Kuala Lumpur, 15 December 2021 – Bursa Malaysia Berhad (“Bursa Malaysia” or the “Exchange”), has successfully completed its Dematerialisation Proof-of-Concept with technology partners, Digital Asset and VMware at the end of November.
Conducted together with industry collaborators, Macquarie Capital Securities and Maybank Investment Bank Berhad, this blockchain-powered proof-of-concept was undertaken to evaluate the potential of distributed ledger technology (“DLT”) to transform a dematerialised deposit process and explore its potential benefits to the securities ecosystem in the Malaysian capital market. This proof-of-concept, using Structured Warrants as a test case, was the first for the Exchange for the core equity business, and it follows the Securities Borrowing and Lending POC in 2019 and the Tokenised Bonds in Labuan POC in 2020.
The Dematerialisation Proof-of-Concept successfully demonstrated that by adopting smart contracts running on a blockchain network, multiple parties can share business processes that are standardised and automated. Given the scope of this proof-of-concept, further assessment will be required to verify the technology’s viability for other products with greater complexities than Structure Warrants and for other business processes in the securities markets.
“With digital innovation rapidly reshaping the global capital markets landscape, it is pivotal for us to widen our knowledge and readiness in pursuing transformative technologies to offer efficient solutions for our marketplace,” said Datuk Muhamad Umar Swift, Chief Executive of Bursa Malaysia. “We are encouraged by the results of the Dematerialisation Proof-of Concept which resulted in a more efficient and a lower-risk process. This is a crucial milestone in Bursa Malaysia’s assessment of next-generation technologies for the Exchange.”
“We are pleased to support Bursa Malaysia in this project which takes us a step closer to the digitalisation of the issuance and management of structured warrants, allowing issuers to stay focused on broadening their product offerings and raising awareness and education in structured warrants, thus ensuring a more robust and vibrant market,” said Dean Herbert, Head of Listed Product Distribution, Macquarie Commodities and Global Markets
“We are excited to have been part of this innovative proof-of-concept around the dematerialisation of structured warrants,” said Azzahir Azhar, Head of Investment Management, Maybank Investment Bank Berhad. “The proof-of-concept not only provided us with valuable insights into potential transformative technologies within the securities industry, but also demonstrated how efficiency of lifecycle workflows in a paperless environment can be increased without compromising security.”
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