An investor can either hold a security until maturity or sell prior to maturity at the current market price. Investors can also buy bondsalready issued. The corporate bond market in Malaysia is largely over-the-counter (OTC). Buying and selling conventional and Islamic bonds is done by telephone or other electronic means between bond dealers and investors.

Bond dealers are financial institutions licensed by the Securities Commision to trade bonds for their own or client accounts. Investors place orders with dealers at the price and amount they want. Different types of orders can be placed. Order fulfillment depends on whether the order can find a buyer or seller on the OTC market. Banks maintaining their own bond inventory usually provide their market bid or offer price to clients. Quotes are price/100 or yield to maturity of the bond. The OTC market is also facilitated by BNM through FAST.

Nearly all securities are scripless, with securities transfer electronic. In BNM’s Real-time Electronic Transfer of Funds and Securities (RENTAS) system, transfer instructions are done on a trade-by-trade basis, with the transfer of securities simultaneous with the transfer of funds for payment.

Bondholders receive interest through their cash accounts with Authorized Depository Institutions (ADIs). On interest payment dates, the paying agent uses the Real-time Electronic Transfer of Funds and Securities (RENTAS) system to credit the ADI,which then credits the cash account of the securities holder.

There is no ex-date trading under RENTAS. Interest payments are done at T+1 (one day following the transaction due date).

On the redemption date, RENTAS handles debits and credits the securities and cash accounts of the ADI of the security holder. The ADI then credits the cash account of the securities client.