Strengthening Financial Market Infrastructure – BNM – Channel W

Strengthening Financial Market Infrastructure – BNM

As part of the strategy to enhance transparency, visibility and strengthen surveillance, the Financial Markets Committee, FMC, and Bank Negara Malaysia, BNM, are pleased to announce the operationalisation of segregated securities accounts at the large value payment system, Real-time Electronic Transfer of Funds and Securities System, RENTAS operated by Payments Network Malaysia Sdn Bhd – PayNet.

Bank Negara Malaysia also mention, this is part of the measures to further develop the Malaysian bond market that have been announced in the second series of initiatives by the FMC and BNM on 13 April 2017.

With the appropriate system infrastructure in place, investors will be provided with greater access to information on the Malaysian bond market, hence facilitating a more informed decision making and better risk management.

Information such as investor type and flows in the government bond market for both non-resident and resident investors will be made available in the Bond Info Hub website on a more regular and timely basis. With a system-based implementation, there will be better efficiency and less reporting burden for investors, which will lower the cost of investing in the Malaysian bond market.

The RENTAS segregated securities account will be operationalised in two phases with Phase I commencing on 21 May 2018 while full compliance is on Phase II by 30 September 2018 to allow for efficient transitioning into the segregated account rules. Post 30 September 2018, all transactions involving RENTAS debt securities will only be facilitated through the segregated securities account. Given the depth and breadth of the onshore bond market, there is sufficient liquidity to continue facilitating the settlement of ringgit bonds onshore.

To facilitate investors’ transition into the segregated accounts, investors may consult with all local and global custodian banks, including International Central Securities Depository (ICSD) which will be onboard the RENTAS segregated securities accounts. The list of custodian banks and ICSD is attached. The segregated securities account rules are specific to RENTAS, which only involves settlement of bonds and does not cover the settlement of equities.

 

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