Below are the trading procedures:
- Open a trading account and a Central Depository System (CDS) account with a Participating Organisation (PO).
- You will then be engaged with a licensed dealer or a remisier.
- Give an order to your remisier to buy or sell a specified number of shares of a company at a specified price.
- This is when you will need to provide the CDS account number for order entry.
Placing an Order
- Your orders are keyed into the Automated Trading System (ATS) at the PO.
- Orders can also be keyed-in via the POâ€™s internet trading system.
- The order will then be relayed to Bursa Malaysia's trading engine.
- The order confirmation is immediately routed back to the PO, and onward to your internet trading system (if any).
- Orders are matched automatically by the system.
- All prices which orders are matched are determined by market forces of supply and demand through a process of bids and offers.
- In every transaction, a security is sold to the highest bidder and purchased at the lowest offer.
- The price transacted for a buy order will either be at the same price keyed in, or lower if the seller's price is below the buyer's price.
- For a sale transaction, the price will be the same or higher if the buyer's order is higher.
- Once the order is matched, a trade confirmation is printed out, providing details such as the original order number, stock number, price and quantity matched and the counter-party PO.
- The remisier in turn confirms with his client that he has bought/sold the specified number of shares and the price at which it was bought/sold.
- To facilitate differentiation and to avoid confusion, the PO has different coloured slips for 'sell' and 'buy' orders.
- The broking house will then send out contract notes to you, giving details of the transaction such as brokerage, stamp duty and clearing fees payable as well as the cost of purchase or proceeds of the sale.
Delivery and Settlement (T + 3)
- The delivery and settlement for all normal transactions is 3 trading days after the transaction date (T), hence, the term T+3.
- There is no physical delivery of shares under the CDS. Instead, the CDS uses a simple book entry system to keep track of the movement of shares which arise from trades affected on Bursa Malaysia.
- For example, if you are a buyer of share A, your CDS account will be credited with Share A and the seller's account will show a debit of Share A.
- Sellers must have adequate shares in their CDS accounts by 12.30 pm on day 2 after the transaction (T+2) and buyer's account will be credited on T+3 with the shares.