KUALA LUMPUR, Malaysia, Sept 18 (Bernama-PRNewswire) — Bursa Malaysia Derivatives (“BMD”) has successfully re-launched the 5-Year Malaysian Government Securities (“MGS”) Futures contract (FMG5) with a revised settlement methodology. The FMG5 Contract’s settlement, which was previously cash-settled, is now physically delivered.
The revised methodology is based on a delivery-versus-payment (“DVP”) model which closely mirrors the DVP transfer of MGS in the over-the-counter market. The key modification is that Bursa Malaysia Derivatives Clearing Berhad will play the role of the central counterparty to facilitate the real-time delivery of the MGS. The DVP transaction is facilitated via the Securities Linked Settlement (“SLS”) functionality of Real-Time Electronic Transfer of Funds and Securities System (RENTAS) provided by Payments Network Malaysia Sdn Bhd (PayNet).
