Bursa Malaysia announces blockchain proof-of-concept for securities borrowing and lending

Bursa Malaysia, the stock exchange of Malaysia, has commenced a proof-of-concept (POC) that aims to explore blockchain potential in enhancing the efficiency of the securities borrowing and lending (SBL) market in the country.

The project, first of its kind in the ASEAN region, aims to enhance transparency, speed and capacity in securities lending supply and borrowing demand (Lending Pool). The objective is to develop a blockchain-enabled Lending Pool better suited to the industry’s specific needs, cost and efficiency pressures.

The POC has been developed in collaboration with the exchange’s technology partner Forms Syntron Information (HK) Ltd, a wholly-owned subsidiary of Shenzhen Forms Syntron Information Co., Ltd.

In addition, a number of financial institutions including Affin Hwang Investment Bank Berhad, CIMB Investment Bank Berhad, Citibank Berhad, Kumpulan Wang Persaraan (Diperbadankan) and Malacca Securities Sdn Bhd. are also teaming up with the exchange on the initiative.

“The growth potential of Malaysia’s SBL market makes it a prime candidate where the power of blockchain technology can create a considerable impact. The collaboration also benefits the wider industry through new knowledge, insights and practical experience in harnessing digital innovation to support and drive the growth of the capital market,” Bursa Malaysia CEO Datuk Muhamad Umar Swift said.

Bursa Malaysia said that the POC will pave the way for it to undertake deeper explorations in blockchain technologies to address other operational challenges prevalent to SBL activities in Malaysia and discover more opportunities to drive end-to-end functionalities such as market interest discovery, trade capture and collateral management.