KUALA LUMPUR, Dec 13 — Bursa Malaysia Bhd has completed its dematerialisation proof-of-concept (POC) with technology partners Digital Asset and VMware at the end of November.
Conducted together with industry collaborators, Macquarie Capital Securities and Maybank Investment Bank Bhd, Bursa Malaysia said this blockchain-powered POC 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 POC, using structured warrants as a test case, was the first for the exchange for 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 POC successfully demonstrated that by adopting smart contracts running on a blockchain network, multiple parties can share business processes that are standardised and automated,” it said in a statement today.
The exchange said given the scope of this POC, further assessment would 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.
Chief executive officer Datuk Muhamad Umar Swift said with digital innovation rapidly reshaping the global capital markets landscape, it is pivotal for the exchange to widen its knowledge and readiness in pursuing transformative technologies to offer efficient solutions for our marketplace.
“We are encouraged by the results of the dematerialisation POC 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,” he said.
Macquarie Commodities and Global Markets’ head of listed product distribution Dean Herbert said the project would take the company 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.
Meanwhile, Maybank Investment Bank Bhd head of investment management said the POC not only provided the bank with valuable insights into potential transformative technologies within the securities industry but also demonstrated how the efficiency of lifecycle workflows in a paperless environment can be increased without compromising security. — Bernama
