The Flow of a Bond Issuance - Part 2 - Primary Level

With the bond or sukuk issue having obtained the necessary approvals from the relevant authorities, the stage is set for the papers to be issued. The key infrastructure at this stage is the FAST and RENTAS systems, both of which are under the purview of BNM.

Fully Automated System for Tendering (“FAST”)  

•FAST was launched by BNM in September 1996, to automate the tendering procedure for MGS and other BNM papers, which are issued through the Principal Dealers network. By July 1997, the FAST system was able to handle private debt securities (“PDS”). Today, FAST still serves as an entry point for primary activities vis-à-vis securities issuance, money-market tenders and repo tenders. 

• FAST is constantly evolving along with the development of technology and the needs of market participants, following international best practices on market transparency. The system’s centralised news and information are accessible by the general public, without requiring them to become members of FAST. This enables market players to improve their processes when handling instruments and also in the issuance processes, regardless of the mode of offer, while enhancing the overall transparency of Malaysia’s financial system.

• The Rules on FAST had been issued pursuant to Section 126 of the Banking and Financial Institutions Act 1989, to provide a set of procedures and practices that govern the issuance and tendering of all instruments captured under this system. There is now a one-stop aggregator that captures all issuance of instruments, regardless of the mode of issue. This facilitates the facility agent or lead arranger’s management of the debt issue throughout its tenure. Under the FAST Rules, each facility can only be maintained by one facility agent or lead arranger. For tendered instruments, FAST provides a standardised tendering process in terms of bid submission, tender processing and announcement of results. For non-tendered instruments, FAST enables the creation of a facility and stock that can be uniquely identified by certain codes of reference.

Real-Time Electronic Transfer of Funds and Securities (“RENTAS”)


•Under the RENTAS System, scripless securities had been created to facilitate the change from physical certificates to a fully scripless setting. The RENTAS Rules, published by BNM, are applicable to the issuance, allotment, reopening, payment, redemption and settlement of scripless instruments traded under the RENTAS system.

• All sukuks issued through RENTAS must comply with the terms and conditions set out in the Information Memorandum, Depository and Paying Agency Agreement (“DPAA”), Trust Deed and other relevant legal documents binding the issues. Each issue will be represented by a Global Certificate, which must be lodged with the Central Depository for safe custody. The Central Depository will keep the Global Certificate until maturity, and must not make any amendment or cancellation to the Global Certificate. The Facility Agent or Lead Arranger must submit the Global Certificate to the Central Depository at least 1 business day before the issue date. However, the Facility Agent or Lead Arranger is allowed to amend the Global Certificate after the issue date, but only under specific circumstances. In this regard, the amended Global Certificate must be submitted to the Central Depository – at the latest - 2 business days after the issue date.