[OR] [KIB] [E3] [CBS] [2] [MPR] Map Processes and Resources

CBS-2 Clearing & Settlement Services

Introduction

[OR] [KIB] [E3] [CBS] [2] [MPR] Map Processes and Resources

The ability to manage and maintain operational resilience in banking operations is critical for ensuring continuity of service, mitigating risks, and meeting regulatory requirements.

For Kenanga Investment Bank, the Critical Business Service (CBS) 2, Clearing & Settlement Services, encompasses the end-to-end processes that ensure trades are captured, cleared, settled, and reconciled accurately, while maintaining regulatory compliance and safeguarding client assets.

Mapping these processes and their associated resources provides a comprehensive view of dependencies, potential points of failure, and the criticality of each operational component.

Purpose of the Chapter

This chapter aims to provide a detailed mapping of the processes and resources that support CBS 2 Clearing & Settlement Services. By outlining the interconnections between processes, people, technology, third-party vendors, and upstream/downstream dependencies, the reader gains a clear understanding of operational risk exposure and resilience requirements.

The objective is to enable operational teams, risk managers, and regulators to anticipate vulnerabilities, prioritize critical resources, and implement controls that ensure service continuity under severe but plausible scenarios.

Table P3: Map Processes and Resources for CBS-2

Sub-CBS Code	Sub-CBS	Processes	People	Technology (Applications & Infrastructure)	Third-party Vendors	Upstream/Downstream Dependencies
2.1	Trade Capture & Validation	Trade entry, confirmation, and validation against orders	Front Office Traders, Middle Office Staff, Trade Capture Officers	KenTrade Capture System, Trade Validation Engine, Secure Network	Central Depository Malaysia (CDM), Market Data Providers	Upstream: Market Execution Systems; Downstream: Clearing Instructions & Netting
2.2	Clearing Instructions & Netting	Netting of trades, clearing instructions to CCPs, trade matching	Middle Office, Clearing Officers	ClearingNet Platform, Netting Engine	Bursa Clearing, CLS Bank	Upstream: Trade Capture & Validation; Downstream: Margin & Collateral Management
2.3	Margin & Collateral Management	Calculation and monitoring of margins, collateral allocation	Risk Management Team, Collateral Analysts	MarginCalc System, Collateral Management Tool	Custodians, CCPs	Upstream: Clearing Instructions & Netting; Downstream: Settlement Execution
2.4	Settlement Execution	Funds and securities settlement, payment instructions	Settlement Officers, Treasury Desk	Settlement Execution Platform, SWIFT Interface, Core Banking Systems	Custodians, Payment Gateways	Upstream: Margin & Collateral Management; Downstream: Funds & Securities Reconciliation
2.5	Funds & Securities Reconciliation	Reconciliation of settlements, exception handling	Reconciliation Officers, Back Office Staff	Reconciliation Platform, ERP Systems, Data Analytics Tools	Custodians, Clearing Houses	Upstream: Settlement Execution; Downstream: Exception & Fail Management
2.6	Corporate Actions Processing	Processing dividends, rights issues, and other corporate actions	Corporate Actions Analysts	Corporate Actions Module, Securities Database	Custodians, Registrars	Upstream: Funds & Securities Reconciliation; Downstream: Client & Counterparty Communication
2.7	Exception & Fail Management	Handling trade fails, breaks, and disputes	Operations Officers, Trade Support	Exception Management System, Workflow Automation Tool	Custodians, CCPs	Upstream: Funds & Securities Reconciliation; Downstream: Regulatory & Financial Reporting
2.8	Regulatory & Financial Reporting	Generation of regulatory reports, compliance filings	Compliance Officers, Finance Team	Regulatory Reporting Platform, Data Warehouse	Bank Negara Malaysia (BNM), Securities Commission	Upstream: Exception & Fail Management; Downstream: Client & Counterparty Communication
2.9	Client & Counterparty Communication	Notifications, confirmations, and status updates	Relationship Managers, Client Service Officers	Secure Messaging System, CRM Platform	Clients, Counterparties, CCPs	Upstream: Settlement Execution, Corporate Actions Processing; Downstream: None
2.10	Technology, Controls & Monitoring	Monitoring system health, access controls, audit logs	IT Operations, Cybersecurity Team	IT Monitoring Tools, SIEM, Backup & DR Systems	Managed Service Providers, Cloud Vendors	Upstream: All CBS 2 Processes; Downstream: Supports entire Clearing & Settlement lifecycle

Mapping the processes and resources for CBS 2 Clearing & Settlement Services highlights the interconnected nature of banking operations, the criticality of specific roles and technologies, and the reliance on both internal and external parties.

This structured approach ensures that Kenanga Investment Bank can identify vulnerabilities, prioritise resource allocation, and implement robust controls that enhance operational resilience.

By maintaining visibility over upstream and downstream dependencies, the bank is better equipped to respond to disruptions, minimize financial and reputational impact, and meet regulatory expectations set out by Bank Negara Malaysia and other governing bodies.

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

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