Bursa Malaysia Annual Report 2015

96 / 222

GOVERNANCE
88 Bursa Malaysia • Annual Report 2015
STATEMENT ON INTERNAL CONTROL
AND RISK MANAGEMENT
• Conducting annual default drill exercises by simulating
default scenarios to test the effectiveness of the
Default Management Procedures to ensure they
remain robust and relevant in the face of the uncertain
market environment.
In 2015, there were no settlement defaults by any TCP or CP
and neither the CGF nor the Clearing Fund was called upon.
In order to further strengthen the Group’s credit risk
controls, in 2015 we enhanced our credit stress testing
and risk monitoring functions to include reviewing the
risk exposures and collateral policies according to the risk
standards set by the IOSCO.
In line with international best practices, Bursa Malaysia
Derivatives Clearing Berhad has published its Disclosure
Framework
derivatives/disclosure-framework/bmdc-disclosure-
framework/) in accordance with Principle 23 of the PFMI
issued by the CPSS, IOSCO.
We will continue to review and enhance the above processes
and procedures in accordance with best practices and
standards to ensure that they are viable and robust.
vi. Market Regulation Risk
The Group, as a securities and derivatives exchange in
Malaysia, has a statutory duty to ensure an orderly and
fair market and to ensure that we act in the public interest,
having particular regard to the need for investor protection. In
order to address any risks that could affect or emanate from
our front-line regulator role, we have put in place adequate
mechanisms and processes for monitoring, supervision
and oversight of the trading activities in our markets,
intermediaries of our markets and the listed issuers.
h. Towards the end of 2015, we revisited all our existing significant
risks together with any relevant inherent and emerging risks to
assess their effect on the Group for the upcoming year and we
recognised that the above significant risks will remain relevant
for 2016.
7. Performance Measurement
a. Key Performance Indicators (“KPIs”), which are based on the
Corporate and Divisional Balanced Scorecards and Individual KPI
and Behavioural Competencies, are used to track and measure
employees’ performance.
b. Yearly employee engagements and customer satisfaction surveys
are conducted to gain feedback on the effectiveness and efficiency
of stakeholder engagements for continuous improvement.
8. Employees’ Competency
Hiring and Termination Guidelines are in place, while training and
development programmes are conducted to ensure that employees
are kept up to date with the necessary competencies to carry out their
respective duties in achieving the Group’s objectives.
9. Conduct of Employees
a. Bursa Malaysia’s corporate culture is founded on the following
core values which are continuously inculcated in employees
during their service to Bursa Malaysia and its stakeholders:
CORE VALUES
B UILDING RELATIONSHIPS
U NITED TO ACHIEVE
R ESPONSIBILITY
S IMPLICITY
A GILITY
b. A Code of Ethics is established for all employees, which defines
the ethical standards and conduct of work required at Bursa
Malaysia.
c. Bursa Malaysia has a Whistleblower Policy and Procedures
(“WPP”) to provide an avenue for employees or any external
party to report any breach or suspected breach of any law or
regulation, including business principles and the Group’s policies
and guidelines, in a safe and confidential manner. An employee
who makes a report of improper conduct in good faith shall not be
subject to unfair dismissal, victimisation, demotion, suspension,
intimidation or harassment, discrimination, any action causing
injury, loss or damage or any other retaliatory actions by the
Group. The AC has the overall responsibility in overseeing the
implementation of the WPP for Bursa Malaysia Group.
d. A Securities Transaction Policy is established to govern the
securities transactions of the Group’s employees. The policy
prohibits employees from using unpublished price sensitive
information obtained during the course of their work for personal
gain or for the gain of other persons. All employees (including
principal officers) are also not allowed to trade in the securities
of Bursa Malaysia during the closed period, which is 30 calendar
days preceding the announcement of the Group’s quarterly and
annual financial results.