[OR] [KIB] [E3] [CBS] [2] [MD] Map Dependency

CBS-2 Clearing & Settlement Services

Introduction

The Clearing & Settlement Services (CBS 2) of Kenanga Investment Bank represents a critical component of its operational infrastructure, ensuring that securities transactions are accurately captured, cleared, and settled in a timely and secure manner. The efficient functioning of this CBS is fundamental not only to the bank’s internal operations but also to maintaining trust and compliance within Malaysia’s financial market ecosystem.

This chapter provides a detailed mapping of dependencies for CBS 2, highlighting the interactions between people, processes, technology, and third-party entities. Understanding these interconnections allows Kenanga Investment Bank to proactively manage risks, strengthen operational resilience, and meet regulatory expectations under frameworks such as Bank Negara Malaysia’s 2025 Discussion Paper on Operational Resilience.

Purpose of the Chapter

This chapter aims to equip readers with a clear understanding of the dependencies that support CBS 2. By identifying critical people, processes, technological systems, and external relationships, the chapter helps operational teams, risk managers, and resilience officers anticipate potential vulnerabilities and design effective contingency measures. The reader is expected to learn how each sub-process is interconnected, which resources are vital, and how these dependencies can impact the continuity and stability of clearing and settlement operations.

Table P2: Map Dependency for CBS-2

Sub-CBS Code	Sub-CBS	Dependency Type	Dependency Detail	Connectivity
2.1	Trade Capture & Validation	People	Front office traders, operations staff	Inputs trade data into the CBS; validates trades before processing
		Process	Trade capture workflow, validation checks	Ensures data accuracy before clearing and settlement
		Technology	Trading platforms (e.g., Bloomberg, internal systems), validation tools	Integrates with downstream clearing systems and reporting modules
		Third Party	Market exchanges, counterparties	Receives trade confirmations; sends validation results
2.2	Clearing Instructions & Netting	People	Clearing officers	Review and authorize netting instructions
		Process	Netting workflow, instruction reconciliation	Connects trade data from 2.1 to settlement modules
		Technology	Clearing and netting software, risk engines	Communicates net positions to margin management and settlement systems
		Third Party	Central counterparties (CCPs), clearing houses	Receives netting instructions; provides clearing confirmations
2.3	Margin & Collateral Management	People	Risk management, collateral officers	Approve margin calls, manage collateral allocation
		Process	Margin calculation, collateral optimization	Links netting outputs from 2.2 with funds/securities allocation
		Technology	Collateral management systems, risk engines	Interfaces with settlement and reporting modules
		Third Party	Custodians, counterparties	Receive and deliver collateral; confirm margin positions
2.4	Settlement Execution	People	Settlement officers	Initiate funds and securities transfers
		Process	Settlement workflow, payment instructions	Connects margin and netting results to actual settlement
		Technology	Settlement platforms, SWIFT messaging	Facilitates automated settlement execution
		Third Party	Custodians, banks, depositories	Executes transfers of cash and securities
2.5	Funds & Securities Reconciliation	People	Operations and reconciliation staff	Review discrepancies and confirm settlement status
		Process	Daily reconciliation procedures	Links settlement results from 2.4 with internal ledgers
		Technology	Reconciliation software, ERP systems	Provides automated matching and exception reporting
		Third Party	Custodians, banks	Confirm balances and resolve discrepancies
2.6	Corporate Actions Processing	People	Corporate actions officers	Monitor corporate announcements; update records
		Process	Event processing workflow	Ensures entitlements are processed post-settlement
		Technology	Corporate action management systems	Interfaces with client accounts and settlement records
		Third Party	Issuers, registrars	Provides corporate action details and confirmations
2.7	Exception & Fail Management	People	Operations and risk teams	Resolve settlement fails, investigate exceptions
		Process	Exception handling protocols	Links failed trades to original trade capture and settlement modules
		Technology	Exception tracking systems	Monitors alerts and manages resolution workflow
		Third Party	CCPs, custodians, counterparties	Coordinate resolution of failed settlements
2.8	Regulatory & Financial Reporting	People	Compliance officers, finance teams	Prepare regulatory filings and financial reports
		Process	Reporting workflow, audit trails	Aggregates data from all CBS 2 sub-processes
		Technology	Reporting and analytics tools	Interfaces with trade capture, settlement, and reconciliation systems
		Third Party	Regulators, auditors	Submit reports and disclosures as required
2.9	Client & Counterparty Communication	People	Relationship managers, client service officers	Communicate trade, settlement, and collateral updates
		Process	Communication protocols, notifications	Receives data from trade capture, margin, and settlement outputs
		Technology	Client portals, messaging tools	Facilitates real-time updates and alerts
		Third Party	Clients, counterparties	Receives confirmations and settlement updates
2.10	Technology, Controls & Monitoring	People	IT and control officers	Monitor system performance and risk alerts
		Process	IT controls, monitoring protocols	Connects all CBS 2 sub-processes for operational oversight
		Technology	Core banking systems, monitoring tools	Ensures stability and continuity of CBS 2 operations
		Third Party	IT service providers, vendors	Provide system support, patching, and upgrades

Mapping dependencies within CBS 2 Clearing & Settlement Services allows Kenanga Investment Bank to identify and understand critical interconnections between its people, processes, technology, and third-party partners. This comprehensive view enhances operational resilience by highlighting potential points of failure, streamlining exception management, and ensuring seamless regulatory compliance.

With these insights, the bank can prioritize risk mitigation strategies, improve response capabilities during disruptions, and maintain high standards of service reliability for clients and counterparties.

Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey
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CBS-2 Clearing & Settlement Services
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Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey

[OR] [KIB] [E3] [CBS] [2] [MD] Map Dependency

Operational Resilience Certified Planner-Specialist-Expert

CBS-2 Clearing & Settlement Services

Introduction

Purpose of the Chapter

Table P2: Map Dependency for CBS-2

More Information About OR-5000 [OR-5] or OR-300 [OR-3]

Comments:

Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey

[OR] [KIB] [E3] [CBS] [2] [MD] Map Dependency

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Operational Resilience Certified Planner-Specialist-Expert

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Introduction

Purpose of the Chapter

Table P2: Map Dependency for CBS-2

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More Information About OR-5000 [OR-5] or OR-300 [OR-3]

Comments:

CBS-2 Clearing & Settlement Services