C2. Business Hours and Personal Conduct Flashcards
why is it important to have fixed opening and closing hours for the market?
provide a cut-off time for the operations department & risk management to do the mark-to-market valuation.
what is the international official opening hour?
open 5.00 a.m. on Monday Sydney time and ends at 5.00 p.m. on Friday New York time.
what is the opening hours for Malaysian domestic financial market?
8.00 a.m. to 6.00 p.m. Monday to Friday
why does the Malaysian domestic financial market has an extension of an extra hour?
to facilitate the fixing of the USD/MYR reference rate
(the fixing is based on weighted average volume of the interbank USD/MYR spot transacted rate by onshore banks between 8.00 a.m. to 3.00 p.m.)
can market participants engage in trading activity outside of these official business hours?
yes, The market participants are advised to take heed of the market liquidity condition & the constraints imposed by the senior trader or head of treasury if any.
It is important for senior management to clearly identify the dealers that are authorised to transact outside office hours and off premise, as well as the types of products and limits imposed.
what happens when unexpected holidays caused
disruption to the normal settlement date?
common accepted market practice to extend the value date to the next business date
for unscheduled holidays, unless a bilateral agreement or any specified arrangement between the parties is established.
For interest bearing instruments transactions, the actual interest period shall be based on the number of days from the deposit date to the new value date & the rate of interest to be used for the calculation of the extra day (or days if the unexpected holiday falls on a Friday) is based on the original contracted rate.
what rules should market participants follow for major market disruptions such as capital controls, illegality or impossibility of performance, act of God, etc?
rules issued by the local regulatory authorities
what are the penalties for disclosing or revealing confidential information?
may include a fine of not exceeding RM10m or imprisonment for a term not exceeding 5 years or a combination of both.
what should management put in place to enforce confidentiality?
written policies and procedures as well as strong
systems and controls to manage confidential information within the different areas of the institution’s dealing environment.
what is insider trading?
where a person possesses material non-public inside information & uses such information for his or her own benefit.
if an employee makes the inducement where they know, or ought to have known, that it is based on inside information or carry out transactions that would, or would tend to, have a material effect on the price or value of financial instruments, does it count as insider trading?
yes
is cancelling or amending an order of a financial instrument or inciting another into doing so on the basis of inside information considered as insider trading?
yes
can Inside information be disclosed? are there any exceptions for the disclosure?
Inside information shall not be disclosed, except where the disclosure is made as part of the normal course of employment duties.
is it a requirement for staff working in an investment bank to only operate a trading account for capital market products with their own investment bank, and for any transaction, a staff is required to seek prior approval before transacting?
yes
what happens to a transaction if the settlement date falls on an unscheduled holiday?
common accepted market practice to extend the value date to the next business date for unscheduled holidays.
