Bursa Malaysia tests blockchain in securities borrowing and lending

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KUALA LUMPUR (May 6): Bursa Malaysia Bhd is exploring the use of blockchain in securities borrowing and lending (SBL) via a proof-of-concept project with several major SBL players here.

“The project aims to ramp up efficiency, speed and capacity in securities lending supply and borrowing demand (the lending pool),” Bursa Malaysia said in a statement today.

Affin Hwang Investment Bank Bhd, CIMB Investment Bank Bhd, Citibank Bhd, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) and Malacca Securities Sdn Bhd are collaborating with the stock exchange operator on the development of the blockchain-enabled lending pool to suit industry-specific needs, cost and efficiency pressures, it added.

It is the first proof-of-concept of its kind to be launched in the Asean region, Bursa Malaysia said.

“Developed in partnership with Bursa Malaysia’s technology partner Forms Syntron Information (HK) Ltd (FORMS), the proof-of-concept will involve a diverse range of SBL market participants,” the stock exchange operator said. FORMS is a wholly-owned subsidiary of Shenzhen Stock Exchange-listed Shenzhen Forms Syntron Information Co Ltd.

Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the growth potential of Malaysia’s SBL market makes it a prime candidate to test blockchain technology, as it can create a considerable impact.

“Across different markets, empirical studies show that short selling helps provide additional liquidity and improves price efficiency,” Muhamad Umar said.