FIN346 Chapter 7

What is the primary purpose of the Central Depository System (CDS)?

• To hold physical share certificates

• To provide a computerized book-entry system for securities

• To manage stockbroking transactions

• To facilitate international trading

Central Depository System (CDS)
When was the CDS introduced in Malaysia?

• 1983

• 1993

• 1998

• 2002

Central Depository System (CDS)
What is the main benefit of the CDS for investors?

• Reduced costs and risks associated with physical scrip settlement

• Faster access to international markets

• Higher dividends on shares

• Guaranteed returns on investments

Who is authorized to provide CDS facilities to investors?

• Bursa Malaysia Securities Clearing Sdn. Bhd.

• Securities Commission

• Authorized Depository Agents (ADAs)

• Institutional investors

How many CDS accounts can an individual investor open with a single ADA?

• One

• Two

• Zero

• Unlimited

Fixed Delivery and Settlement System (FDSS)
What is the settlement period under the Fixed Delivery and Settlement System (FDSS)?

• T+1

• T+2

• T+3

• T+5

Which of the following is NOT a type of clearing and settlement under FDSS?

• Contracts Done on Ready Basis

• Payment for Buying-In Contracts

• Contracts Done on Immediate Basis

• International Settlement Services

What does "T+3" mean in the context of settlement?

• Trade date plus 3 hours

• Trade date plus 3 days

• Trade date plus 3 weeks

• Trade date plus 3 months

Institutional Settlement Services (ISS)
What is the primary objective of Institutional Settlement Services (ISS)?

• To reduce settlement risk exposure for institutional investors

• To provide faster access to international markets

• To increase trading volumes

• To offer higher dividends

What is the settlement basis for ISS transactions?

• Delivery versus Payment (DvP)

• Payment versus Delivery (PvD)

• Cash on Delivery (CoD)

• Immediate Payment