250 Historical development of BM and its online trading system

Historical development of BM and its online trading system

The first formal securities business organisation in Malaysia was established since the early thirties. It was then known as the Singapore Stockbrokers’ Association. Subsequently, it was reregistered as the Malayan Stockbrokers Association in 1937. Then, it was merely a group of stockbrokers coming together on issues on securities trading. Public trading of shares in Malaysia began only in 1960 with the setting up of the Malaysian Stock Exchange. The stock exchange adopted the Board system where it had trading rooms in Singapore and Kuala Lumpur, and trading was dealt with via direct telephone lines. It was subsequently renamed as the Stock Exchange of Malaysia. Due to the political realities in 1965 arising from the secession of Singapore from Malaysia, the Stock Exchange of Malaysia then renamed itself again as the Stock Exchange of Malaysia and Singapore. Although it is renamed, both countries remain trading on the same trading platform.

The Stock Exchange of Malaysia and Singapore thereafter divided itself into the Kuala Lumpur Stock Exchange Berhad and the Stock Exchange of Singapore in 1973. The event that triggerred this division is the cessation of currency interchangeability between Malaysia and Singapore. The Kuala Lumpur Stock Exchange which was incorporated on 14 December 1976 as a company limited by guarantee, took over the operations of the Kuala Lumpur Stock Exchange Berhad (KLSE) in the same year, and Malaysian shares cease trading at Stock Exchange of Singapore.

In line with Malaysia’s vision towards an efficient and developed capital market, computerised trading was introduced in 1992 with the introduction of the System on Computerised Order Routing and Execution(SCORE) automated trading system.The need for a trading floor at KLSE premises was eliminated with the implementation of SCORE.

Thereafter, the Central Depository System (CDS) implemented in 1993, i.e., the automated clearing and settlement system of the KLSE replaced the practice of holding and moving the physical scrips of quoted shares by introducing a safe and dependable computerised book entry system.

Share application through the Automated Teller Machines (ATM) was created to enable public iinvestors to apply for initial public offering (IPO). MCD Call-Direct is an interactive voice response system that allows users to obtain their CDS account balances with a quick telephone call. KLSE introduced Electronic Share Application in July 1999.

On 14 April 2004, KLSE changed its name to Bursa Malaysia Berhad (BM), following a demutualisation exercise. This exercise was meant to enhance BM’s competitive position in line with global trends in the exchange sector by making it more customer-driven and market oriented.

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