[OR] [KIB] [E3] [CBS] [2] [ITo] Establish Impact Tolerances

CBS-2 Clearing & Settlement Services 

Introduction

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.

Table P4: Establish Impact Tolerance for CBS-2

Note: MTD and MTDL thresholds are indicative and aligned with operational resilience principles outlined in the 2025 BNM Discussion Paper.

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
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CBS-2 Clearing & Settlement Services
CBS-2 DP	CBS-2 MD	CBS-2 MPR	CBS-2 ITo	CBS-2 SuPS	CBS-2 ST

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