A1258150232cdUFx

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• SECURITIES BORROWING LENDING

Karu Ramesh Kumar SBL Unit
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Contents
SBL Transaction Flow 5 SBL/RSS
Model 6 Lending Interest
9 Borrowing Request 11 SBL
Loan Tenure Termination 13 Collateral
/ Margin
15 Corporate Actions
17 Bursa SBL Fees 19 Schematic of
RSS / SBL 22 Comparison of RSS Features
Before Proposed 24 Important
Notice Contact Information
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• SBL TRANSACTION FLOW

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SBL TRANSACTION FLOW
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SBL TRANSACTION FLOW
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• SBL/RSS MODEL

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SBL/RSS MODEL
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• LENDING INTEREST

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LENDING INTEREST

• Minimum number of securities per counter to be
  lent is 50,000 units.
• Lenders to sign SBL Agreement with Bursa
  Clearing(S).
• Lenders to submit copy of SBL agreement and
  initiate their lending interest through Trading
  Clearing Participant(TCP)/Non Trading Clearing
  Participant(NTCP).
• Securities to be lent will be placed in the
  lending pool of the SBL system. If lending pool
  reserve drops below a certain percentage Bursa
  Clearing (S) may institute a recall exercise.
• Upon completion of matching, securities will be
  transferred from lenders CDS account to
  borrowers designated CDS account during batch
  processing on the effective date.
• Lenders must ensure securities are in his/her CDS
  accounts on the effective date.
• Lenders will receive confirmation from Bursa
  Clearing (S) on successful matching.
• At any given time, a certain percentage of
  securities from the lending pool will be set
  aside as reserve.

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• BORROWING REQUEST

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BORROWING REQUEST

• Authorised borrower (TCP) to sign SBL Agreement
  with Bursa Clearing (S).
• Ultimate borrowers who wish to participate in SBL
  scheme to sign agreement with Authorized Borrower
  (TCP) and initiate borrowing request through TCP.
• TCP is to open SBL account for each ultimate
  borrower and key-in borrowing request i.e.
  securities, quantity, effective date and
  borrowers designated SBL CDS account
  particulars.
• Permitted minimum number of securities to be
  borrowed is 100 units per securities counter.
• Authorized borrower must ensure that sufficient
  collateral has been deposited with Bursa Clearing
  (S) prior to submitting the borrowing request.
• Upon completion of matching, securities shall be
  transferred from lenders CDS account to
  borrowers designated CDS account during batch
  processing on the effective date.
• Borrowers will receive confirmation from Bursa
  Clearing (S) on successful matching.

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• SBL LOAN TENURE TERMINATION

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SBL LOAN TENURE TERMINATION

• Based on open tenure (i.e.no expiration or
  maturity date)
• SBL loan can be terminated at any time by
  Lenders,Borrowers and Bursa Clearing (S).
• SBL Loan can be recalled in full or partial by
  lenders or returned in full or partial by
  borrowers.
• Termination of SBL by Lenders Lender will
  receive the securities in their CDS account by
  Recall 3 days.

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• COLLATERAL / MARGIN

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COLLATERAL / MARGIN

• Borrowers are required to lodge sufficient
  collateral as margin with Bursa Clearing (S).
• Acceptable collateral include cash, approved
  securities, prescribed bank guarantee and foreign
  currencies
• Each collateral will be subjected to haircut on
  its value and
• Will be mark-to-market (MTM) daily.
• Margin is proposed to be maintained at 110
  against value of stocks borrowed. If at any time
  after MTM valuation, the margin falls below the
  maintenance level of 105 of value of stocks
  borrowed, the borrower must top-up the margin
  cover, one business day after being informed by
  Bursa Clearing (S).
• Interest on collateral - Interest will be paid
  on cash deposited (RM and foreign currencies) as
  collateral.

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• CORPORATE ACTIONS

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CORPORATE ACTIONS

• Dividend Entitlements
• Bursa Clearing (S) will provide the lending
  agent with a manufactured payment for
  securities on loan accompanied with a subsidiary
  tax voucher.
• However, if the Borrower does not owns the
  borrowed shares Bursa Clearing will pay a gross
  amount.
• All mandatory corporate actions which involve
  mandatory change to quantity of stocks such as
  Bonus Issues, Splits and Consolidation will be
  adjusted accordingly by Bursa Clearing.
• For other corporate actions, Lenders will have to
  recall the loans and borrower will have to return
  the securities.

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• BURSA SBL FEES

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BURSA SBL FEES

• Lending Fees

Type of Fee Bursa Proposed Rate ( or Amount)
Administrative fee Nil RM30.00
Processing fee per matched trade Nil RM20.00
Lending fee 2 2
Lending handling charges Nil 0 0.30 of MTM
Penalty fee 1 1
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BURSA SBL FEES (contd)

• Borrowing Fees

Type of Fee Bursa Proposed Rate ( or Amount)
CDS A/C opening fee RM10.00 RM20.00
Administrative fee Nil RM30.00
Processing fee per matched RM100.00 Bursa RM20.00
Borrowing fee 2.2 Bursa (0.50 - 1.50)
Penalty fee 1 1
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• SCHEMATIC OF RSS / SBL

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SCHEMATIC OF RSS / SBL
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• COMPARISON OF RSS FEATURES
• BEFORE NOW

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COMPARISON OF RSS FEATURES BEFORE NOW
Before Now Remarks
Designated RSS screens for RSS order entry Designated RSS screens for order entry to list out RSS/SBL designated CDS A/C CDS A/C used for RSS activities can be listed
No differentiation of trading accounts Designated RSS trading accounts to facilitate monitoring tagged to designated RSS/SBL CDS A/C RSS activities can only occur through specific trading accounts for easy monitoring by POs. Client code for RSS to be marked RSS  
None POs must sight and obtain copy of SBL agreement before opening RSS trading account.  
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COMPARISON OF RSS FEATURES BEFORE NOW (cont)
Before Now Remarks
No transfer restriction to settle RSS Transfer restriction - to maintain the current transfer restriction with some flexibility for SBL to settle RSS trades To facilitate lending arrangements
Identification of beneficial owner not possible Identification only up to first level i.e. instructing client of PO executing the RSS trade as per existing disclosure requirements for EANs For investigative purposes, intermediary will be required to identify the end-client
Transacted price zero tick rule POs must sight and obtain copy of SBL agreement before opening RSS trading account. Prevent spiraling down of prices in a downturn  
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COMPARISON OF RSS FEATURES BEFORE Now (cont)
Before Now Remarks
Stock limit no rules RSS trades limited to 10 of issued cap of security per trading day System monitored. RSS suspended for 1 settlement cycle if 10 breached
Reporting monthly reporting on lending transaction. Daily reporting will be produced by the Exchange System monitored. Gross short trades will be disclosed real-time
None. POs must obtain written confirmation from instructing client that client has securities to borrow before executing RSS trades CDS A/C used for RSS activities can be listed
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COMPARISON OF RSS FEATURES BEFORE Now (cont)
Before Now Remarks
Criteria for approved securities 1. Ave. daily mkt. cap. of more than RM2.0 billion for the past 3 months. 2. At least 100 million shares in public float. 3. Ave. monthly volume traded of more than 2 million units for the past 12 calendar months. 4. At least 2,000 registered shareholders. 5. 5 years uninterrupted after-tax profits track record 6. Stock limit no rules. 1. Ave. daily mkt. cap. of more than RM500 million for the past 3 months 2. At least 50 million shares in public float 3. Ave. monthly volume traded of more than 1 million units for the past 12 calendar months 4. Deleted 5. Deleted 6. No limit
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Important Notice

• This presentation has been prepared by CIMB
  Investment Bank Berhad (CIMB) exclusively for
  the benefit and internal use of investor in order
  to indicate, on a preliminary basis, the
  feasibility of possible transactions. Terms
  contained in this presentation are intended for
  discussion purposes only and are subject to a
  definitive agreement. All information contained
  in this presentation belongs to CIMB and may not
  be copied, distributed or otherwise disseminated
  in whole or in part without the written consent
  of CIMB.
• This presentation has been prepared on the basis
  of information that is believed to be correct at
  the time the presentation was prepared, but that
  may not have been independently verified. CIMB
  makes no express or implied warranty as to the
  accuracy or completeness of any such information.
• CIMB is not acting as an advisor or agent to any
  person to whom this presentation is directed.
  Such persons must make their own independent
  assessment of the contents of this presentation,
  should not treat such content as advice relating
  to legal, accounting, taxation or investment
  matters and should consult their own advisers.
• CIMB or its affiliates may act as a principal or
  agent in any transaction contemplated by this
  presentation, or any other transaction connected
  with any such transaction, and may as a result
  earn brokerage, commission or other income.
  Nothing in this presentation is intended to be,
  or should be construed as an offer to buy or
  sell, or invitation to subscribe for, any
  securities.
• Neither CIMB nor any of its their directors,
  employees or representatives are to have any
  liability (including liability to any person by
  reason of negligence or negligent misstatement)
  from any statement, opinion, information or
  matter (express or implied) arising out of,
  contained in or derived from or any omission from
  the presentation, except liability under statute
  that cannot be excluded.

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• CONTACT INFORMATION

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Contact Information

• For enquiries on SBL, please contact
• Karu Ramesh Kumar Khairul Azhar Isa
• SBL Unit SBL Unit
• T 03-2084 9887 T 03-2084 9602
• E karu.karuppiah_at_cimb.com E
  khairulazhar.isa_at_cimb.com

K