)

Business Days

Monday to Friday (except for public holidays in

Kuala Lumpur, Malaysia)


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Trade Settlement

Purchase Contracts

Payment by 12.30pm, T + 3

Force selling on T + 4, if investor fails to settle

Sale Contracts

Delivery of shares by 4pm, T + 2

Buying-in on T + 3, if investor fails to deliver

Contra Transactions

Netting of purchase due against subsequent sales


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Transaction Costs

Brokerage Minimum brokerage where applicable is RM40.00

Brokerage for trades executed thru ECOS, trades where cash upfront has

been given prior to the execution of trades and trades executed less than a

board lot is fully negotiable.

Clearing Fee - 0.03% subject to max of RM1000

Contract Stamp - 0.1% subject to max of RM200


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FUNCTIONS OF ADA OF BURSA DEPOSITORY

Account Management

Opening of CDS accountUpdating of Account Particulars

Closing of CDS account

Reactivation of CDS account

Balance Enquiries

Transfer of Securities

Transfer of shares under the Approved Reasons For Transfer by Bursa Depository

Deposit Of SecuritiesDeposition of Securities

Deposit of physical shares certificate within the prescribe period by BursaDepository


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FUNCTIONS OF ADA

Account Opening

What is a Central Depository System?

The CDS acts as a means of representing ownership and movement of securities.CDS account holders enjoy the conveniences if obtaining electronic

securities transfer and trade settlement


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FUNCTIONS OF ADA

Who may open a CDS account?

The CDS account may be opened by:

An individual who has reached the age of eighteen (18) years as of the application date.

A corporation within the context of Section 4 of the Companies Act 1965.

Any corporate body that is incorporated within Malaysia and is by notice, published in the Gazette, declared as a

public authority or an instrument or agency of the Government of Malaysia or of any Malaysian State.

A society under any written law relating to co-operative societies.

A trustee or trust corporation duly constituted under any written law.

Any society registered under the Societies Act 1966.Statutory bodies incorporated under an Act of Parliament.

In general, a CDS account can only be opened if the persons are opening it either as a beneficial owner or as an Authorised

Nominee.


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FUNCTIONS OF ADA

Why need to open a CDS Account

CDs account is to allow buy and/or sell shares, and to carry out other CDS transactions on all equity annon equity counters (i.e. bonds, loan sticks, warrants, etc.) which have been prescribed into the CDS.

How to Open Account

Come Personally Or Sign in the present of a Dealers Representative or Notary Public or Authorise Officerof the ADA /Exempt Dealer/Malaysian Embassy / High Commission Consulate.

Individual need to :Complete the Opening of Account form and two (2) Specimen Signature Cards.

ii. For Malaysians, submit the documents together with two (2) certified true copies of your Malaysian

National Registration Identity Card (NRIC). As for foreigners, you need to pay the Account

Opening fee and submit two (2) certified true copies of your passport .

Corporate: Complete the Opening of Account form and two (2) Specimen Signature Cards.

ii. Submit the above documents with two (2) copies of all necessary supporting documents (e.g.

Certificate of Incorporation, Board Resolution, etc) together with the Account Opening fee.


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FUNCTIONS OF ADA

Updating Account Particulars

The CDS account particulars may be change:

i) Via written request

ii) Via completion of Application Of Updating Of Account Particulars Form

Closing Of Account

An account can only be closed if there is no outstanding transactions/balances remaining in that account.

Client can complete and submit the Application for Closing of Account form or write a letter to

close the account.


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FUNCTIONS OF ADA

TRANSFER OF SECURITIES

The CDS account particulars may be change:

Two broad categories :

i) No Change Of Beneficial Ownership

ii) Change in Beneficial Ownership family members, take over offer, transfer involving Government

Authorities ,Pledge or Charge, reasons with prior approval from Bursa Depository

Account Balance Enquiry

i) Come in person

ii) Authorisation to dealers representative ( either standing instruction or with expiry date)

iii) Authorisation via written request one off

Documents

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