Page 403 - Special Topic Session (STS) - Volume 3

STS552 Norhayati Razi
This integrated compilation has helped to ease the reporting burden of
the reporting entities and to ensure accuracy of the profiles of securities
issuers. Listed below are the coverage of the data sources reported by the
custodian agencies for the quarterly reporting:
i. Data on resident holdings of securities issued by non-residents in
Malaysia; and
ii. Data on non-resident holdings of securities issued by residents in
Malaysia.
The integrated compilation framework classifies the reporting of external
financial assets and liabilities by direct investment, portfolio investment,
financial derivatives, and other investment, which are being reported under
one survey. Guidance notes, which are aligned to BPM6, provide clear
instructions on method of reporting to prevent misreporting between direct
and portfolio investment by the reporting entities. In addition, the information
obtained from direct investment reported by the end-investors are used as a
basis for reconciliation to avoid double counting and separating direct
investment from portfolio investment.

2.3 Reporting of Securities Issued in International Markets
The reporting of portfolio investment which are classified by institutional
sector, facilitates identification of the pattern of investment. Institutional
investors tend to have direct holdings abroad, while the mutual funds, unit
trusts, and households are more likely to invest through the nominees as
reported by the custodians. In general, the reporting entities are required to
report all the individual securities based on the name, country and institutional
sector of the issuer, as well as currency of the securities issued.
Although highly encouraged, the reporting for securities issued in the
international market by ISIN codes is not mandatory in view of the challenges
faced by reporting entities, particularly if the securities are entrusted to
another non-resident custodians or as part of the pool of funds managed by
non-residents custodians. On the other hand, the institutional investors
reporting data on their portfolio investment holdings abroad are able to
report by ISIN codes and other details, particularly if the decision for the
investment are carried out internally. The detailed reporting by ISIN codes
and countries of residence issuers has somewhat facilitate the reconciliation if
the investments through the non-resident custodians are rechannelled back
to home country.
To ensure comprehensive coverage, the compilation guidelines clearly
define the reporting methods for the different types of reporting entities.
Listed below are the coverage of the data sources for the quarterly reporting:

392 | I S I W S C 2 0 1 9