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Issue 1Q/2015
5 January 2015
Date
Title
26 January 2015
Half-day talk on ASEAN Integration – Big Bang For Capital Markets?
Local & Global News
PATRON
TAN SRI
AZMAN HASHIM
ADVISOR
 SC: Malaysia Records Higher Scores in Regional Corporate Governance Assessment
 US: Regulators Will Address Specific Cyberthreats, What to Expect in New Guidance
 US: Microsoft Lets US Shoppers Pay with Bitcoin
Anti-Money Laundering News




MALAYSIA: Top Cop Held Over Money Laundering
SPAIN: Money-Laundering Charge Dropped Against Spain's Princess
US: Framework Includes Anti-Money-Laundering Provisions
US: Treasury Fines Credit Union for Anti-Money Laundering Lapses
 Albert Tai Lee Chuan
~ Hong Leong Investment Bank
Islamic News
EDITORS
Ethics & Governance News

Rueben Panchadcharam

Soom Phon Endin Win
~ AmInvestment Bank
~ RHB Investment Bank
 SC: Malaysia and UAE Collaborate on Capacity Building for Islamic Capital Market
 SEC: CEO and Close Friend Charged With Insider Trading Ahead of Company Sale
 SEC Charges Montana Man in Pump-and-Dump Scheme Involving Virginia-Based Penny Stock
Company
 INDIA: Give INR15,500 to get INR5.50 crore - Scamsters Posing as Reserve Bank of India Governor
Rajan
 US: TD Bank to Pay Second Breach Penalty
CONTRIBUTORS
 Chen Mun Peng
~ Affin Hwang Investment Bank
 Khaw Lin Lin
~ Alliance Investment Bank
 Geetha Sivapathasundram
~ CIMB Investment Bank
 Benothini Bascaran
~ Kenanga Investment Bank
1 January
New Year’s Day

3 January
Prophet Muhammad’s Birthday
Ismail Awang
~ Maybank Investment Bank
 Dahlia Mohd Razali
~ MIDF Amanah Investment Bank

Devarajoo Sinniah
~ Public Investment Bank
1 February
Federal Territory Day
3 February
Thaipusam
19 February & 20 February
Chinese New Year
Disclaimer & Confidentiality Statement
The information depicted herein has been obtained from sources believed to be reliable but have not
been independently verified and consequently no representation or warranty is made to their accuracy,
correctness or completeness, and they should not be relied upon as such. Malaysian Investment Banking
Association (“MIBA”) disclaims all liability for any direct or consequential loss arising out of or in respect
of the use of this newsletter or its contents.
This newsletter is of a general nature and is intended to update on compliance related issues as part of
MIBA’s ongoing training and education objective and to promote effective compliance culture. It should
not be viewed as a substitute for professional advice on any subject covered herein.
Issue 1Q/2015
5 January 2015
Message from the Chairman
Dear Readers,
Season’s Greetings and a very Happy New Year!
In our effort to promote higher standards of compliance in all
financial institutions, we must ensure that an effective compliance
framework is put in place and embraced by the Board of Directors,
Senior Management, all employees and that appropriate corrective
actions are taken when compliance failures are identified.
I strongly believe that a clear and continuous communication with
all stakeholders, especially with the Board of Directors and Senior
Management, is crucial in ensuring compliance programmes within
the organisation are updated and adhered to accordingly. Again, I
would like to emphasise that compliance is everyone’s
responsibility and all Members should work together to ensure
effective corporate governance which promotes market integrity,
transparency and a system of accountability – vital to the stability of our financial system and Nation.
“Strong compliance functions must be
implemented in the organisation and the
compliance programmes must be
effective as the cost of non-compliance is
now very high.”
Strong compliance functions must be implemented in the organisation and the compliance programmes must
be effective as the cost of non-compliance is now very high. Compliance officers have to continuously upgrade
their skills and knowledge of new rules and regulations to stay ahead of the curve in the evolving market
environment and ensure that compliance functions and programmes are well managed within their
organisations.
I wish to commend and thank the Compliance Officers’ Committee of the Malaysian Investment Banking
Association for their continuous effort and dedication in issuing the ‘Compliance Today’ e-newsletter, bringing
readers updated on local and global news and issues relating to compliance, its practices and trends on a
quarterly basis.
I wish you all a successful and a New Year 2015 filled with abundant happiness and Good Reading!
Yours sincerely,
Tan Sri Azman Hashim
Chairman
Page 1
Issue 1Q/2015
5 January 2015
Local & Global News
SC: Malaysia Records Higher Scores in Regional Corporate Governance Assessment
Malaysia has strengthened its regional standing in corporate governance after recording higher scores in the
biennial Corporate Governance Watch 2014 Report (“CG Watch”).
Malaysia
According to the report by the Asian Corporate Governance Association in collaboration with CLSA Asia-Pacific
Markets, Malaysia achieved an overall score of 58 percent in 2014 compared to 49 percent in 2007,
maintaining its rank of fourth in the region. The report drew attention to the sustained and concerted efforts
by Malaysia in driving governance reforms, resulting in Malaysia becoming the only market out of the Asia
Pacific countries assessed that consistently improved its scores in each of the last four surveys.
Source: http://www.sc.com.my/
US: Regulators Will Address Specific Cyberthreats, What to Expect in New Guidance
US
When the Federal Financial Institutions Examination Council (“FFIEC”) releases new cybersecurity guidance,
it will address specific types of cyber-attacks and threats. New guidance is expected to address inherent risks
associated with mobile banking - an area many critics said should have been included within the FFIEC's
updated authentication guidance, which was released in June 2011. The new guidance also will likely include
recommendations for information sharing, which includes sharing detailed data-breach cost-analyses with law
enforcement, to ensure no cyber-event falls under the radar.
It is still unclear when this new guidance will be issued. However, industry analysts say they expect
regulators to issue the guidance within the next year, as congressional pressure to address emerging cyberattacks continues to grow.
Regulators noted below five domains where more attention must be paid to cybersecurity. Those five
domains include:
• Risk management and oversight, which includes C-level and employee awareness of emerging
cyberthreats;
• Threat intelligence and information sharing;
• Cybersecurity controls, such as network-intrusion detection systems;
• Dependency management of third-party service providers; and
• Management resilience, which includes disaster recovery and business continuity planning in the wake of
a cyber-incident.
Source: http://www.bankinfosecurity.com/
US: Microsoft Lets US Shoppers Pay with Bitcoin
US
Microsoft began letting US shoppers at its online Windows Store pay with digital currency Bitcoin. Bitcoin,
traded in at market value through a partnership with payment processor BitPay, could be used to add money
to Microsoft accounts that provide funds for buying games, music, video or applications for Xbox consoles or
computers powered by the US technology titan's Windows operating systems.
"The use of digital currencies such as Bitcoin, while not yet mainstream, is growing beyond the early
enthusiasts," Microsoft Universal Store corporate vice president Eric Lockard said in a blog post.
"We expect this growth to continue and allowing people to use Bitcoin to purchase our products and services
now allows us to be at the front edge of that trend."
Source: http://economictimes.indiatimes.com/
Page 2
Issue 1Q/2015
5 January 2015
Anti-Money Laundering News
MALAYSIA: Top Cop Held Over Money Laundering
A senior Bukit Aman officer with the rank of assistant commissioner of police has been detained by the
Malaysian Anti-Corruption Commission (“MACC”) for alleged involvement in money laundering. The officer, in
his mid-50s, was formerly a state Criminal Investigation Department Chief.
Malaysia
Sources said graft busters found RM170,000 in a bag he was carrying when he was picked up in an
undisclosed location. Following his arrest, they raided his house and recovered RM300,000 in one of the
rooms.
It was reported that investigators had discovered 30 senior police officers living beyond their means. Many of
these senior officers were found to have at least RM1 million or more in their bank accounts. It was alleged
that they had collected bribes from operators of illegal businesses, such as gaming cybercafes, massage
parlours and vice dens in the federal capital.
Source: http://www.nst.com.my/
SPAIN: Money-Laundering Charge Dropped Against Spain's Princess
US
Spanish judges dismissed money-laundering charges against King Felipe VI's sister Cristina (“Cristina”),
potentially saving the princess from going on trial in a royal scandal. In a written ruling the court on the
island of Mallorca answered the latest appeals in a case that contributed to the abdication this year of
Felipe's father, Juan Carlos.
The judges decided to "partially uphold the appeals dismissing the proceedings with regard to moneylaundering and maintaining the charges of cooperating in tax fraud" against Cristina, 49, they wrote in a
ruling seen by AFP.
Judicial sources said the lesser tax fraud charges may yet be overturned by a separate investigating judge,
who has the final say on whether Cristina goes on trial. It would be the first time a direct relative of a
Spanish monarch ended up in the dock and a big headache for Felipe who took the throne in June promising
an "honest and transparent monarchy".
Source: http://economictimes.indiatimes.com/
Page 3
Issue 1Q/2015
5 January 2015
Anti-Money Laundering News
US: Framework Includes Anti-Money-Laundering Provisions
US
The banking industry is watching closely as the New York State Department of Financial Services proposes a
groundbreaking "BitLicense" regulatory framework for virtual currency businesses that's designed to help
fight fraud. The framework, which has been in development for almost a year, contains consumer protection,
anti-money laundering and cybersecurity rules tailored for virtual currency, such as Bitcoin, state officials say.
"We have sought to strike an appropriate balance that helps protect consumers and root out illegal activity without stifling beneficial innovation," says Benjamin Lawsky, superintendent of financial services. "Setting up
common sense rules of the road is vital to the long-term future of the virtual currency industry, as well as the
safety and soundness of customer assets."
One key provision, designed to crack down on money-laundering risks by ending the anonymous use of the
online currency, would require virtual currency firms to track the identity and physical addresses of the
parties involved in a transaction; the amount or value of the transaction; the date the transaction was
initiated and completed; and a description of the transaction.
The proposed virtual currency rules for businesses were published in the New York State Register on July 23.
After a 45-day public comment period, the rules will be subject to additional review and revision before
they're finalised.
Source: http://www.bankinfosecurity.com/
US: Treasury Fines Credit Union for Anti-Money Laundering Lapses
A south Florida credit union has been fined USD300,000 by the US Treasury Department after admitting that
it moved large sums of customer money to risky jurisdictions without proper controls to prevent money
laundering.
US
North Dade processed transactions for more than 50 so-called money services businesses (“MSBs”) such as
check cashers and money changing businesses, wiring millions of dollars per month to high-risk foreign
jurisdictions, including some in Mexico, Central America and the Middle East.
The credit union admitted that it failed between 2009 and 2014 to meet requirements imposed by the Bank
Secrecy Act and that it had weak internal controls, independent testing, and training, and failed to designate
a qualified compliance officer and respond to law enforcement queries, a penalty assessment issued by
Financial Crime Enforcement Network stated.
Source: http://www.reuters.com/
Page 4
Issue 1Q/2015
5 January 2015
Islamic Finance News
SC: Malaysia and UAE Collaborate on Capacity Building for Islamic Capital Market
On 28 October 2014, the Securities Commission Malaysia (“SC”) and the UAE’s Securities and Commodities
Authority (“SCA”) had exchanged a memorandum of understanding (“MoU”) to forge a strategic partnership
in capacity building between the two leading regulators of Islamic capital markets.
Malaysia
The exchange of the MoU was completed by Datuk Ranjit Ajit Singh, Chairman of SC, together with H.E.
Abdullah Al-Turifi, CEO of SCA, at the 10th World Islamic Economic Forum in Dubai, with Prime Minister of
Malaysia Dato’ Sri Najib Tun Razak witnessing the ceremony.
The MoU sets out the foundation of further co-operation between the SC and SCA, which includes allowing
for collaborative initiatives in human capital development, with key emphasis on the development of capital
market and financial services industry professionals in both Malaysia and the UAE. This aims to enhance the
mobility of talent and professionals between the two leading Islamic finance markets. The MoU will also
enable collaboration in research and regional thought leadership events to jointly promote the capital
markets.
This collaboration will be undertaken by Securities Industry Development Corporation, the SC’s capital market
talent development centre, together with the UAE authority.
Source: http://www.sc.com.my/
MU’AYYAN BI AL-ZAT
Clearly identifiable and determinable in terms of location, quantity and quality.
Source: http://www.bnm.gov.my/
Page 5
Issue 1Q/2015
5 January 2015
Ethics & Governance News
SEC: CEO and Close Friend Charged With Insider Trading Ahead of Company Sale
US
The Securities and Exchange Commission (“SEC”) had on 21 November 2014 charged Willian E. Redmond Jr.
(“Redmond”), a then-CEO of Gentek Inc. (“Gentek”) and a close friend of his, Stefano Signorastri
(“Signorastri”) for insider trading. Redmond had provided Signorastri with confidential details about Gentek’s
non public merger that enabled him to make trading profits.
The SEC alleges that Redmond frequently dined at a Manhattan restaurant managed by Signorastri, with
whom he eventually became good friends and discussed personal matters as well as his work at Gentek, an
engineering and chemical company where he served on the board of directors in addition to being CEO.
Gentek’s nonpublic negotiations to find suitors for a company sale were among the topics that Redmond
shared with Signorastri. Redmond’s frequent disclosures of confidential corporate information to Signorastri
violated his fiduciary duty and other duties of trust and confidence that he owed to Gentek.
Signorastri first purchased Gentek stock while in possession of material nonpublic information obtained from
Redmond as the company began various negotiations, and a year later he purchased additional Gentek stock
as the company began negotiating in earnest with American Securities LLC. Two business days after
Signorastri’s last stock purchase, Gentek announced it would be acquired by American Securities in a tender
offer, and its stock price shot up by nearly 40 percent on the news. Signorastri then tendered all of his
Gentek shares to obtain his illicit profits.
Redmond and Signorastri, agreed to pay more than USD324,000 to settle the SEC’s charges.
Source: http://www.sec.gov/
SEC Charges Montana Man in Pump-and-Dump Scheme Involving Virginia-Based Penny Stock
Company
US
On 4 December 2014, the Securities and Exchange Commission (“SEC”) charged a penny stock promoter in
Montana with orchestrating a fraudulent pump-and-dump scheme involving the stock of a Northern Virginiabased company that claims to be in the airport security business.
The SEC alleges that Matthew Carley (“Carley”), who lives in Bozeman, Mont., engineered a reverse merger
and gained control of free-trading shares of Red Branch Technologies located in Ashburn, Va. Carley then
orchestrated two blast e-mail campaigns promoting Red Branch stock, and he timed the e-mails to coincide
with the dissemination of materially false and misleading company press releases touting technology related
to airport security and homeland security. However as Carley well knew, Red Branch had no true business
operations and no sales revenue. Once the promotional campaigns generated dramatic increases to Red
Branch’s share price and trading volume, Carley immediately sold several million Red Branch shares for
USD789,478 in unlawful profits.
Carley agreed to settle the SEC’s charges and be barred from the penny stock industry. The settlement with
the SEC, subject to court approval, would bar Carley from participating in any future penny stock offering
and permanently enjoin him from future violations of the antifraud provisions. He is liable for disgorgement
and prejudgment interest of USD921,232 that he is anticipated to pay as part of his obligations in the
criminal case.
Source: http://www.sec.gov/
Page 6
Issue 1Q/2015
5 January 2015
Ethics & Governance News
INDIA: Give INR15,500 to get INR5.50 crore - Scamsters Posing as Reserve Bank of India
Governor Rajan
India
Taking bank lottery scam to a new level, scamsters are using the name and picture of the Reserve Bank of
India (“RBI”) chief Raghuram Rajan (“Rajan”) to lure gullible people into making a cash deposit of INR15,500
to get a winning amount of INR5.50 crore.
The “lottery” amount that they promise to credit into the account of those giving an “approval fee” is claimed
to be part of funds given to RBI by the British Government. In the scam email, purportedly sent by Rajan
and ending with his "hearty congratulations", the targetted beneficiary is also informed that his or her name
was decided pursuant to a meeting he had with the United Nations General Secretary Ban Ki-Moon in
September.
Asking for this mail to be kept confidential and away from "general public for security reason", the scamsters
also provide name and details of a money transfer manager, with a purported employee ID card of an RBI
Chief General Manager.
Source: http://economictimes.indiatimes.com/
US: TD Bank to Pay Second Breach Penalty
TD Bank has agreed to a second state settlement tied to a data breach involving the loss of two backup
tapes that may have exposed personally identifiable information for 260,000 of the bank's eight million US
customers.
US
The USD625,000 settlement with the Massachusetts attorney general is separate from an earlier,
USD850,000, nine-state settlement. Massachusetts pursued its own investigation because the breach
occurred in that state and affected a large number of its residents, a spokesperson for the attorney general
tells Information Security Media Group.
Source: http://www.bankinfosecurity.com/
Page 7
Issue 1Q/2015
5 January 2015
KNOWLEDGE CORNER
Deloitte’s Paper on When “Should Becomes “Shall” – Rethinking Compliance
Management for Banks
Deloitte’s paper on When “Should” Becomes “Shall” – Rethinking Compliance Management for Banks explores
many of the important tools and considerations being used by industry leaders as they respond to more
stringent and forceful regulatory scrutiny.
Critical components of a robust regulatory-compliance risk-management program: Governance
 Set and maintain a “culture of compliance”, including board and senior management oversight
 Establish clear roles and responsibilities (i.e. delineation among and between first, second and third
lines of defense)
 Determine defined governance and management compliance risk committees
 Establish and maintain library of applicable regulatory requirements and / or guidance (i.e. legal
inventory), governance and management compliance
 Risk assessment program(s)
 Map defined laws and regulations to applicable line of business and shared service functions
 Establish common risk language, definitions and tolerance levels
 Develop methodology to prioritise and identify high-risk compliance areas of focus
 Align the risk assessment program with the other components of the compliance program
 Policies, procedures and related controls
 Develop and maintain formalised regulatory compliance risk policies, procedures and related controls
documentation
 Establish and socialise business operating principles
 Anchor policies, procedures and related controls documentation to regulatory guidance, as appropriate
 Compliance monitoring and testing
 Establish scope and frequency for monitoring and testing based on compliance risk assessment results
 Develop compliance testing and monitoring schedule
 Perform periodic testing and monitoring of compliance controls
 Measure and monitoring corrective action of remediation plans (i.e. mandatory action plans and
regulatory findings)
 Reporting and communication
 Identify reporting requirements; develop dashboards and critical key risk indicators
 Provide ongoing and periodic reporting to senior management and the board, regulators and internal
audit
 Establish compliance communication plan and frequency for critical messaging
 Establish formal communication protocols to escalate identified regulatory compliance issues to
responsible parties
Page 8
Issue 1Q/2015
5 January 2015
KNOWLEDGE CORNER
Deloitte’s Paper on When “Should Becomes “Shall” – Rethinking Compliance
Management for Banks (cont’d)
Critical components of a robust regulatory-compliance risk-management program (cont’d): Compliance training
 Conduct risk-focused compliance training needs assessment
 Develop training plans, both at the enterprise and line of business / shared service levels
 Develop role-based training programs, as appropriate
 Conduct training sessions
 Update and maintain training content, which is anchored in regulatory requirement and guidance
 Compliance technology
 Develop detailed business requirements
 Identify and document critical technology platforms leveraged by compliance
 Evaluate technology platforms and leverage existing infrastructure where possible
 Seek and utilise automation where possible for risk assessment, testing, reporting and issue
management
 Regulatory interaction and coordination
 Maintain an enterprise-wide view of recent and planned examination activities and findings
 Determine communication protocols with the regulators
 Establish a standard process to receive and respond to regulatory inquiries
 Identify critical stakeholders within the first and second line of defense to engage during regulatory
discussions
What a strategic plan should look like:While there’s no official view on what a strategic plan should look like, the contents listed below offer a good
guide as to what key components should be considered. As you can see, the intent of the plan is to go well
beyond a gap analysis. It should be a practical, strategic guide to compliance risk management: Executive summary;
 Mission statement;
 Vision statement;
 Global regulatory environment;
 Current-state observations; and
 Future-state vision.
Source: http://www2.deloitte.com/
Page 9
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
30.09.14
BNM/RH/CP 029-6
Concept Paper – Liquidity
Coverage Ratio
1. This Concept Paper outlines the Bank’s approach to
implementing the Liquidity Coverage Ratio (“LCR”), as part
of the implementation of the Basel III reform measures.
2. For details, please refer to the Concept Paper.
CP ends:
30.11.14
30.09.14
G 73 of 2014
Affin
Hwang
Investment
Bank Berhad Registration as
Heads
The following have been registered with Bursa Malaysia
Securities Berhad as:
 Mr Low Yek Moo (Head of Operations);
 Mr Leong Weng Fook (Head of Operations);
 Encik Abdul Hadzi Bin Marzuki (Head of Dealing);
 Ms Tan Lee Poh (Head of Dealing); and
 Puan Wan Hashimah Binti Ahmad Merican (Head of
Compliance)
Effective:
20.09.14
BNM
Bursa
of Affin Hwang Investment Bank Berhad.
30.09.14
G 75 of 2014
PM Securities Sdn Bhd
(“PMSEC”) Resignation as
Head
of
Dealing
Cum
Director - Mr Francis Ang
Piang Chong
Mr Francis Ang Piang Chong resign as Head of Dealing cum
Director of PMSEC.
30.09.14
Bursa/PO IT 07/2014
Participating
Organisation
(“PO”) Order Management
System (“OMS”) Connectivity
to Bursa Main and DRC Site
1. Rule 5.05 of POs’ Directive and Guidance states that POs
must
have
adequate
security
and
emergency
arrangements to provide continuous business operations
with minimal disruptions.
2. To ensure this requirement is met, POs are required to
update Bursa Malaysia on its OMS connectivity setup
status by 3 October 2014.
3. For details, please refer to the Circular.
02.10.14
Trading
Participant
Circular: 17/2014
Amendments to the Rules of
Bursa Malaysia Derivatives
Berhad (“Rules of Bursa
Derivatives”) for the Revision
of the Contract Specifications
of
5-Year
Malaysian
Government
Securities
(“MGS”) Futures Contract
1. This Circular serves to inform that Bursa Derivatives has
revised the contract specifications of the 5-Year MGS
Futures (“FMG5”) Contract.
2. The revisions include changes made to the methodology
used to compute the final settlement value and changing
the criteria for the selection of eligible MGS used in the
computation.
3. In line with the above, Bursa Derivatives has amended the
Rules of Bursa Derivatives and the Trading Manual.
4. For details, please refer to the Circular.
Effective:
01.12.14
08.10.14
BNM/RH/STD 029-6
Shareholder Suitability
1. This Policy Document specifies the suitability requirements
to ensure that shareholders of FIs that are able to exercise
influence directly or indirectly are persons of integrity and
good reputation so as to minimise the risk of undue or
inappropriate influence that could threaten the safety and
soundness of the FI.
2. For details, please refer to the Policy Document.
Effective:
08.10.14
09.10.14
Shariah
Parameters
on
Islamic Exchange- Traded
Fund Based on Gold and
Silver
1. This Shariah Parameters is issued as guidance and
reference from the Shariah perspective to facilitate the
industry on matters relating to the Islamic exchangetraded fund (“ETF”) based on gold and silver.
2. Notwithstanding the details as set out in these Shariah
Parameters, the endorsement of the Shariah Advisory
Council of the SC must be obtained prior to the issuance of
any Islamic ETF based on gold and silver.
3. For details, please refer to the Shariah Parameters.
Effective:
10.09.14
Bursa
Bursa
Bursa
BNM
SC
Effective:
30.09.14
-
Page 10
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
09.10.14
G 76 of 2014
Hong Leong Investment Bank
Berhad Registration as Head
of Compliance – Mr Tai Lee
Chuan
Mr Tai Lee Chuan has been registered with Bursa Securities as
the Head of Compliance of Hong Leong Investment Bank
Berhad.
Effective:
29.09.14
09.10.14
G 77 of 2014
CIMB
Investment
Bank
Berhad
Registration
as
Director- Dato’ Sri Mohamed
Nazir Bin Abdul Razak
Dato’ Sri Mohamed Nazir Bin Abdul Razak has been registered
with Bursa Securities as Director of CIMB Investment Bank
Berhad.
Effective:
25.09.14
09.10.14
Trading
Participant
Circular: 18/2014
Amendments to the Directive
on the List of Specified
Exchanges
1. This Circular serves to inform on the amendment made to
Directive No. 711-001 (Directive on the List of Specified
Exchanges) issued vide Trading Participant Circular No.
8/2014 (“the Directive”) to include Thailand Futures
Exchange (“TFEX”) in the list of Specified Exchanges.
2. The amended Directive is set out in Annexure 1 of the
Circular.
3. For details, please refer to the Circular attached.
-
13.10.14
Approval
of
Reuters
Transaction Services Malaysia
Sdn Bhd to Carry on
Electronic Money- Broking
Business in Malaysia
1. Approval is granted by BNM to Reuters Transaction
Services Malaysia Sdn Bhd (“RTS Malaysia”) to carry on
money- broking business by providing an electronic
money- broking platform to licensed banks, licensed
investment banks and licensed Islamic banks in the
Malaysian wholesale foreign exchange market.
2. For reference, please refer to the Notification letter.
-
13.10.14
G 79 of 2014
Reporting of Amendments of
Direct Business Transactions
(“DBT”)
1. This Circular to inform that all DBTs reported to the
Exchange under the Rules of Bursa Malaysia Securities
Rule 10.06(1) are firm and cannot be cancelled.
2. With immediate effect, the respective POs of the amended
trade are to submit Appendix 1 of the Circular using PO’s
letterhead and the duly signed form must reach the
Exchange before the commencement of trading on the
next market day.
3. For reference, please refer to the Circular.
-
13.10.14
G 78 of 2014
Public
Investment
Bank
Berhad Registration as Head
of
Compliance
–
Mr
Devarajoo A/L Sinniah
Mr Devarajoo A/L Sinniah has been registered with Bursa
Malaysia Securities Berhad as the Head of Compliance of
Public Investment Bank Berhad.
Effective:
09.10.14
14.10.14
BNM/RH/GL 028-12
Amendments: Guidelines for
Assessment of Compliance to
Rules,
Procedures
and
Manuals for Payments and
Securities Services
1. The Guidelines is to inform participants on the latest
amendments made to the Guidelines for Assessment of
Compliance to Rules, Procedures and Manuals for
Payments and Securities Services.
2. For details, please refer to the Guidelines.
Effective:
15.10.14
Bursa
Bursa
Bursa
BNM
Bursa
Bursa
BNM
Page 11
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
15.10.14
Coming Into Force of the
Amendments to the AntiMoney Laundering and AntiTerrorism Financing Act 2001
(“AMLATFA”)
1. This Circular is to inform the reporting institutions (“RIs”)
of the coming into force of the AMLATFA Amendments.
2. The amendments are aimed at:
 providing further clarity on reporting obligations;
 strengthening measures on declaration for crossborder transportation of cash and BNI;
 strengthening ML/TF investigation and prosecution
powers; and
 providing effective and dissuasive sanctions and
penalties for contraventions of the AMLATFA
provisions.
3. For details, please refer to the Circular.
4. Effective Dates:
 AMLATFA Amendments: 1 September 2014
 Part IVA of the AMLATFA: 1 October 2014
Effective:
Varies
15.10.14
Anti-Money Laundering and
Anti-Terrorism
Financing
(Security Council Resolution)
(Al-Qaida
and
Taliban)
(Amendment) Order 2014
1. This Circular is to inform on the amendments of the AntiMoney Laundering and Anti-Terrorism Financing (Security
Council Resolutions)(Al-Qaida and Taliban) (Amendment)
Order 2014 (“the Order”).
2. For details, please refer to the Circular.
Effective:
10.09.14
16.10.14
Final Guidelines on Leniency
Regime
and
Financial
Penalties
1. MyCC has final ised and published its Guidelines on
Leniency Regime and Financial Penalties after a
nationwide public consultation earlier this year.
2. Guidelines on Leniency Regime allows:
(i) MyCC to grant a reduction of up to a maximum 100
percent (100%) of any penalties that could otherwise
be imposed on infringing enterprises;
(ii) help enterprises involved in cartel activities to come
forward to MyCC with evidence of such activities; and
(iii) enables either immunity from or a reduction in
financial penalties in exchange for cooperation and full
disclosure of the cartel.
3. Guidelines on Financial Penalties grant the MyCC:
(i) broad powers to carry out the performance of its
functions under the Act; and
(ii) specific power to impose a financial penalty for any
infringement of the Act.
4. For reference, please refer to the Guidelines.
Effective:
Immediate
23.10.14
BNM/RH/CP 029-5
Capital Adequacy Framework
for
Financial
Holding
Companies
(Banking
Groups)- Discussion Paper
1. This Discussion Paper outlines the proposals to extend the
capital adequacy requirements currently applicable to a
licensed banking institution, to a financial group headed by
a financial holding company which is engaged
predominantly in banking activities.
2. This proposed framework aims to:
(i)
ensure that the group as a whole is adequately
capitalised to support its group-wide risks;
(ii) address the multiple gearing of capital and excessive
leverage within the financial group which may
undermine the financial strength of licensed
institutions within the group; and;
(iii) achieve greater consistency in disclosed capital
ratios between financial groups headed by a bank
and by a financial holding company.
3. For details, please refer to the Discussion Paper.
Discussion
Paper ends:
23.12.14
BNM
BNM
MyCC
BNM
Page 12
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
23.10.14
ADA/DOD/021/2014
Counter Notification
Bursa
Counter
Listing Board
Prescribed Period
Carimin Petroleum
Berhad (5257)
Main Market
24.10.2014 to
24.11.2014
-
24.10.14
G 80 of 2014
Integrated
Rubber
Corporation Berhad (“IRCB”
(2127)) Share Consolidation
1. This Circular is to inform all POs on the Share
Consolidation exercise by Integrated Rubber Corporation
Berhad (“IRCB”).
2. For details, please refer to the Circular.
Prescribed
period:
29.10.14 –
31.10.14
24.10.14
G 81 of 2014
Integrated
Rubber
Corporation
BerhadWarrants
(“IRCBWA”
(2127WA))
Adjustment to the Exercise
Price and Number of the
Warrants Pursuant to Share
Consolidation
1. This Circular serves to inform all Participating
Organisations (“POs”) on adjustment on Integrated
Rubber Corporation Berhad- Warrants (“IRCB-WA”).
2. For details, please refer to the Circular.
Prescribed
period:
29.10.14 –
31.10.14
24.10.14
R/R 7 of 2014
Introduction of Last Price
Limits and New Order
Validity, and Changes in
Procedures
Relating
to
Amendments
and
Cancellation
of
Direct
Business Transactions and
Requests for Upliftment of
Dynamic Price Limits
1. Amendments
to
the
Rules of Bursa Malaysia
Securities Berhad (“Rules
of Bursa Securities”) (In
Relation to Last Price
Limits)
2. Amendments
to
the
Participating
Organisations’
Trading
Manual
1. This Circular is issued to introduce the following new
features in the automated trading system:
(i)
Last Price Limits; and
(ii) New order validity, namely Bursa Good-Till-Date and
Fill-Or-Kill
2. Pursuant to the introduction of Last Price Limits, the
exchange has amended the Rules of Bursa Securities. The
salient amendments are explained in Paragraph 2 of the
Circular.
3. The POs Trading Manual (“Trading Manual”) is amended
to reflect the changes made in relation to new order
validity. The salient amendments to the Trading Manual
are explained in Paragraph 3 of the Circular.
4. The amendments to the Rules of Bursa Securities and
Trading Manual are attached in both Annexure 1 and
Annexure 2 of the Circular.
5. For details, please refer to the Circular attached.
Effective:
17.11.14
27.10.14
Clearing Circular:
21/2014
Haircut Rates for Approved
Foreign Currencies (“FC”) &
Letters of Credit (“LCS”) as
Collateral
1. The haircut rates for Approved Foreign Currencies and
Letters of Credits as Collateral for RM and USD margin
obligations will be as prescribed in this Circular, effective
28 October 2014.
2. For details, please refer to the Circular.
Effective:
28.10.14
28.10.14
Part VIA of the Anti-Money
Laundering,
Anti-Terrorism
Financing and Proceeds of
Unlawful Activities Act 2001
1. This Notification serves to inform that the Reporting
Institution is required to determine if it is in possession or
control of the property owned or controlled by or on behalf
of the listed entity within thirty (30) days.
2. For details, please refer to the Notification.
Bursa
Bursa
Bursa
Bursa
SC
Bursa Securities has prescribed the following counter which is
proposed to be listed on the Official List (“Prescribed
Securities”), to be deposited with Bursa Depository.
-
Page 13
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
28.10.14
Clearing Circular:
22/2014
FKLI & FGLD – New
Incentive Scheme for Local
Participants
1. This Circular serves to advise on:
(i) revision of the FKLI rebate structure; and
(ii) FGLD fee holiday for Local Participants.
2. For details, please refer to the Circular attached.
3. Effective date of the Circular: 3 November 2014 until 30
April 2015 (Subject to Local Participants meeting the
minimum monthly volume requirement of 1,000 BMD
derivatives contracts.)
Effective:
Please refer
to content.
31.10.14
BNM/RH/CP 032-2
Concept Paper on Financial
Reporting
1. This CP sets out the Bank’s proposal to extend to financial
holding companies the existing Policy Document on
Financial Reporting currently applicable to licensed
persons.
2. This policy document sets out:
(i)
the specific requirements on the application of the
MFRS;
(ii) information to be disclosed in the financial
statements;
(iii) application requirements for approval of a dividend
payment; and
(iv) requirements on submission and publication of the
financial statements.
3. For details, please refer to the CP attached.
CP ends:
14.11.14
03.11.14
Recent Statements by the
Financial Action Task Force
on Money Laundering
1. This Circular is issued to inform the reporting institutions
(“RIs”) of the recent Public Statement issued by the
Financial Action Task Force (“FATF”) on 24 October 2014
on jurisdiction having strategic deficiencies in their antimoney laundering and combating the financing of
terrorism (“AML/CFT”) regime.
2. RIs are required to conduct enhanced customer due
diligence:
(i)
for business relationships and transactions with any
person from countries identified by the FATF as
having on-going or substantial ML/TF risks, and
apply countermeasures proportionate to the risk.
(ii) when ML/TF risks are assessed as higher risk, for
business relationships and transactions with any
person from countries identified by the FATF as
having strategic AML/CFT deficiencies and have not
made sufficient progress in addressing those
deficiencies.
3. For details, please refer to Circular and FATF Public
Statement.
Effective:
03.11.14
05.11.14
BNM/RH/CIR 028-5
Resolusi
Syariah
dalam
Kewangan
Islam
Majlis
Penasihat
Syariah
BNM
(2010- 2012)
1. This Circular is to inform on the resolution of Shariah
Advisory Council of BNM pertaining to issues on Islamic
Finance.
2. For details, please refer to the Circular.
-
06.11.14
Funds
Transfer
Pricing
(“FTP”) Practices of Banking
Institutions
1. This Notification provides an industry guide towards
strengthening FTP practices in line with the Basel
Committee on Banking Supervision (“BCBS”) Principles for
Sound Liquidity Risk Management and Supervision.
2. It also requires banking institutions to take appropriate
measures and steps in addressing the identified gaps and
strengthening the essential foundations for a sound and
robust liquidity risk management.
3. For details, please refer to the Notification.
-
Bursa
BNM
BNM
BNM
BNM
Page 14
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
10.11.14
Customer Satisfaction Survey
Authorisation & Licensing
Department
1. The purpose of this survey is to obtain feedback on the
quality of services provided by the Authorization &
Licensing Department, Securities Commission with respect
to issuance of license to market participants.
2. For details, please refer to the Survey.
10.11.14
Bursa/PO IT 8 of 2014
BTS2
New
Features
Enhancements
Pre-Live
Testing
1. This Circular is to inform that the following BTS2 New
Features Enhancements will be implemented on 17
November 2014.
(i)
Good-Till-Date Orders
(ii) Fill-or-Kill Orders
(iii) Last Price Limit
2. Pre-Live test will be held on Saturday 15 November 2014.
3. For details, please refer to the Circular.
-
11.11.14
Strategic
Trade
(United
Nations
Security
Council
Resolutions)
Regulations
2010
1. These Regulations provide that no citizen or body
corporate incorporated in Malaysia shall knowingly deal,
directly or indirectly in any property owned or controlled
by a person designated under the Order.
2. For details, please refer to the Regulations.
-
11.11.14
Anti-Money Laundering and
Anti-Terrorism
Financing
(Security
Council
Resolutions) (Al-Qaida and
Taliban) Order 2011
1. This Notification reminds reporting institutions that the
1267 and 1988 United Nations Security Council (“UNSC”)
Sanction Lists are regularly updated by the UNSC.
2. Please refer to the Notification for details.
-
12.11.14
Clearing
Circular:
23/2014
2015 Important Dates for
FCPO, FPKO & FPOL
Please refer to the attached Circular for the schedule of
important dates in reference to the FCPO, FPKO & FPOL
tender processing.
-
13.11.14
Anti-Money Laundering, AntiTerrorism
Financing
and
Proceeds
of
Unlawful
Activities
(Declaration
of
Specified
Entities
and
Reporting
Requirements)
(Amendment) Order 2014
1. This Notification is to inform that the Minister of Home
Affairs has made an order cited as the Anti-Money
Laundering, Anti-Terrorism Financing and Proceeds of
Unlawful Activities (Declaration of Specified Entities and
Reporting Requirements) (Amendment) Order 2014 P.U(A)
301 (the Amendment Order).
2. For details, please refer to the Notification.
Effective:
12.11.14
17.11.14
BNM/RH/GD 029-1
Prohibited Business Conduct
1. This Policy Document serves to provide guidance on
descriptions of prohibited business conduct as set out in
Schedule 7 of the Financial Services Act 2013 (“FSA”) and
Islamic Financial Services Act 2013 (“IFSA”) and the
factors that the Bank will consider in determining whether
a financial service provider has engaged in a prohibited
business conduct.
2. The Policy Document provides guidance and examples
(non-exhaustive) of conduct that may be considered
prohibited, per Schedule 7 of the FSA.
3. For full details, please refer to the Policy document
attached.
CP ends:
17.11.14
17.11.14
G 82 of 2014
FA Securities Sdn Bhd
Registration as Head of
Compliance - Encik Nazri Bin
Ab Manan
Encik Nazri bin Ab Manan has been registered with Bursa
Malaysia Securities Berhad as the Head of Compliance of FA
Securities Sdn Bhd with effect from 17 November 2014.
Effective:
17.11.14
17.11.14
G 83 of 2014
Kenanga Investment Bank
Berhad Resignation as Head
of Operations- Mr Donald
Dings Marandha
Mr Donald Dings Marandha will resign as Head of Operations
of KIBB.
Effective:
04.12.14
SC
Bursa
SC
SC
Bursa
SC
BNM
Bursa
Bursa
Survey
ends:
14.11.14
Page 15
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
17.11.14
G 84 of 2014
FA Securities Sdn Bhd
Resignation as Head of
Compliance- Encik Mohamad
Faizal bin Shamsul Anuar
Encik Mohamad Faizal bin Shamsul Anuar will resign as Head
of Compliance of FA Securities Sdn Bhd.
Effective:
21.11.14
19.11.14
BNM/RH/CP 032-4
Concept Paper – KLIBOR rate
Setting
1. This Concept Paper aims to ensure that the KLIBOR rate
setting process is undertaken in a reliable and accurate
manner for purposes of ensuring the integrity and
credibility of the benchmark rates being quoted by the
KLIBOR submitters.
2. This Concept Paper also outlines the mechanism for
relaying complaints or whistle blowing to the Bank, as well
as information on the establishment of a KLIBOR
Committee.
3. For details, please refer to the Concept Paper.
CP ends:
03.12.14
20.11.14
Circular pursuant to the AntiMoney Laundering, AntiTerrorism
Financing
and
Proceeds
of
Unlawful
Activities
(Declaration
of
Specified
Entities
and
Reporting
Requirements)
(Amendment) Order 2014 –
Malaysia’s Domestic list
1. This Circular requires all institutions to:
(i) Freeze without delay all property owned, undertaking
owned or controlled directly or indirectly by the
specified entity; and/or
(ii) Reject or block any transaction by the specified entity.
2. For details, please refer to the Circular.
Effective:
12.11.14
20.11.14
Guidelines
on
Market
Conduct
and
Business
Practices for Stockbroking
Companies and Licensed
Representatives
1. Pursuant to the issuance of SC’s revised “Guidelines on
Prevention of Money Laundering and Terrorism Financing”
(“AML/CFT Guidelines”) on 15 January 2014, consequential
amendments are effected by the SC to the “Guidelines on
Market Conduct and Business Practices for Stockbroking
Companies and Licensed Representatives” ("Market
Conduct Guidelines") issued on 8 April 2008.
2. These consequential amendments are to ensure that the
“Market Conduct Guidelines” are in conformity with the
requirements of the revised AML/CFT Guidelines.
3. Please refer to the revised Market Conduct Guidelines and
the summary of the Amendments for details.
Effective:
20.11.14
20.11.14
G 85 of 2014
Hong Leong Investment Bank
Berhad Registration of Head
of Operations- Mdm Toh Sok
Moy
Mdm Toh Sok Moy has been registered with Bursa Malaysia
Securities Berhad as the Head of Operations of Hong Leong
Investment Bank Berhad.
Effective:
20.11.14
20.11.14
Consultation Paper No.
4/2014
Proposed Review of the ACE
Market Listing Requirements
and Proposed Amendments
to the Main and ACE Market
Listing Requirements Arising
from the Financial Services
Act 2013
1. This Consultation Paper seeks public feedback on various
enhancements to the ACE Market Listing Requirements
(“ACE LR”). The proposed review of the ACE LR is aimed
at enhancing the overall competitiveness of the ACE
Market and seeks to achieve the following objectives:
(i) Promote a more transparent framework, with greater
clarity of the admission criteria;
(ii) Ensure
the
continued
attractiveness
and
competitiveness of ACE Market as a listing and
investment platform.
2. For details, please refer to the Consultation Paper.
Effective:
22.12.14
21.11.14
Strategic Trade (Restricted
End Users and Prohibited End
Users) (Amendment) Order
2014
1. The Regulation is amended in Part 2 of the Second
Schedule in relation to the Democratic People’s Republic of
Korea (“DPRK”).
2. For details, please refer to the Regulations.
Bursa
BNM
BNM
SC
Bursa
Bursa
SC
-
Page 16
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
24.11.14
ADA/DOD/022/2014
Counter Notification
Bursa
Counter
Listing Board
Prescribed Period
E.A. Technique (M)
Berhad (5259)
Main Market
25.11.2014 to
26.12.2014
-
26.11.14
R/R 8 of 2014
Amendments
to
the
Directives on Applications to
the Exchange and Fees
Pursuant to Chapter 3 of the
Rules
1. This Circular serves to inform all POs that Bursa Securities
is simplifying the new registration process involved in
registering a person as a Registered Person under the
Rules of Bursa Malaysia Securities Berhad (“Rules of Bursa
Securities”).
2. Pursuant to the new registration process, amendments
have been made to Directive 3-001 (Directives on
Applications to the Exchange and Fees pursuant to
Chapter 3 of the Rules) in the Participating Organisations’
Directives and Guidance (“Directive”).
3. The salient amendments to the Directive are explained in
Annexure 1 of the Circular.
4. For details, please refer to the Circular.
Effective:
01.12.14
26.11.14
G 7 of 2014
Non Trade Matching Service
(“NTMS”)
1. This Circular is introducing the Non Trade Matching
Service (“NTMS”) system to facilitate the matching of nontrade related transactions for its Clearing Participants
involved in book building during an Initial Public Offering
(“IPO”) or Additional Listing exercise.
2. NTMS was designed to facilitate the matching of
instructions for the Clearing Participants for the following
purposes:
(i)
Single Leg
(ii) Multiple Leg
3. For details of the NTMS Operational Procedures and
requirements, please refer to the “ANNEXURE 1” of the
Circular.
Effective:
Immediate
26.11.14
ADA/DOD/023/2014
Counter Notification
Bursa Securities has prescribed the following counter which is
proposed to be listed on the Official List (“Prescribed
Securities”), to be deposited with Bursa Depository.
Bursa
Bursa
Bursa
27.11.14
Bursa
Bursa Securities has prescribed the following counter which is
proposed to be listed on the Official List (“Prescribed
Securities”), to be deposited with Bursa Depository.
Trading
Participant
Circular: 20/2014
Non
Eligible
Tradable
Contracts for Launch of
Revised FMG5
Counter
Listing Board
Prescribed Period
Only World Group
Holdings
Berhad
(5260)
Main Market
27.11.2014 to
29.12.2014
1. Pursuant to the revised specifications of the FMG5
Contract and its launch on Monday, 1 December 2014, the
eligible tradable contracts at the launch of the revised
FMG5 are the March 15, Jun 15 and September 15.
2. The December 14 contract will not be eligible for trading
and will be suspended until its expiry on 17 December
2014.
3. For details, please refer to the Circular.
-
-
Page 17
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
27.11.14
Trading
Participant
Circular: 19/2014
Directives on the Registration
Process for a Registered
Representative
and
Compliance Officer
1. Pursuant to the introduction of the new registration
process for Registered Representatives and Compliance
Officer, Bursa Derivatives has prescribed a new directive
on the Registration Process of a Registered Representative
and Compliance Officer No. 322.1-001 (“Directive”).
2. The salient amendments to the Directive are explained in
Annexure 1 of the Circular.
3. For details, please refer to the Circular.
27.11.14
Clearing
Circular:
24/2014
Six Months Fee Waiver for
the
Enhanced
5
Year
Malaysian
Government
Securities (“FMG5”) Future
Contract
1. In conjunction with the launch of the enhanced FMGS on 1
December 2014, Bursa Clearing (D) will be waiving the
trading and clearing fees for the product for a period of 6
months beginning 1 December 2014 until 31 May 2015.
2. Market makers will be granted an additional 6 months fee
waiver until 30 November 2015.
3. For reference, please refer to the Circular.
-
27.11.14
ADA/DOD/024/2014
Counter Notification
Bursa Securities has prescribed the following counter which is
proposed to be listed on the Official List (“Prescribed
Securities”), to be deposited with Bursa Depository.
-
Bursa
Bursa
Bursa
Listing Board
Prescribed Period
Kronologi
Asia
Berhad (0176)
ACE Market
28.11.2014 to
29.12.2014
28.11.14
List of Shariah-Compliant
Securities by the Shariah
Advisory Council of the
Securities
Commission
Malaysia (“LIST”)
1. The Shariah Advisory Council (“SAC”) of the SC has
approved an updated list of securities which have been
classified as Shariah-compliant securities.
2. Changes to the List:
(i) Forty (40) securities, newly classified by the SAC as
Shariah-compliant securities, have been added to the
List and thirty (30) securities have been excluded from
the previous list in May 2014.
(ii) The complete list of the 673 Shariah-compliant
securities, as well as a breakdown of these securities
according to sector is provided in the Appendix to the
List.
3. For further details, including timing for the disposal of
Shariah non-compliant securities please refer to the List.
-
03.12.14
Clearing
Circular:
25/2014
Change in Performance Bond
/ Margin Rate
Please refer to the Circular for the rates applicable to all
contracts which remain open at the close of business on
Friday, 5th December 2014 and will continue to apply until
further notice.
-
04.12.14
Amendments to Licensing
Handbook in relation to the
Removal
of
Anniversary
Reporting for Authorisation of
Activity (“ARAA”) Form 6 and
Non-Issuance of Physical
Licence
1. Pursuant to the proportionality of regulation that focuses
on enhancing operational efficiency, the Licensing
Handbook is amended to effect the following changes:
(i) Removal of ARAA Form 6 for licensed representatives;
and
(ii) Non-issuance of physical licence.
2. Please refer to the revised Licensing Handbook and the
Frequently Asked Questions (“FAQs”) for details.
SC
Bursa
SC
Counter
Effective:
01.12.14
Effective:
01.12.14
Page 18
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
05.12.14
BNM/RH/GL 028-14
Guidelines
on
Dispute
Resolution
between
Participants of MyClear’s
Services
1. This Circular outlines the procedures and scope of the
Independent Arbitration Panels in resolving disputes
between the participants of Large Value Payment services
and the JomPAY Scheme provided by MyClear.
2. The latest amendments are as follows:
(i) Introduction of 2 separate Arbitration Panels, with the
Retail Arbitration Panel set up to hear disputes
between participants of JomPay Scheme;
(ii) Change in the arbitration fees payable by both
participants;
(iii) Clarification on the appointment of experts and
payment of their fees; and
(iv) Clarity on submission timelines and checklists.
3. For details, please refer to the Guidelines.
Effective:
05.12.14
05.12.14
BNM/RH/STD 032-4
Repurchase
Agreement
Transactions
1. The Policy Document on repurchase agreement (“repo”)
transactions aims to:
(i) set out the scope of Repo transactions that can be
conducted by licensed banks and licensed investment
banks; and
(ii) promote sound risk management practices by licensed
banks and licensed investment banks particularly
credit risk, market risk, counterparty risk and
settlement risk for the conduct of Repo transactions.
2. The regulatory requirements includes:
(i) General Requirements;
(ii) Eligible Securities;
(iii) Legal Agreement;
(iv) Custody;
(v) Risk Management;
(vi) Foreign Exchange Administration Rules; and
(vii) Reporting and Settlement Requirements.
3. This Policy Document supersedes the Guidance Notes on
Repurchase Agreement Transactions issued on 21 July
2006.
4. For details, please refer to the Policy Document.
Effective:
02.12.14
10.12.14
Trading
Participant
Circular : 21/2014
Announcement of Eligible
MGS
for
March
2015
Contracts
1. This Circular serves to announce the eligible basket of
Malaysian Government Securities (“MGS”) for the March
2015 contracts of 3-Year and 5-Year MGS futures.
2. Eligible MGS for March 2015 contracts of 3-Year and 5Year MGS futures expire on 18 March 2015.
3. Please refer to the Circular for details.
-
12.12.14
BNM/RH/STD 032-3
Annual Fees under the
Financial Services Act 2013
1. This policy document sets out the administrative
requirements to be met for the purpose of payment of
fees to BNM pursuant to section 26(2) of the FSA.
2. For details, please refer to the Policy document attached.
3. Effective date:
(i) Policy Document: 12 December 2014
(ii) Regulation: 15 December 2014
Effective:
Please refer
to content.
BNM
BNM
Bursa
BNM
Page 19
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
18.12.14
R/R 9 of 2014
1. Amendments
to
the
Rules of Bursa Malaysia
Securities Berhad (“Rules
of Bursa Securities”) to
Clarify the Requirements
on
Verification
in
Relation
to
Trading
Account Opening
2. Amendments to Directive
5-001 (Directives on
Conduct of Business) on
the Requirements on
Verification in Relation to
Trading
Account
Opening
3. Amendments to Directive
5.15-001 (Directives on
Opening Client Account)
in Relation to Prescribed
Corporate Clients
4. Amendments to Clarify
the
Provisions
on
Discount to Employees
of
a
Participating
Organisation
1. This Circular is to inform all POs on the new provisions to
facilitate non face-to-face verification in relation to the
opening of a trading account with a PO (“Non Face-to-face
Verification”).
2. Pursuant to the new provision the following Rules of Bursa
Securities and Directives were amended:
(i)
Rules 3.47(1)(i), 3.47(3) and 5.15(1)(b) –
Amendments to clarify the requirements on
verification in relation to Trading Account opening,
as set out in Annexure 1 of the Circular.
(ii) Directive 5-001 (Directives on Conduct of Business)
– Amendments on the requirements on verification
in relation to trading account opening, as set out in
Annexure 2 of the Circular.
(iii) Directive 5.15-001 (Directives on Opening Client
Account) – To prescribed Corporate clients, as set
out in Annexure 3 of the Circular.
(iv) Rule 11.02(5) and Paragraph 4(c)(ii) of Schedule 6 Amendments to Clarify the Provisions on Discount to
Employees of a PO, as set out in Annexure 4 of the
Circular.
3. For details, please refer to the Circular.
Effective:
15.01.15
18.12.14
ADA/DOD/025/2014
Introduction of Non Face-toFace Verification in Relation
to CDS Account Opening and
Simplification of CDS Account
Opening Procedures
1. This Circular serves to inform the implementation of nonface-to-face verification in relation to opening of CDS
account effective from 15 January 2015.
2. Pursuant to the implementation of non face-to-face
verification the following were amended:
(i) Rules of Bursa Depository – Amendments to cater for
non face-to-face verification, as set out in Annexure 1
of the Circular.
(ii) Amendments to the CDS Procedures Manual for ADAs.
For details of the amendments to the CDS Procedure
Manual for ADAs, as set out in Annexure 2 of the
Circular.
3. For further details, please refer to the Circular.
Effective:
15.01.15
Bursa
Bursa
A. Amendments
to
the
Rules of Bursa Malaysia
Depository
Sdn
Bhd
(“Rules
of
Bursa
Depository”) to Cater for
Non
Face-to-Face
Verification
B. Amendments to the CDS
Procedures Manual for
Authorised
Depository
Agents (“ADAs”)
19.12.14
BNM
Implementation Guidance on
AML/CFT
Policies
Frequently Asked Questions
and Answers (“FAQs”)
1. This document serves as guidance to the reporting
institutions (“RIs”) on the implementation of AML/CFT
Policies based on frequently asked questions by the RIs.
2. The FAQs are intended to provide clarification to the
provisions under the AML/CFT Policies and does not
replace the provisions under the AML/CFT Policies.
3. For details, please refer to the FAQs.
-
Page 20
Issue 1Q/2015
5 January 2015
REGULATORY ALERT
Circulars/Guidelines
23.12.14
Clearing
Circular:
26/2014
IF Derivatives Sdn Bhd (“IF
Derivatives”) Resignation as
General Clearing Participant
(“GCP”) of Bursa Malaysia
Derivatives Clearing Berhad
[Bursa Clearing (D)]
Bursa Clearing (D) has accepted the resignation of IF
DERIVATIVES as GCP.
Effective:
21.12.14
31.12.14
G 87 of 2014
Fee Incentive Scheme for
Issuance
of
Structured
Warrants
1. Further to the Participating Organisations’ Circulars No. G
194 of 2013 dated 19 December 2013, Bursa Malaysia will
be extending the full fee waiver on the initial listing fee for
the issuance of structured warrants (“SW”) with an index
underlying.
2. The extension of the full fee waiver of the initial listing fee
will be granted with effect from 1 January 2015 to 31
December 2015 and is exclusive to index warrants.
3. For details, please refer to the Circular.
Effective:
Please refer
to content.
Bursa
Bursa
Page 21
Issue 1Q/2015
5 January 2015
ANTI-MONEY LAUNDERING & COMBATING THE FINANCING OF TERRORISM
What is money laundering?
Criminal activities, such as drug trafficking, smuggling, human trafficking, corruption and others,
amounts of profits for the individuals or groups carrying out the criminal act. However, by using funds
criminals risk drawing the authorities' attention to the underlying criminal activity and exposing
prosecution. In order to benefit freely from the proceeds of their crime, they must therefore conceal
funds.
tend to generate large
from such illicit sources,
themselves to criminal
the illicit origin of these
Briefly described, "money laundering" is the process by which proceeds from a criminal activity are disguised to conceal their
illicit origin. More precisely, according to the Vienna Convention and the Palermo Convention provisions on money laundering, it
may encompass three distinct, alternative actus reas:
(i) the conversion or transfer, knowing that such property is the proceeds of crime;
(ii) the concealment or disguise of the true nature, source, location, disposition, movement or ownership of or rights with
respect to property, knowing that such property is the proceeds of crime; and
(iii) the acquisition, posession or use of property, knowing, at the time of the receipt, that such property is the proceeds of
crime.
The international standard for the fight against money laundering and the financing of terrorism has been established by the
Financial Action Task Force (“FATF”), which is a 33-member organisation with primary responsibility for developing a world-wide
standard for anti-money laundering and combating the financing of terrorism. The FATF was established by the G-7 Summit in
Paris in 1989 and works in close cooperation with other key international organisations, including the IMF, the World Bank, the
United Nations, and FATF-style regional bodies.
What is financing of terrorism?
Terrorist financing involves the solicitation, collection or provision of funds with the intention that they may be used to support
terrorist acts or organisations. Funds may stem from both legal and illicit sources. More precisely, according to the International
Convention for the Suppression of the Financing of Terrorism, a person commits the crime of financing of terrorism "if that
person by any means, directly or indirectly, unlawfully and willfully, provides or collects funds with the intention that they should
be used or in the knowledge that they are to be used, in full or in part, in order to carry out" an offense within the scope of the
Convention.
The primary goal of individuals or entities involved in the financing of terrorism is therefore not necessarily to conceal the
sources of the money but to conceal both the financing and the nature of the financed activity.
How are efforts to combat money laundering and financing of terrorism linked?
Money laundering is the process of concealing the illicit origin of proceeds of crimes. Terrorist financing is the collection or the
provision of funds for terrorist purposes. In the case of money laundering, the funds are always of illicit origin, whereas in the
case of terrorist financing, funds can stem from both legal and illicit sources. The primary goal of individuals or entities involved
in the financing of terrorism is therefore not necessarily to conceal the sources of the money but to conceal both the funding
activity and the nature of the funded activity.
Similar methods are used for both money laundering and the financing of terrorism. In both cases, the actor makes an
illegitimate use of the financial sector. The techniques used to launder money and to finance terrorist activities/terrorism are
very similar and in many instances identical. An effective anti-money laundering/counter financing of terrorism framework must
therefore address both risk issues: it must prevent, detect and punish illegal funds entering the financial system and the funding
of terrorist individuals, organisations and/or activities. Also, AML and CFT strategies converge; they aim at attacking the criminal
or terrorist organisation through its financial activities, and use the financial trail to identify the various components of the
criminal or terrorist network. This implies to put in place mechanisms to read all financial transactions, and to detect suspicious
financial transfers.
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Issue 1Q/2015
5 January 2015
ANTI-MONEY LAUNDERING & COMBATING THE FINANCING OF TERRORISM
How are corruption and money laundering linked?
Both corruption and money laundering are of great concern for the IMF and they are now an integral part of its work because of
the numerous disruptive consequences that each has on national and regional economies. Anti-corruption and anti-money
laundering work are linked in numerous ways, and especially in recommendations that promote, in general, transparency,
integrity and accountability. Recommendation 6 of the FATF 40+9 Recommendations and Paragraph 7 of the Methodology for
Assessing Compliance with the FATF 40+9 Recommendations, are particularly relevant to anti-corruption efforts.
The essential connections are:
 Money laundering (“ML”) schemes make it possible to conceal the unlawful origin of assets. Corruption is a source of ML as
it generates large amounts of proceeds to be laundered. Corruption may also enable the commission of a ML offense and
hinder its detection, since it can obstruct the effective implementation of a country's judicial, law enforcement and
legislative frameworks.
 When countries establish corruption as a predicate offense to a money laundering charge, money laundering arising as a
corrupt activity can be more effectively addressed. When authorities are empowered to investigate and prosecute
corruption-related money laundering they can trace, seize and confiscate property that is the proceeds of corruption and
engage in related international cooperation.
 When corruption is a predicate offense for money laundering, AML preventive measures can also be more effectively
leveraged to combat corruption.
The FATF Secretariat is currently coordinating a project to draft a paper outlining the links between corruption and money
laundering that may facilitate the implementation of international AML/CFT standards.
What are typologies?
In the AML/CFT context, the term “typologies” refers to the various techniques used to launder money or finance terrorism.
Criminals are very creative in developing methods to launder money and finance terrorism. Money laundering and terrorism
financing typologies in any given location are heavily influenced by the economy, financial markets, and anti-money
laundering/counter financing of terrorism regimes. Consequently, methods vary from place to place and over time.
Those involved in the fight against money laundering or the financing of terrorism rely on the most current information on
typologies. FATF members provide one another and theFATF Secretariat annually with observations based on recent cases or
studies of particular subject areas. FATF collects this information and attempts to describe the trends in order to be in a position
to adapt recommendations to specifically address money laundering and terrorist financing risks. FATF also informs the public at
large by publishing annual typology reports on its webpage.
Why is Customer Due Diligence necessary?
Many of the methods applied by criminals to launder money or finance terrorism involve the use of the financial system to
transfer funds. Financial institutions, in particular banks, are most vulnerable to abuse for that purpose. In order to protect
themselves, it is essential that financial institutions have adequate control and procedures in place that enable them to know the
person with whom they are dealing. Adequate due diligence on new and existing customers is a key part of these controls.
The application of strict Customer Due Diligence (“CDD”) by financial institutions and a high degree of transparency is crucial to
fight money laundering and the financing of terrorism effectively. CDD must be applied upon establishment of a business
relationship or in preparation of a specific cash transaction in excess of a certain amount. CDD must also be applied whenever
financial institutions suspect money laundering or terrorist financing activities.
The basic steps of CDD measures are the appropriate identification of a customer and/or beneficial owner, the verification of the
identity of the customer or beneficial owner, as well as the collection of information on the customer's purpose and nature of
the business relationship.
International Standards on CDD have been set by both the Basel Committee on Banking Supervision and the FATF.
Source: http://www.imf.org/
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