Bursa Malaysia Annual Report 2015

61 / 222

TO OUR SHAREHOLDERS
55 Bursa Malaysia • Annual Report 2015
better financial performance and brand image. International and local
institutional investors have begun to demand for more information on
sustainability performance from their investee companies. In light of these
developments as well as our recognition of the need to ensure that all listed
issuers are able to truly benefit from those developments, Bursa Malaysia
has placed sustainability as an important agenda and undertook various
initiatives in 2015 which includes the development of a new Sustainability
Framework for listed issuers.
As part of our efforts to consistently build market quality, we developed a
new framework for sustainability reporting by amending the LR to require
our listed issuers to issue a Sustainability Statement in their annual reports
to replace the CSR statement. In order to aid companies in the making of the
Sustainability Statement, we also launched a Sustainability Reporting Guide
and six Toolkits, which can be accessed at .
com/market/sustainability/sustainabilityreporting/sustainability-reporting-
guide-and-toolkits/. The Sustainability Reporting Guide provides the
business case for listed issuers and suggestions on how to embed
sustainability into their organisations.The Toolkits provide detailed guidance
on salient steps to be taken by listed issuers to embed sustainability and
make sustainability disclosures in their annual reports. We launched the
Sustainability Reporting Guide and Toolkits at the Sustainability Symposium
on 8 October 2015, with 600 participants attending.
STANDARDS OF BUSINESS CONDUCT OF INTERMEDIARIES
Our intermediaries at present continue to maintain healthy capital adequacy
ratios and leverage on strong prudential capital base, while at the same
time continuing to uphold satisfactory levels of business conduct and
adherence to the Business Rules.
As part of our ongoing efforts to mitigate systemic risks in the market, in
2015 we continued with our robust supervision of intermediaries through
on-site and off-site monitoring of the financial health of intermediaries,
client asset protection, business conduct and their compliance with the
Business Rules to maintain their financial strength. All intermediaries were
in compliance with the minimum financial requirements. There were also
no material findings affecting the overall systemic risk of the industry and
no industry-wide breaches in 2015.
Cyber security has been a major area of concern globally. In this respect,
we continued to place adequate emphasis and vigilance in the area of cyber
security. Hence, we embarked on several initiatives to enhance awareness
and the management of cyber threats, as follows:
a. Issuance of industry communication to intermediaries to enhance their
supervisory and monitoring measures to prevent cases of fraudsters
perpetrating cybercrime by hacking into the emails of unsuspecting
clients;
b. Issuance of a directive on the requirement for intermediaries to
conduct an internal audit review to assess the cyber security resilience
of their business, operations and components of critical IT systems;
c. Targeted inspections on intermediaries to assess and review
safeguard measures against cybercrime and recommend adoption of
best practices to mitigate the risk of cybercrime; and
d. Continuous engagements and industry advocacy programmes to
increase awareness of these matters.
Additionally, in order to facilitate ease of doing business and encourage
market development and at the same time introduce practices which are
in line with other markets, we embarked on an initiative to allow equity
intermediaries to offer non-cash rewards and incentives to their clients,
namely the Client Reward and Loyalty Programme Framework. This new
framework will encourage fair market conduct by equity intermediaries in
rewarding and retaining clients.
ENFORCEMENT ACTIVITIES
We continued with vigilant monitoring of compliance with our rules. Material
breaches detected undergo thorough investigation and enforcement
proceedings. Defaulting parties are given the opportunity to explain their
actions prior to determination of breach and appropriate sanctions. As
part of our governance process, we also have the Listing Committee and
Market Participants Committee which undertake deliberations on material
breaches of the LR and Business Rules.
In 2015, enforcement actions were taken against 14 listed issuers and
37 directors (of 9 listed issuers) for various breaches of the LR. As part
of enforcement, we also issued directives against the defaulting parties
including, where relevant, directives for directors to undergo mandatory
training as well as for errant listed issuers to conduct limited reviews on
quarterly reports.
MARKETPLACE REPORT:
FAIR AND ORDERLY MARKET