Stockbroking Industry in Malaysia An Overview

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 order Buying To buy shares , customer must have sufficient funds to cover the cost of shares as well as the transaction costs. 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 to the CDS account to ensure sufficient shares for debiting on T+2 night .Payment to customer will be made on T+3 12.30 .

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. Confirmation Customer 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. Contract A 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

Trading Process

CLIENT
Phone Order

Order Confirmation by Phone

CIMB INVESTMENT BANK BHD DEALERS / REMISIERS

Client places order with dealers representative at CIMB Investment Bank Berhad(CIMB IB) Dealers representative keys order into WinSCORE (BURSAs fully automated system) Orders are matched automatically and order confirmation will be routed back to CIMB IB Dealers representative confirms the trade with client

BURSA

WinSCORE

SETTLEMENT CYCLE IN MALAYSIA T+3 SETTLEMENT

Clearing and settlement of Trades in Bursa trading system Cash 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

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 scheduled delivery 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.

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)

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

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

FUNCTIONS OF ADA OF BURSA DEPOSITORY

Account Management Opening of CDS account Updating 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 Securities Deposition of Securities Deposit of physical shares certificate within the prescribe period by Bursa Depository

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

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.

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 an non 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 Officer of 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.

FUNCTIONS OF ADA
Updating Account Particulars The CDS account particulars may be change: i) ii) Via written request 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.

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