Bursa Malaysia Annual Report 2015

TO OUR SHAREHOLDERS

Bursa Malaysia •

Annual Report 2015

• Enhancing our main Data Centre

We upgraded our main Data Centre to cater to current and future

demand for IT services. The enhancements introduced ensure greater

availability of resources organised in a simplified scalable architecture

that can operate around the clock. The enhancement upgrades our

Data Centre from a Tier-2 to a Tier-3 centre, with the latter having the

advantage of zero-downtimes owing to facilities maintenance.

• Enhancing our data leakage prevention

Security of Bursa Malaysia’s proprietary and client data is of foremost

priority for us in this age of digital disruption. Our data leakage

prevention processes work around the clock to prevent data leakage

to unauthorised parties through email, the internet and physical media.

The enhancements introduced provide better control of the flow of

information by filtering and preventing unauthorised dissemination of

confidential information.

• Enhancing our Advanced Persistent Threat (“APT”) prevention

In tandem with our data protection systems, we have also upgraded

our system to defend itself against APT attacks. The system introduced

can now detect and isolate APT threats, including “zero day” threats,

before they compromise the network and our operations.

• Receiving ISO certification for our cyber security measures

Whereas only the Securities Trading Services was ISO 27001 certified

previously, Bursa Malaysia received ISO 27001 certification for its

Information Security Management System which covers the following

areas:

SECURITIES TRADING SERVICES

ii.

EQUITY CLEARING

iii.

SETTLEMENT SERVICES AND DEPOSITORY SERVICES

ADDED RISK PROTECTION FOR OUR MARKET PARTICIPANTS

Bursa Malaysia has in place three funds to protect the interests of our

market participants, namely the Securities Market’s Clearing Guarantee

Fund (“CGF”), the Derivatives Market’s Clearing Fund (“CF”) and the

Depository Compensation Fund (“DCF”).

The CGF is a mechanism to settle claims arising from the defaults of

payments or deliveries by our Trading Clearing Participants (“TCPs”).

The fund guarantees us readily available financial resources to meet our

obligation to complete the settlement of trades when a TCP defaults on

its payment or delivery obligation, effectively giving our investors added

protection. Bursa Malaysia contributes RM85 million to the fund while

another RM15 million is contributed by TCPs.

The CF is a clearing fund established for the Derivatives Market. The fund

serves as a final recourse to protect market participants against losses

resulting from the failure of, or omission by, clearing participants. The fund

comprises fixed contributions of RM1 million from each TCP and RM5

million from Bursa Malaysia. The value of the fund presently stands at

RM26 million.

Finally, the DCF has the role to settle claims of investors against Bursa

Malaysia Depository arising from negligence and other issues. Each claim

is limited to RM100,000. Our policy is to maintain the balance in the fund at

RM50 million, which is fully borne by us.

The three funds provide additional safeguard to further manage risks

faced by our stakeholders while participating in our markets. The funds are

structured in accordance with best international practice and stress-tested

periodically to ensure they meet our market’s needs.

MARKETPLACE REPORT:

FAIR AND ORDERLY MARKET

BURSA MALAYSIA’S

SUSTAINABILITY FRAMEWORK

The framework aims to change the way our PLCs think about the

impact of their organisations by encouraging them to think more

holistically about their activities.

To facilitate this change, we amended our Listing Requirements (“LR”)

to require the disclosure of sustainability risks in our PLCs’ annual

filings. We recognise that PLCs may be unfamiliar with sustainability

reporting and hence we have taken a phased implementation

approach. Moreover, we have prepared a Sustainability Reporting

Guide and six reporting Toolkits that provide report preparers with

comprehensive reporting instruction.

THE EXCHANGE’S

SUSTAINABILITY

FRAMEWORK WAS

IMPLEMENTED ON

8 OCTOBER 2015

TO BRING THE

SUSTAINABILITY

PRACTICES OF OUR

PUBLIC LISTED

COMPANIES (“PLCs”)

AND OUR MARKET TO

THE NEXT LEVEL

Our Sustainability Framework contains three main pillars–

Economic, Environmental and Social (“EES”). The EES pillars

represent the main considerations of all issuers, i.e. issuers,

in addressing their sustainability risks and opportunities,

must think in terms of their organisation’s economic impact,

environmental impact and social impact. The term EES is often

used interchangeably with the term ESG, which stands for

Environmental, Social and Governance.

For the purposes of sustainability reporting, PLCs are required to

focus on EES as Governance is already covered extensively under

Bursa Malaysia’s existing Corporate Governance disclosure

requirements (LR and in the Malaysian Code of Corporate

Governance 2012). In doing so, PLCs will incorporate vital non-

financial information in their annual reports to provide a more

inclusive view of their business and their impact on stakeholders.

This will in turn help stakeholders form more complete opinions

about the sustainability and viability of a company, as well as to

assess whether a company’s values are in line with their own.

THE PILLARS OF OUR SUSTAINABILITY FRAMEWORK