ACG CROSS TRAINING

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Bursa Malaysia Depository Sdn Bhd
ACG CROSS TRAINING
Merits and Demerits of Direct and Indirect
Account Method
27th 28th June 2006
Bursa Malaysia and its Group of Companies (Bursa
Malaysia) reserve all proprietary rights to the
contents of this Presentation. No part of this
Presentation may be used or reproduced in any
form without the Bursa Malaysias prior written
permission. This Presentation is provided for
information purposes only. Neither the Bursa
Malaysia nor the Presenter make any warranty,
express or implied, nor assume any legal
liability or responsibility for the accuracy,
completeness or currency of the contents of this
Presentation. It is your responsibility to verify
any information before using or relying on it.
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AGENDA

• Introduction
• - Bursa Malaysia Depository Sdn Bhd
• - CDS Users
• - Benefits of CDS
• - Depositorys Services
• - Account Structure
• - Account Status
• - Statistic
• Differences Between Direct Indirect Account
• Merits of Direct Indirect Account
• Demerits of Direct Indirect Account

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INTRODUCTION
BURSA MALAYSIA DEPOSITORY SDN BHD
In November 1992 Bursa Malaysia Depository Sdn
Bhd (formerly known as Malaysian Central
Depository Sdn Bhd) began providing the Central
Depository System (CDS) to the investing public
through the opening of CDS accounts. It was a
system designed to revolutionise the securities
industry in Malaysia.
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CDS USERS
Provides depository services to the following
users through the Central Depository System
(CDS)- ? Authorised Depository Agent
(ADA) ? Authorised Direct Member
(ADM) ? Issuer ? Issuing house ? Share
registrar ? Account holder / depositor ? Clearin
g House
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BENEFITS OF CDS

• Increased efficiency Via a computerised
  book-entry system, it has improved the efficiency
  of securities transactions e.g. on-line transfer
  of securities
• Increases the capacity of clearing and settlement
  of securities
• Reduces settlement risk - eliminate lost, fraud
  or misplaced certificate
• Automatic registration - save time and costs

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DEPOSITORYS SERVICES
Core services provided are as follows- ?
Account openings ? Deposit of
securities ? Transfer of securities ? Withdrawal
of securities ? Book-entry settlement ? Initial
Public Offerings (IPOs) ? Corporate
exercises ? Provision of information
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ACCOUNT STRUCTURE

• Direct Account
• held directly in the name of individual,
  corporate body, institutional investors and etc.
• Indirect Account
• held in the name of nominees where the beneficial
  owner details are captured
• one nominee account one beneficial owner
• nominees account can only be opened by Authorised
  Nominees i.e. bank/ broker/trust companies
• Certain relaxation was introduced whereby nominee
  company can operate omnibus account effective 21
  October 2005.

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ACCOUNT STATUS

• Active Account
• Accounts having transaction or balance for the
  last 3 years.
• Inactive Account
• Accounts with balance but without any transaction
  for the last 3 years.
• Dormant Account
• Account without balance and transaction for the
  past 3 years.

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STATISTIC AS AT 31 MAY 2006

• No. of Participants -
• Authorised Depository Agent (ADA) - 37
• Authorised Direct Member (ADM) - 27
• No. of Participants Branches -
• Authorised Depository Agent (ADA) - 127
  Authorised Direct Member (ADM) - 1
• No. of CDS Accounts - 3.54 million
• No. of Indirect CDS account - 0.56 million
• No. of Direct CDS account - 2.98 million

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DIFFERENCES BETWEEN DIRECT INDIRECT ACCOUNT
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DIFFERENCES BETWEEN DIRECT INDIRECT ACCOUNT
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MERITS OF DIRECT INDIRECT ACCOUNT
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MERITS OF DIRECT INDIRECT ACCOUNT
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DEMERITS OF DIRECT INDIRECT ACCOUNT
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DEMERITS OF DIRECT INDIRECT ACCOUNT