Thus, KLSE has found inaccuracies in a report published in Business Times today (August 23) titled 'No Same Day Settlement For Direct Deals' as follows:
The existing settlement procedure for direct transactions leaves a crucial one-day gap between the delivery of shares by a seller and payment by a buyer.
KLSE has no plans to allow direct deals to be handled under a separate settlement system for institutional investors.
Under KLSE's present settlement system, the settlement of direct business transactions between SCANS and stockbroking companies are effected on the same settlement day as follows:
Selling brokers are paid by SCANS on the same day the shares are delivered to SCANS.
Buying brokers are required to pay SCANS on the same day they received the shares from SCANS.
Therefore, the Business Times report stating that the existing settlement procedure for direct business transactions leaves a crucial one-day gap between the delivery of shares by a seller and payment by a buyer is inaccurate and incorrect.
With regards to direct business transactions and the Institutional Settlement Service (ISS), presently the KLSE offers ISS as an option for institutional investors to enhance the settlement of all on-market transactions. In respect of direct business transactions, KLSE is still reviewing the possibility of making the ISS available for direct business transactions.
Therefore, the Business Times report stating that KLSE has no plans to allow direct business transactions to be settled under ISS is also inaccurate and incorrect. In fact, KLSE's review to make ISS available for direct business transactions is to take into account the practical requirements and market concerns of industry participants including stockbroking companies, custodian banks and fund managers.
Because of the inaccuracies in the Business Times report on the matter of same day settlement, direct business transactions and ISS, the statements subsequently attributed to KLSE, unnamed dealers and unnamed fund managers are not reflected in the appropriate manner in the Business Times report.
