Bursa Malaysia Enhances Central Matching Facility For Straight Through Processing In Trade Settlement
Bursa Malaysia has introduced the enhanced Central Matching Facility, an automated settlement system offering end-to-end electronic matching of trade and settlement details, between Trading Clearing Participants (stock broking companies) and Non-Trading Clearing Participants (custodian banks).
Dato' Tajuddin Atan, Chief Executive Officer of Bursa Malaysia, said, "The Exchange is stepping up efforts to improve the market framework to increase the efficiency of its market operation. The enhanced Central Matching Facility, together with the CDS-STP service introduced last month, is part of the initiatives introduced by the Exchange to reduce market friction and to be in line with international best practices and standards."
The Central Matching Facility allows market participants to enhance their back-office settlement operations by increasing the capacity to handle a higher number of pre-matched transactions, minimising settlement risks and errors and facilitating straight-through processing.
Through the Central Matching Facility, Clearing Participants will be able to upload post-trade settlement instruction files containing records of Depository Transfers and Institutional Settlement Service (ISS) transactions to the system for processing. Where there is matching for the ISS, the system will automate the creation of the ISS instructions.
With the new enhancements, the system will be able to further automate settlement instructions from multiple custodian banks and improve operational efficiency and turnaround time between the Clearing Participants.