Education
| Trading Procedures : | |||||||||
The following is a brief outline of how trade transactions are effected on Bursa Malaysia:
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- This order will be keyed into the WinSCORE (SCORE is Bursa Malaysia's fully automated trading system) terminal at the stockbroking company. The order is then relayed through the WinSCORE system to Bursa Malaysia's central computers. An order confirmation is immediately routed back to the stockbroking company.
- The order for the shares will then be matched automatically by the system, assuming of course that it is matchable in the first place.
The price at which an order is matched is not fixed by Bursa Malaysia. All prices are determined by the market forces of supply and demand through a process of bids and offers.
The price transacted for a buy order will be either 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. In other words, in every transaction, a security is sold to the highest bidder and purchased from the lowest offeror.
- Once the order has been matched, a trade confirmation is printed out at the broker's office providing details such as the original order number, stock number, price and quantity matched and the counter-party stockbroking company.
The remisier in turn confirms with his client that he has bought the specified number of shares and the price at which it was bought.
A sell order is carried out in the same manner. To facilitate differentiation and to avoid confusion, the stockbroking company at its office have different coloured slips for sell orders and buy orders.
- The broking house will then send out contract notes, also in different colours for buying and selling, to the clients giving details of the transaction such as brokerage, stamp duty and clearing fees payable and, of course, the cost of the purchase or proceeds of the sale.
- Under the CDS, there is no physical delivery of shares. Instead, the CDS uses a simple book entry system to keep track of the movement of shares arising from trades effected 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 12.30pm on T+2 and buyer's account will be credited on T+3.
The buying client will be informed by his remisier that the shares have been transferred to his CDS account. However, the buying client cannot further trade in those shares until he has settled the payment due.