BMSC and BMDC as Central Counterparty (CCP)
Overview
Bursa Malaysia Securities Clearing (“BMSC”) and Bursa Malaysia Derivatives Clearing (“BMDC”); are approved clearing houses, licensed by the Securities Commission of Malaysia, under Capital Market Services Act 2007. Acting as central counterparty (“CCP”) for equities and derivatives market, the two clearing houses alleviate settlement risk for the clearing participants. This is achieved by taking on the role of a counterparty for each contract traded through novation and giving an undertaking to meet the settlement obligation for such contracts.
CCPs have evolved from its traditional role as clearing and settlement facility to systemically important financial market infrastructure to ensure resiliency and integrity of the capital market. CCPs are required to adhere to global best practices for its risk management practices and disclosure.