Malaysia's derivatives exchange has launched a new derivatives clearing and settlement system designed to provide greater speed and efficiency.
Bursa Malaysia Derivatives Berhad's (BMD) new clearing and settlement system went live on 27 February and is intended to pave the way for the introduction of derivative futures and options products at the southeast Asian exchange.
The benefits of the new system include a higher capacity for the clearing and settlement of high volume trades. Increased automation comes from the system's web-based technology and online real-time electronic request and approval processes, and electronic delivery of documents for physically delivered products.
The new system supports BMD’s earlier adoption of the CME Globex trading platform for futures and options.
“Exchanges around the world are facing intense competition,” said Dato’ Tajuddin Atan, CEO of Bursa Malaysia and chairman of BMD. “To compete, we must pursue ways to reduce friction in the marketplace and create a more efficient trading, clearing and settlement environment.”
Bursa Malaysia’s derivatives trading revenue jumped 36% to RM51.2 million (US$17 million) last year as securities average daily trading value increased 14% to RM1.79 billion (US$0.6 billion), securing a sharp increase in profits for the exchange.
In December, Bursa Malaysia introduced new abilities on its derivatives market which allow its members to trade block-sized orders. The bourse’s new negotiated large trade facility is intended to let large trades execute at a single price, thereby minimising market impact cost and increasing certainty of execution.