---
title: [OR] [KIB] [E3] [CBS] [2] [ITo] Establish Impact Tolerances
description: [OR] [KIB] [E3] [CBS] [2] [ITo] Establish Impact Tolerances
image: https://blog.bcm-institute.org/hubfs/Kenangan%20Investment%20Bank%20Berhad%20Graphic%20Folder/Kenanga%20CBS%202/%5BOR%5D%20%5BKIB%5D%20%5BE3%5D%20%5BCBS%5D%20%5B2%5D%20%5BITo%5D%20Clearing%20%26%20Settlement%20Services.jpg
---
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###### Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey
# \[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] \[ITo\] Establish Impact Tolerances
[](https://cta-redirect.hubspot.com/cta/redirect/3893111/48d52e8f-4ce1-4b3f-8281-d865c450eba0)
In the landscape of modern banking, the ability to withstand operational disruptions is crucial for maintaining financial stability, client trust, and regulatory compliance. **CBS 2 – Clearing & Settlement Services** is a core function of Kenanga Investment Bank, responsible for ensuring the accurate and timely processing of trades, margin requirements, settlements, reconciliations, corporate actions, and reporting obligations.
Given its criticality, even a temporary disruption can have significant financial, regulatory, and reputational consequences.
This chapter focuses on **establishing impact tolerance** for CBS 2, defining the acceptable level of disruption in terms of time, data loss, and downstream effects. By setting these thresholds, the bank can proactively design operational resilience measures, allocate resources effectively, and ensure continuity under adverse scenarios.
### [](https://cta-redirect.hubspot.com/cta/redirect/3893111/0430108a-ef49-43aa-ac7d-ee6bb474eba8)
[Moh Heng Goh](https://blog.bcm-institute.org/ebook-or/author/moh-heng-goh) Feb 20, 2026
###### Operational Resilience Certified Planner-Specialist-Expert
### [![x \[OR\] \[KIB\] Legal Disclaimer Banner](https://no-cache.hubspot.com/cta/default/3893111/b6372811-fb39-4c3e-b0fc-b669eb2b0056.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/b6372811-fb39-4c3e-b0fc-b669eb2b0056)
### [](https://cta-redirect.hubspot.com/cta/redirect/3893111/0430108a-ef49-43aa-ac7d-ee6bb474eba8)**CBS-2 Clearing & Settlement Services **
#### Introduction
[![\[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] \[ITo\] Establish Impact Tolerances](https://no-cache.hubspot.com/cta/default/3893111/3943560a-1b5a-46e1-a8fa-bb0378c19077.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/3943560a-1b5a-46e1-a8fa-bb0378c19077)
In the landscape of modern banking, the ability to withstand operational disruptions is crucial for maintaining financial stability, client trust, and regulatory compliance. **CBS 2 – Clearing & Settlement Services** is a core function of Kenanga Investment Bank, responsible for ensuring the accurate and timely processing of trades, margin requirements, settlements, reconciliations, corporate actions, and reporting obligations.
Given its criticality, even a temporary disruption can have significant financial, regulatory, and reputational consequences.
This chapter focuses on **establishing impact tolerance** for CBS 2, defining the acceptable level of disruption in terms of time, data loss, and downstream effects. By setting these thresholds, the bank can proactively design operational resilience measures, allocate resources effectively, and ensure continuity under adverse scenarios.
##### **Purpose of the Chapter**
The purpose of this chapter is to guide readers through the rationale and methodology for determining **Maximum Tolerable Downtime (MTD)** and **Maximum Tolerable Data Loss (MTDL)** for each detailed process of CBS 2. Establishing impact tolerances:
- Helps quantify the risk exposure for each sub-process.
- Ensures regulatory expectations under operational resilience frameworks are met.
- Provides clarity on potential customers and market impacts if a disruption occurs.
- Serves as a benchmark for ongoing resilience improvements, testing, and monitoring.
[![Banner \[Table\] \[OR\] \[E3\] Establish Impact Tolerance](https://no-cache.hubspot.com/cta/default/3893111/627c33a8-714d-40af-9a2b-0d7957fb8afa.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/627c33a8-714d-40af-9a2b-0d7957fb8afa)
###### Table P4: Establish Impact Tolerance for CBS-2
| **Sub-CBS Code** | **Sub-CBS** | **MTD** | **MTDL** | **Customer Impact** | **Regulatory Impact** | **Impact Type** | **Current Resilience Status** | **Action Required** |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **2.1** | **Trade Capture & Validation** | **2 hours** | **15 mins** | **High: Delayed trade processing** | **High: Regulatory reporting delays** | **Financial & Operational** | **Moderate: Automated validation in place** | **Enhance monitoring; implement backup trade capture** |
| **2.2** | **Clearing Instructions & Netting** | **4 hours** | **30 mins** | **High: Disruption in netting & settlements** | **High: Potential regulatory breaches** | **Financial** | **Moderate: Netting system resilient** | **Introduce parallel netting checks** |
| **2.3** | **Margin & Collateral Management** | **2 hours** | **15 mins** | **High: Margin calls delayed** | **High: Non-compliance with BNM requirements** | **Financial** | **Moderate** | **Review collateral workflow; add redundancy** |
| **2.4** | **Settlement Execution** | **1 hour** | **5 mins** | **Very High: Missed settlements impact liquidity** | **Very High: BNM settlement reporting** | **Financial** | **High: Automated settlement engine** | **Conduct regular settlement drills** |
| **2.5** | **Funds & Securities Reconciliation** | **6 hours** | **1 hour** | **Medium: Late reconciliations** | **Medium: Reporting inconsistencies** | **Operational** | **Moderate** | **Strengthen reconciliation automation** |
| **2.6** | **Corporate Actions Processing** | **12 hours** | **2 hours** | **Medium: Delays in corporate actions** | **Medium: Regulatory notifications affected** | **Operational** | **Low** | **Implement corporate actions monitoring system** |
| **2.7** | **Exception & Fail Management** | **1 hour** | **5 mins** | **High: Unresolved trade exceptions** | **High: Regulatory breach if fails not reported** | **Operational & Compliance** | **Moderate** | **Enhance exception handling protocols** |
| **2.8** | **Regulatory & Financial Reporting** | **24 hours** | **1 hour** | **High: Late reports** | **High: Non-compliance with BNM** | **Compliance** | **Moderate** | **Automate reporting; schedule alerts for deadlines** |
| **2.9** | **Client & Counterparty Communication** | **2 hours** | **N/A** | **High: Delays in notifications** | **Medium: Client complaints** | **Reputational** | **Moderate** | **Implement communication redundancy and escalation** |
| **2.10** | **Technology, Controls & Monitoring** | **30 mins** | **N/A** | **High: Disruption in monitoring** | **High: Could amplify operational risk** | **Operational** | **Moderate** | **Upgrade monitoring tools; introduce failover controls** |
*Note: MTD and MTDL thresholds are indicative and aligned with operational resilience principles outlined in the 2025 BNM Discussion Paper.*
#### [![Banner \[Summing\] \[OR\] \[E3\] Establish Impact Tolerance](https://no-cache.hubspot.com/cta/default/3893111/5e80e50f-5e3e-44ea-8c43-16bf42d4f3b5.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/5e80e50f-5e3e-44ea-8c43-16bf42d4f3b5)
Setting **impact tolerances** for CBS 2 Clearing & Settlement Services provides a clear framework for operational resilience, defining how long and to what extent the bank can tolerate disruptions without causing severe financial, regulatory, or reputational damage.
By identifying the MTD, MTDL, and potential impact for each sub-process, Kenanga Investment Bank can prioritise investments in redundancy, automation, and monitoring, ensuring robust continuity plans are in place.
Continuous review and testing of these tolerances will further strengthen the bank’s readiness to respond to adverse events, aligning operational resilience strategies with regulatory expectations and client trust.
| Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey | | | | | |
| --- | --- | --- | --- | --- | --- |
| **eBook 3: Starting Your OR Implementation** | | | | | |
| **CBS-2 Clearing & Settlement Services** | | | | | |
| **CBS-2 DP** | **CBS-2 MD** | **CBS-2 MPR** | **CBS-2 ITo** | **CBS-2 SuPS** | **CBS-2 ST** |
| [![\[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] Clearing & Settlement Services](https://no-cache.hubspot.com/cta/default/3893111/53094a9e-b9dc-4967-94aa-5b0cdd746e71.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/53094a9e-b9dc-4967-94aa-5b0cdd746e71) | [![\[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] \[MD\] Map Dependency](https://no-cache.hubspot.com/cta/default/3893111/c8b0c61d-a5c2-4ea3-a543-40785b42eb7f.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/c8b0c61d-a5c2-4ea3-a543-40785b42eb7f) | [![\[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] \[MPR\] Map Processes and Resources ](https://no-cache.hubspot.com/cta/default/3893111/69977f4c-a192-42cd-83ba-53eff86f58a5.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/69977f4c-a192-42cd-83ba-53eff86f58a5) | [![\[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] \[ITo\] Establish Impact Tolerances](https://no-cache.hubspot.com/cta/default/3893111/3943560a-1b5a-46e1-a8fa-bb0378c19077.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/3943560a-1b5a-46e1-a8fa-bb0378c19077) | [![\[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] \[SuPS\] Identify Severe but Plausible Scenarios](https://no-cache.hubspot.com/cta/default/3893111/7a97e4f1-c32e-4a95-abd2-dde565c23c0b.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/7a97e4f1-c32e-4a95-abd2-dde565c23c0b) | [![\[OR\] \[KIB\] \[E3\] \[CBS\] \[2\] \[ST\] Perform Scenario Testing ](https://no-cache.hubspot.com/cta/default/3893111/4dfead65-2e7d-4c14-ac6f-431df6142c18.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/4dfead65-2e7d-4c14-ac6f-431df6142c18) |
[](https://cta-redirect.hubspot.com/cta/redirect/3893111/084e620a-46c5-419a-82ed-6a681d15c0b6)**[](https://cta-redirect.hubspot.com/cta/redirect/3893111/13a448f1-f09c-42da-a57e-0988e41658c5)Gain Competency:** For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the **OR-5000 Operational Resilience Expert Implementer course**, provide in-depth insights and practical toolkits for effectively embedding this model.
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#### **Comments:**
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