Markets Work: How Bursa Malaysia Is Navigating COVID-19

Nasdaq is committed to the resiliency of the global market ecosystem during this time of unprecedented change in our industry. Our Market Technology community, which includes market infrastructure organizations spanning more than 50 countries, is truly keeping markets up and running. With exchanges laying the foundation for capital formation and job growth, these organizations will continue to play a critical role in the health and recovery of local economies around the world and greater global capital markets ecosystem.

We sat down with Ashish Jaywant Rege, Director of Group Technology at Bursa Malaysia, to discuss how his exchange is managing the current environment for their stakeholders, members and employees.

1. How is COVID-19 affecting your client base? Are you changing how you interact and communicate as a result? 

COVI9-19 has had a profound impact on all of us, as individuals, society and organisations at large. At Bursa Malaysia, the safety and wellbeing of all our stakeholders have remained our utmost priority. In addressing these matters, the exchange has implemented wide-ranging measures.

For our retail investors, we accelerated the release of a new feature on our digital depository mobile application called Bursa Anywhere. The new feature allows our depository account holders to reactivate their dormant and inactive accounts online without the need to visit their brokers physically.

We have also acknowledged the challenges experienced by our listed issuers. Temporary measures have been introduced to ease compliance by listed issuers and give them greater focus on prioritising their resources to overcome their challenges. 

For market intermediaries, like brokers, investment banks and custodians, they have been given the option to work-from-home via the mobility rules which have been implemented since 2018. The exchange has shared guidance on system access with the industry, which has facilitated the effectiveness of our market intermediaries to work-from-home.

2. How have your volumes changed over the first quarter? And, how are your systems impacted by the current market environment?

Amidst the exceptionally volatile and uncertain market environment, we saw higher volumes in both the Securities and Derivatives Market. In the first quarter this year, our Derivatives Market registered several new highs in trading volume and open interest. The higher volumes have had no impact on our systems, and the exchange has continued to operate without any disruptions.

We are closely monitoring the utilisation levels against our thresholds, both at an infrastructure and application level, to ensure we continue to perform our roles effectively. 

3. How do you prepare for this type of situation to help ensure a resilient, operational environment? 

At the exchange, we have activated Split Office Operations, with staff stationed from our Main Office, Disaster Recovery Centre and Work-from-Home. The number of external meetings and events have been reduced to favour video conferencing or virtual meetings. On 29 April 2020, Bursa Malaysia conducted its 43rd Annual General Meeting (“AGM”) in an entirely virtual manner, the first for the company and Malaysia. In this current environment, companies will need to review the arrangements required to conduct their AGMs, and the exchange seeks to provide our listed issuers guidance based on our experience, to leverage on technology and help promote wider participation from their shareholders. 

Market management measures (e.g., circuit breakers, static and dynamic price limit) are in place and known to participants to manage excessive volatility. Robust clearing funds, margins and deposits are also in place to ensure clearing and settlement risks are managed.

We will continue to remain vigilant, monitor system performance and to prioritise changes that will help market participants operate in a fair, secure and orderly market environment. 

4. What are some of the things you’re most happy to have accomplished over the first part of this year amidst a truly chaotic market environment?

I am happy with the way the technology team at Bursa Malaysia has worked in this challenging environment. Technology has emerged as a powerful enabler that has helped various market participants overcome this adverse situation while allowing the exchange to continue focusing on our long-term objectives. It has been an opportunity to demonstrate how technology can accelerate our digital transformation initiatives. Remote working, digitalising processes and many other uses of technology have delivered new efficiencies in this new normal.

My team remains highly motivated and will continue to build on our digital infrastructure and have in place an effective platform to support a resilient capital market ecosystem.

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