How to Determine Trading Settlement in Bursa Malaysia?



trading settlement

This is the Part 3 on the series. I hope that you understand the previous 2 parts.

In part 3, I will explain on the process of trading settlement so that it is clear when you should make payment for your buy transaction. I will also explain the risk that you will be facing if you fail to follow the rule.

Part 1 – How to Open Trading and CDS Account for Trading in Bursa Malaysia?
Part 2 – How to Buy and Sell Shares in Bursa Malaysia?
Part 3 – How to Determine Trading Settlement in Bursa Malaysia?
Part 4 – How to Calculate Profit, Loss and Brokerage Fees in Stock Market Trading?

Step 1 – Understand Settlement Date

In Bursa Malaysia, all buy or sell order have to be settled at 12.30pm on day T+3 where T is the day of transaction.

Basically, what it means is that you have to pay your purchase or deliver you sell transaction on the third day following the transaction day. However, weekend and public holiday are not counted.

If you buy shares, and fail to pay at T+3, your broker have the right to sell unpaid shares at T+4 morning at any price. We call this force selling.

If you sell shares, and you do not have the shares in your CDS account at midnight of T+2, Bursa will impose ‘Buy-in’ to your account.

‘Buy-in’ is a penalty where you have to buy back the all shares that you sold from the open market 10 bits or ticks higher than the last closing price.

Step 2 – Trading Settlement

If you buy shares, then you have to pay before T+3, 12.30pm. Normally, broker will set off automatically from funds that are available in your trust account. If the fund is insufficient then you have to deposit additional cash into yout trust account.

Buying settlement are calculated as follow

Total Buy Settlement (RM) = Value of Shares + Brokerage Fees + Clearing Fees + Stamp Duty

Shares that you purchase will be credited to your CDS account at T+3.

If you sell shares, make sure that you own the shares in the particular before that. You are allowed to transfer shares from other CDS account by T+2 to avoid Buy-In.

Selling settlement  are calculated as follow

Total Sell Settlement (RM) = Value of Shares – Brokerage Fees – Clearing Fees – Stamp Duty

Cash from sell proceed will be credited to your trust account at T+3.


Leave a Comment

  • Lokman 12th April, 2010, 6:33 pm

    Thanks a lot for the post!..That’s realy clear up the clouds for newbies in trading…

    By the way, where we get information about the stamp duty & clearance fees?

    Lokman

    Reply
  • ijat 11th April, 2011, 12:26 pm

    buy-in is for short selling right? is it short selling is not allowed in Bursa Malaysia?

    Reply
  • 1mdb.com 11th April, 2011, 2:00 pm

    Yes, some sort like penalty because of short selling.

    Reply
  • max 29th August, 2011, 12:00 am

    This is such a great blog. It is really useful for newbie.
    But I not really understand this: “If you sell shares, and you do not have the shares in your CDS account at midnight of T+2, Bursa will impose ‘Buy-in’ to your account.”

    Does this means our CDS account must always have shares inside? Thanks

    Reply
  • 1mdb.com 4th September, 2011, 9:42 am

    max, the rule is you should always buy first before you sell.

    Reply
  • Alex 16th January, 2013, 12:08 pm

    Hi,
    I would like to ask whether we need to inform our broker once we purchase the share?
    Is the share will be picked up automatically or we need to inform our broker?
    thanks

    Reply
    • 1mdb.com 16th January, 2013, 2:46 pm

      Hi, if you buy online through your broker online trading website, you don’t have to inform them. You will get it if there is a match transaction.

      Reply
  • Ed 20th April, 2013, 2:57 pm

    Hi,

    I deposited RM3000 to my online trading account then I bought a stocks around RM3000 also. Then next day I receive my E-Contract specifying to pay it in T+3 days. Do I still need to pay this? Would be my deposited money be used to pay this right?

    Thanks,

    Reply
    • 1mdb.com 24th June, 2013, 11:02 am

      Normally, it will be automatically deducted from your trust account.

      Reply
  • Mr. D 22nd June, 2013, 11:05 pm

    Hi, Mr. 1 million,

    Thank you for your info, however, I have a question about the force selling. If the broker sell the shares where the customer unable to pay at the price higher than the purchase price? Then who will gain the profit? If the sell price is lower than the purchase price, who will suffer the loss? Wish you can answer my question. Thanks.

    Reply
    • 1mdb.com 24th June, 2013, 11:04 am

      Profit or Loss from the transaction will be borne by investor.

      Broker will always make money from the commission. 🙂

      Reply
  • kwong 17th August, 2013, 6:03 pm

    let say if i have certain amount of share and i sell part of it, do i still need to buy back? thanks

    Reply
  • 007 25th July, 2014, 10:23 pm

    Hi, it stated the shares that I bought will be credited to my cds at T+3. Does it mean I cannot sell my shares right after I bought it, for example T+1 or during the day of transaction?

    Reply
    • BlueChip88 28th September, 2015, 1:56 pm

      Of Course you can. This is considered as CONTRA SELL. The difference in the price no matter gain or loss will be credited or debited frm/to CDS.

      Reply
  • Pro_loser 29th March, 2016, 6:50 pm

    Hi 1MDB,
    If I bought shares for med – long term investing, what happen with T+3 ? Many thank.

    Reply
    • 1mdb.com 30th March, 2016, 8:50 am

      Hi, you have to pay at T+3.

      Reply
  • nick 4th August, 2016, 4:44 pm

    I have a lot of questions as newbie, but from this particular post I have one question.

    Scenario: I buy and sell same stock on the same day (it is allowed) after I gained profit from it. But in the article saying “Shares that you purchase will be credited to your CDS account at T+3. If you sell shares, make sure that you own the shares in the particular before that. You are allowed to transfer shares from other CDS account by T+2 to avoid Buy-In.”

    My question is, in what circumstance that it counts as I own the shares?

    I’m confused. anyone mind to give a lecture?

    Reply