Saturday, September 18

Bursa Malaysia implements RENTAS for BMDC settlements


KUALA LUMPUR: Bursa Malaysia Bhd has started using the Real-time Electronic Transfer of Funds and Securities System (RENTAS) for settlement of payments on Bursa Malaysia Derivatives Clearing Bhd (BMDC).

In a statement yesterday, it said, RENTAS would ensure greater efficiency and resiliency of the payment settlement mechanism, enabling BMDC to use the system to collect settlement obligations from clearing participants before the start of the morning trading session.

“It also allows BMDC to perform intra-day margin calls for the morning and the afternoon trading sessions. This is a step forward from the previous manual settlement process,” it said.

Bursa Malaysia chief executive officer, Datuk Seri Tajuddin Atan, said the settlement of derivatives products via RENTAS was the first phase of Bursa Malaysia’s plan to fully integrate the system into its settlement processes.

“The next phase will see the onboarding of the Securities Market’s settlement onto the same platform.

“RENTAS will substantially reduce settlement risks for the exchange, particularly in interbank fund transfers and exchange for value settlement systems, such as those for securities settlements,” he said, adding that the system would enhance the efficiency of the settlements payments mechanism.

RENTAS is the only large value payment system in Malaysia, operated and managed by Bank Negara Malaysia.

It provides multi-currency Real Time Gross Settlement of interbank fund transfers, multi-currency debt securities settlement and depository services.

“By implementing its settlement through RENTAS, BMDC would be fully observing one of the Principles for Financial Market Infrastructures (PFMI), which is conducting money settlement using central bank money,” said Bursa Malaysia, adding that the PFMIs were part of a set of 24 key standards that the international community considers essential to strengthening and preserving financial stability. — Bernama