Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 1

Securities Systems* have a primary responsibility to their users** and other stakeholders. They must provide effective low cost processing. Services should be priced equitably.

* Securities Systems = depositories, settlement and clearing systems
** Users = customers of the securities system, and all other parties to whom the securities system owes a duty of care

1.	Is the board that governs the depository answerable to its users?	Depository (Malaysian Central Depository or MCD) The Board of MCD (Malaysian Central Depository) represents its shareholders, namely KLSE, the Association of Banks Malaysia (ABM) and private interests. KLSE representatives comprise senior exchange officials, government appointees to look after the public interest and representatives from member companies/ADAs (MCD's Authorised Depository Agents (ADA), which, at present are KLSE's Member Companies) Some ABM members are also ADMs (MCD's Authorised Direct Members) Users are therefore represented on the Board, to which MCD Management is answerable on matters regarding policies and operations. Clearing House (Securities Clearing Automated Network Services or SCANS) Yes. Stockbroking companies (Trading Clearing Members) are represented on the SCANS Board of Directors.
2.	Does any single organisation, or sector (e.g. brokers, custodians, Stock Exchange) have a large voting position at the board of the depository?	Yes. KLSE holds 55% of the issued and paid-up capital of MCD and 100% of SCANS.
3.	Is there cross subsidisation of products (e.g. international services subsidised by local ones or transaction costs subsidised by asset servicing charges)?	No. All fees and charges are the same for all classes of participants.
4.	What process is in place at the depository to ensure that it meets the needs of all its stakeholders (e.g. institutions, broker dealers, retail investors, issuers)?	Generally: MCD rules and guidelines are comprehensive for users on the manner securities are to be dealt with in CDS including their rights and duties. Dialogue sessions, meetings, workshops, etc. are continually held with participants / users of CDS, i.e. ADAs, ADMs, custodian banks, depositors / investors, issuers, share registrars, issuing houses and relevant market participants, to consult and solicit feedback / inputs on CDS operations and development. Training provided to participants to ensure familiarization with the CDS. More specifically: Technical Related Needs Handled by Facilities Management Division, KLSE (FMD) through its Helpdesk FMD will consult with relevant party wherever the problem and solution require its involvement Other Queries / Complaints User Relations, MCD (UR) handles general queries / complaints received via fax, e-mail, letter and telephone. UR will consult and/or channel the queries to relevant departments. The MCD Call-Direct service allows investors to access their CDS accounts via telephone 24 hours a day. Training provided to participants to ensure familiarization with the CDS.
5.	What is the communications strategy of the depository to its stakeholders and how is this run?	Delivery of Information Information is channeled to ADA/ADM via circulars, CDS screens, CDS Newsletter and broadcast message. Share registrars are informed through circulars and CDS Newsletter Depositors receive information through the media, notices and monthly statements. Rules and procedures manual of the MCD Feedback on Information Delivered Stakeholders are free to send feedback via e-mail, telephone, letter and fax UR will answer any queries that need to be answered.