Business Ethics

To address the growing importance of business ethics, a three (3)-year plan has been approved by the Board of Kenanga Investment Bank Berhad (“KIBB” or “the Company”) in December 2018 to establish a proper Ethics Governance Structure within Kenanga Investment Bank Berhad and its Group of Companies (“Kenanga Group” or “the Group”).

The three (3)-year plan would create a structured and unified management, which would in turn, provide uniformity with the regulatory expectations, in respect of ethical business practices.

Industrial Advancement: Digital

Established for more than forty-five (45) years, we are a financial group in Malaysia with extensive experience in equity broking, investment banking, listed derivatives, treasury, corporate advisory, Islamic banking, wealth management and investment management.

Today, we are the largest independent investment bank in Malaysia and also one (1) of the top three (3) brokerage houses with the largest network of remisiers in the country.

We continue to bring digital trading experience to our local trading community via Rakuten Trade Sdn Bhd (“Rakuten Trade”), a joint venture between KIBB and Japanbased Rakuten Securities Inc.. Within the first (1st) year of its inception, Rakuten Trade was named Malaysia’s FinTech Company of the Year 2018, an award endorsed by the Malaysian Communications and Multimedia Commission.

During the year under review, Rakuten Trade introduced its second (2nd) product, Contra Trading, to complement its existing Cash Upfront facility. Its Contra Trading product garnered significant interest especially amongst traders below forty (40) years old. Rakuten Trade closed 2018 with twenty four thousand (24,000) accounts, almost half of which were first (1st) timers to the equity broking market in Malaysia.

Two (2) years ago, we launched a mobile application, Invesk, which provides clients with the market insights required to make better trading decisions. Today, they can even buy and sell stocks onthe-go via Invesk by linking to their Kenanga trading accounts.

In 2018, Invesk was further enhanced with the addition of our Unit Trust Fund Prices, Retail Negotiable Instruments of Deposit (“RNID”), Published Rate, as well as, Hong Kong and Singapore market data.

On our structured warrants’ front, the team introduced an online trading tool, Live Matrix on 2 January 2019. Available on www.nagawarrants.com, Live Matrix enables investors to view live feed from the Group’s market making system and has real-time access to market data and flexibility to trade on-the-go. With Live Matrix, warrant traders no longer need to estimate fluctuating warrant prices and anyone can access it free of charge.

Responsible Investment

The Group ensures that its clients, investors and customers are wellinformed at all times. All required information for the investing public (existing and potential clients) are disclosed in the respective product disclosure documents such as prospectus and information memoranda including product highlight sheets that adhere to the Securities Commission Malaysia (“SC”) requirements.

The Group Code of Professional Ethics and Conduct for Employees is a formal approach to ensure employees conduct Group business with the highest levels of ethical behaviour.

In the financial services industry, information is very valuable and this document contains comprehensive provisions for dealing with insider trading. This policy, along with the Kenanga Group Chinese Wall Policy, ensures that employees who possess material non-public and price sensitive information shall not use it to:

  • Influence any person in dealing in a transaction; or
  • Communicate this information to any person for the benefit of himself or others.

The Group’s business activities are highly regulated and employees are required to keep abreast with all applicable rules and regulations.

Sustainability In The Procurement Process

We continue to work on improving sustainability throughout our supply chain. Suppliers with sustainability-related certification such as the ISO 14001 are favoured.

Our Supplier Evaluation Model

Corruption, fraud and money-laundering

We have a zero-tolerance approach to non-compliance and our control environment undergoes constant review for improvement to reduce the risk of employees, customers and clients breaching legislation when dealing with the Group. Our structured approach ensures that business processes, policies or system changes required to support regulatory change are implemented.

Our policies, procedures and frameworks on anti-money laundering, anti-corruption and unethical practices comply with Malaysia’s laws and regulations. Pertinent recommendations from relevant international bodies and organisations have also been considered in these documents. Reviews and assessments are periodically conducted to measure the adequacy of the policies, procedures and frameworks to ensure they remain relevant within the current regulatory landscape.

We monitor the employees’ conduct and provide a safe platform for concerned individuals to raise concerns about unethical behaviour. A safe platform extends to how the Group is committed to raising awareness and preventing fraud – bolstering the confidence of investors, regulators, audit committee members and the general public vis-à-vis the Group’s integrity.

Fraud has become more prevalent worldwide due to the advancement of technology and evolvement of fraudsters. Recognising this, Kenanga Group became the first (1st) establishment in Southeast Asia to be accorded a Corporate Alliance Partner to the Association of Certified Fraud Examiners (“ACFE”) in 2015.

In conjunction with the International Fraud Awareness Week by the ACFE, the Group organised its second (2nd) Fraud Awareness Week in 2018, which signifies its proactive role as an anti-fraud professional. This also aims to initiate discussions on the importance of fraud prevention, amongst the capital markets participants and financial sector at large.

The Group believes doing the right thing is what the Company is all about. We see the importance of this effort and want to ensure that we are at the forefront of raising fraud awareness.

ANTI-COMPETITION

A competitive market promotes healthy growth. We adhere to the Competition Act 2010 and have embedded its principles of integrity, credibility, professionalism and transparency in our daily operations. The Group Competition Act Compliance Policy (“the Policy”) applies to the Group; both Directors and Employees must adhere to its terms.

The Policy provides a handy list of ‘Dos and Don’ts’ governing contact with competitors, clients, customers, distributors, suppliers and corporations deemed to be in a dominant position in the context of the Competition Act 2010.

The Group Competition Act Compliance Policy provides a comprehensive overview of practices that are prohibited under the Act such as anti-competitive agreements and the abuse of a dominant position. It also outlines the Group’s Compliance Framework including:
The responsibility of all employees, heads, senior management and those in an advisory role
Ensuring compliance with the Competition Act 2010
Ways to report infringements and non-compliance
The consequence of these infringements and non-compliance