Citigroup has been appointed Securities Clearing Agent by CLSA in Malaysia.
CLSA is the first foreign broker in Malaysia to appoint a third party to clear and settle securities transactions executed directly on Bursa Malaysia Securities, the Malaysian stock exchange.
Under the mandate, Citigroup will provide back office securities clearing services for CLSA's new brokerage business in Malaysia.
CLSA is among the first foreign brokers to receive approval from local authorities including the Securities Commission in Malaysia to become direct trading members of Bursa Malaysia Securities. Further to this approval, and with the endorsement of the Securities Commission, CLSA has appointed Citigroup as their "account operator" to handle certain operational activities relating to trades executed by CLSA on the stock exchange, including securities clearing and settlement.
"We are delighted with CLSA's appointment of Citigroup as their securities clearing agent in Malaysia," said Sanjeev Nanavati, Country Head, Corporate and Investment Banking, Citigroup Malaysia. "Citigroup's securities clearing agent services will improve the accessibility of the market to firms by reducing their infrastructure requirements and maximizing the efficiency of their resources – in terms of both technology and people," he said.
"Outsourcing the clearing and settlement to Citigroup enables us to speed up time-to-market, reduce fixed costs and concentrate on our core business in research broking," said David Ilett, Group Head of Trading Operations at CLSA.
Securities Clearing Agent services, and its broader product offering, Third Party Clearing, are of great interest to securities firms at a time when cost management is an industry-wide priority. In June 2005, Citigroup launched its third party clearing services in Australia, targeted at broker dealers who wish to trade securities listed on the Australian Stock Exchange from offshore locations.