C1. Code of Conduct for Malaysia Wholesale Financial Markets

Question 1

Dealer & Brokers’ minimum ‘fit and proper’ criteria as stipulated in MCC (Malaysia Code of Conduct)

Answer 1

• Not an undischarged bankrupt;
• Not a judgment debtor;
• Not convicted of an offence involving fraud/dishonesty/ violence;
• Not convicted of an offence in respect of banking, securities and insurance laws;
• Not engaged in any deceitful or oppressive business practices;
• Not committing any material breach of this policy document;
• Not been engaged in business practices or conducted himself in such a way where his competence and soundness of judgment is doubtful.
• Irrespective whether the above offences are committed in or outside of Malaysia.

Question 2

‘trainee dealer’ and ‘trainee broker’ are allowed, under close supervision by licensed personnel to

Answer 2

a) provide indicative quotation to other market participants
b) make or receive calls from other market participants
c) key-in concluded deals into the dealing system

Question 3

in summary, ‘trainee dealer’ and ‘trainee broker’ are not allowed to

Answer 3

conclude deals/broke

Question 4

best market practices

Answer 4

a. must not influence reference or fixing rate
b. must not engage in position parking

Question 4

best market practices

Answer 4

a. must not influence reference or fixing rate
b. must not engage in position parking (conclude a deal that will be reversed on a future date to conceal dealing positions or transfer profits and losses)
c. must not participate in offshore ringgit non-deliverable derivatives market, including ringgit non-deliverable forwards (NDFs) or engage in any foreign exchange dealings that could be deemed as facilitating non-deliverable ringgit related dealings in the offshore market.
d. should avoid dealing at non-current rates (if necessary, the management must have proper controls with clear audit trails for monitoring and reporting of such dealings & establish internal thresholds for non-current rates)
e. if dealing for personal account is permitted, safeguards must be in place to manage potential conflict of interest, insider dealing & front-running.
f. must state whether price and rate quoted is firm or indicative + cannot quote smtg that they will not honour
g. must not revise the firm price/rate when the name of the counterparty is disclosed
h. must not offer entertainment/gifts which can be perceived as inappropriate inducements to conduct business, nor solicit them
i. must comply with anti-money laundering and counter financing of terrorism

Question 5

communications relating to transactions must be kept for how long if the transactions involved long dated instruments such as long dated interest rate swap or forward rate agreement.

Answer 5

at least 2 months or longer

Question 6

record of all dealings, including the policies and procedures in relation to the dealings, must be kept for a minimum of how long

Answer 6

7 years

Question 7

All records of non-compliance findings and the corrective actions + audit reports must be properly recorded and retained for up to

Answer 7

7 years

Question 8

what is FX Global Code (Global Code)

Answer 8

a. guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market
b. does not impose legal or regulatory obligations on Market Participants, nor does it substitute for regulation
c. serve as a supplement to any and all local laws, rules, and regulation

Question 9

There is also a requirement for financial institutions to inform BNM and FMAM in writing
within a week of the following decisions:
a) Initiation of an inquiry into a dealer or broker for suspected non-compliance with this policy document.
b) Conclusion of such inquiry, including any action taken against such dealer or broker.