Boost for foreign investors with introduction of ISS this week

Kuala Lumpur, 12 July 1999

Malaysia will implement the institutional settlement service (ISS) this week for the settlement of all on-market institutional trades. With the ISS, delivery-versus-payment (DVP) will be achieved for all trades on the Kuala Lumpur Stock Exchange (KLSE).

The key feature of ISS is that membership in SCANS is now extended to non-broker institutions. Clearing membership in SCANS has thus far been limited to stockbroking companies. The new service would allow for the exchange of funds directly between SCANS and non-broker clearing members including custodian banks.

In announcing this, Securities Commission (SC) Chairman Encik Ali Abdul Kadir said the introduction of ISS, which is an optional service would benefit, amongst others, foreign institutional clients who trade in Malaysian securities.

Encik Ali said that the ISS is a significant step towards reducing risks in the clearing and settlement system. The implementation of ISS is in step with the National Economic Recovery Plan which calls for measures to enhance confidence in the KLSE as an attractive investment market. The DVP model, on which ISS is based, is benchmarked against best practices internationally.

To ensure that the ISS is business and user friendly, the SC had actively worked with relevant market participants and regulatory bodies.

The SC views the development of a sound clearance and settlement system as a matter of high priority. In this regard, the SC had adopted a multi-pronged approach. Initiatives taken so far include the full immobilisation of all securities listed on the KLSE into the central depository and the closing of the trade settlement mismatch with the successful implementation of final settlement on T+5.

A separate Press announcement by the KLSE will provide the details of the ISS.


Issued on behalf of the Securities Commission. Members of the press requiring assistance may contact the Corporate Affairs Department at tel no. 03-654 8513 (Ann Teoh) / 03-654 8625 (Soh Beng Choo) or fax no.: 03-651 5078.

Background information:

The Securities Commission, a statutory body reporting to the Minister of Finance, was established under the Securities Commission Act 1993. It is the sole regulatory agency for the regulation and development of capital markets. The SC has direct responsibility for supervising and monitoring the activities of market institutions, including the exchanges and clearing houses, and regulating all persons licensed under the Securities Industry Act 1983 and Futures Industry Act 1993.

More information about the SC is available on its homepage at
about the SC
The Securities Commission Malaysia (SC) was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). We are a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market.

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