Clearing and Settlement Quiz

What is the purpose of the Central Depository System?

• To provide convenience of electronic securities transfer and trade settlement

• To accept securities and stocks from each other

• To manage risks in the stock market

• To offer clearing and settlement services

What is the main function of a Clearing House?

• To operate on a Delivery versus Payment (DvP) basis

• To manage risks and minimize systematic risks

• To provide safe custody facilities and services

• To carry on financial services business

What is the settlement period for contracts on Bursa Malaysia utilizing the Fixed Delivery and Settlement System (FDSS)?

• T+1

• T+5

• T+3

• T+2

Who are the members that can participate in the Central Depository System as Authorized Depository Agents (ADAs)?

• Issuers & registrars, issuing houses, BMSC, Bursa Malaysia

• Clearing participants, trading clearing participants, non-trading clearing participants, Central depository

• Stock broking companies, resident banks, financial institutions, Central depository

• Banking community, government institutional investors, insurance companies, unit trust

What is the purpose of the Automated Clearing and Settlement System of the Exchange?

• To offer settlement and clearing services with facilities for clearing contracts

• To reduce costs and risks previously associated with a physical scrip-settlement environment

• To enhance market liquidity for quicker receipt of shares or cash

• To provide convenience of electronic securities transfer and trade settlement

What is the objective of Bursa Malaysia Securities Clearing Sdn. Bhd. (BMSC)?

• To operate on a Delivery versus Payment (DvP) basis

• To manage risks and minimize systematic risks

• To offer settlement and clearing services with facilities for clearing contracts

• To accept securities and stocks from each other

What is the main benefit of the Central Depository System for participating organizations?

• Convenience of electronic securities transfer and trade settlement

• Reduced costs and risks previously associated with a physical scrip-settlement environment

• Safekeeping of shares, custodian and pledging services

• Able to obtain up-to-date information on the shareholdings

What is the main purpose of the Institutional Settlement Service (ISS) offered by Bursa Malaysia?

• To facilitate settlement on T+3 for non-trading clearing participants

• To offer settlement and clearing services with facilities for clearing contracts

• To operate on a Delivery versus Payment (DvP) basis

• To provide safe custody facilities and services

What is the main function of the Central Depository System for other users such as issuers, registrars, and issuing houses?

• To provide convenience of electronic securities transfer and trade settlement

• To offer clearing and settlement services

• To enhance market liquidity for quicker receipt of shares or cash

• To reduce costs and risks previously associated with a physical scrip-settlement environment

What are the two settlement modes offered by Bursa Malaysia for clearing and settlement of contracts?

• Fixed Delivery and Settlement System (FDSS), Automated Clearing and Settlement System

• Clearing Partnership, Trading Clearing Participant (TCP)

• Institutional Settlement Service (ISS), Delivery versus Payment (DvP) basis

• T+5, T+3