Bursa Malaysia Bhd will be implementing Direct Market Access (DMA), a zero-touch electronic trading solution that enables real time execution of trade orders, in stages the exchange's chief executive officer Datuk Yusli Mohamed Yusoff said.

He said the DMA would be carried out in two phases, whereby under the first, it would see the deployment of Derivatives DMA, which is targeted for completion towards year-end.

The second phase, encompassing equities and derivatives on a single DMA trading platform, will be implemented following the launch of the equities platform of Bursa Trade early next year.

Yusli said DMA effectively reduced the latency of trading order executions from the current system’s five seconds per transaction to a matter of milliseconds.

DMA would be implemented on the back of Bursa Trade – the exchange’s highly scaleable integrated trading system for derivatives and equities that is currently in its second phase of deployment.

The derivatives portion of Bursa Trade was implemented in November 2006, replacing the former derivatives platform (KATS), which had a technical capacity of 10 transactions per second.

Bursa Trade Derivatives has been tested to a capacity of more than 1,000 transactions per second. The equities portion of Bursa Trade is expected to be completed by early 2008.

Yusli said the DMA was essential for the Malaysian capital market to remain competitive in the global investment arena.

“DMA is already well-established in some of the world’s more developed markets like the United States, Europe and Australia.

"Globally, investors' preferences are increasingly aligned to more efficient markets where trades are fully electronic and offer investors more control over their trade,” he said in a presentation at Invest Malaysia 2007 conference on March 22.

“DMA changes the trading landscape of the Malaysian capital market. Investors will enjoy immediate execution of trade orders at a faster speed.

"By automating the trade order process, DMA provides investors greater control over trading execution and strategies,” Yusli added.

“In addition, it also widens the spectrum of trading activities to include higher value added trading activities such as market-making, algorithmic and basket trading to take place,” he said.

Bursa chief operating officer Omar Merican said the DMA would be mainly used by large investors such as fund managers.

“The fund managers can now key in the order instead of going through the dealers and normally when you pay a brokerage, you also pay for the dealer’s time to key in your orders. We can expect brokerage rate to be lower but I am not sure what the numbers would be.”

“This will lower the cost for brokers and some of these cost (savings) could be passed on to customers. Both brokers and customers can benefit from the system,” Omar said.