Business Ethics

Following the approval of the Ethics Blueprint by the Board of Kenanga Investment Bank Berhad (“KIBB” or “the Company”) to address and emphasise the importance of ethics and integrity within Kenanga Investment Bank Berhad and its Group of Companies (“Kenanga Group” or “the Group”), various measures were undertaken to lay the foundation and the groundwork to chart the Group’s strategy on ethics and integrity for both short and long term.

Kenanga Group prioritises the importance of having the right values as the Group believes ethics and integrity is vital for business growth. Therefore, the Group has undertaken various measures in its commitment to emphasise business ethics amongst its employees. This includes the setting up of the Group Business Ethics and Integrity department to drive the initiatives to establish a proper Ethics Governance Structure for a structured and unified management of ethical business practices.

Countering Bribery, Corruption, Fraud and Money Laundering

Bribery, corruption, fraud, money laundering and such unethical practices associated with financial crimes go against the Group’s core values and undermine the viability of business and operations. Thus, the Group is committed to countering and preventing bribery in any form including but not limited to offering or receiving bribes, kick-backs or facilitation payments as well as any other manifestation of corrupt and unethical business conduct.

In achieving these goals, the Group adopts a robust and all-encompassing strategy to prevent, detect, and investigate incidences related to bribery, corruption, fraud and money laundering whilst holding perpetrators to account. In this regard, the Group Anti-Fraud, Bribery and Corruption Policy sets out a framework and provide direction and guidance for employees to undertaking due diligence in relation to bribery and corruption on all new and potential business partners. As a measure of implementation, communication of the relevant policies, procedures and guidelines to all employees is done through an in-house online system. Additionally, employees are also trained via various initiatives to raise awareness and be apprised in these critical areas.

The Group’s AML/CFT Policy & Procedure has also incorporated the required practices, control measures, guidance and direction in our effort to combat money laundering, terrorism financing and targeted financial sanctions risks. Pursuant thereto, the Group is devoted to enforcing a robust and effective AML/CFT framework in adherence to all related laws, regulations, guidelines and industry best practices towards ensuring the management of financial crime risks to mitigate potential regulatory and reputational risk.

In addition, the Group Code of Conduct for Vendors was adopted to stipulate the expected business conduct and ethical practices of all contractors, consultants, suppliers, agents and any person who engage with or undertake work for the Group. This is communicated to them from the very beginning and it includes the requirement to ensure compliance with the laws and regulations on prevention of financial crimes such as bribery, corruption, fraud and money laundering.

The policies, procedures and guidelines on anti-bribery, corruption, fraud and money laundering are reviewed and if required, revised periodically so as to ensure that the Group keeps abreast with any changes in industry practices as well as the applicable laws and regulations. Any revisions made are presented to the Board of the entities within the Group for endorsement and approval and therefore, ensuring that the Board has comprehensive oversight on the same.

To support the Group’s measures to counter unethical practices, it also has in place the Group Whistleblowing Policy & Guidance Notes. This policy details out the framework that is adopted and provides detailed explanation on the Group’s position on whistleblowing and clarification on relevant pertinent points. This policy also sets out the various channels to report on any illegal or unethical practices.

As part of the Group’s continuous effort to raise its anti-fraud awareness message and highlight its commitment to oppose bribery, corruption, fraud, money laundering and other unethical practices, the Group had its Fraud Awareness Campaign (“FAC”) for the 3rd time which kicked-off on 21 October 2019.

As per the previous editions of the FAC numerous activities were organised throughout the campaign period with the FAC culminating in the Group’s Fraud Awareness Week (“FAW”) which ran from 18 November 2019 to 22 November 2019. The FAW coincided with the International FAW organised by the Association of Certified Fraud Examiners of which the Group is a Corporate Alliance Partner since 2015. The Group also issues regular communications to its internal and relevant external parties on its anti-bribery and corruption programs as part of its overall commitment to combat bribery and corruption.

Supply Chain

Kenanga Group subscribes to a resilient supply chain to ensure smooth daily business operations and to embed sustainable practices in the organisation.

Our Supplier Evaluation Model

We recognise that engaging with vendors exposes the organisation to business disruption, financial, legal and even reputational risks.
To ensure quality and efficient delivery, robust guidelines and policies have been put in place for suppliers and employees, underpinned by good governance, to ensure sustainable procurement. The Group Procurement Policy serves as guidance for all employees of the Group in handling procurement-related activities.

Our Group Code of Conduct for Vendors underlines honesty, fairness and transparency, reflecting the Group’s values, ethics and integrity. In acknowledging that the quality of products and services provided by vendors impacts our delivery, we uphold the highest standards of ethics and integrity in business practices and relationships with vendors and suppliers.

More information on this can be found in the Ethics and Compliance Statement on pages 60 to 68 of this Annual Report. To further reduce procurement and supply chain risks, we conduct regular performance evaluation on vendors and suppliers.

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 sets out the standards of behaviour expected of all employees and provides the guiding principles in relation to doing what is right and behaving with integrity which includes among others, to obey all laws and regulations, protect confidential information and safeguard against its misuse, treat others fairly, avoid and prevent conflicts of interest and not be involved in bribery and corruption. It reflects the Group’s commitment to ensuring that its business and operations are conducted in an ethical, transparent and sustainable manner.

The Group also ensures that its key management personnel, which includes the Group Managing Director of Kenanga Investment Bank Berhad, the Chief Executive Officers of the various subsidiaries within the Group as well the Group’s senior officers who are responsible for the performance of a significant activity within the Group, have the highest standards of honesty and personal integrity. In this regard, the Group is committed to the proper management of any conflict of interest relating to its key management personnel by requiring them to disclose relationships, positions or circumstances that may give rise to a conflict of interest situation or potential for the same.

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.

Industrial Advancement

Established in Malaysia for more than 45 years, we are a financial group 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 of the top three (3) brokerage houses with the largest network of remisiers in the country.

In keeping with changing customer behaviour and increasing expectations, underscored by the advancement in Fintech over recent years, we have been homing in on innovation and digitalisation to deliver augmented products and redefine customer experience through faster speed-to-market and greater convenience.

We were one of the first movers in the domestic Fintech landscape with the setting up of Rakuten Trade Sdn Bhd (“Rakuten Trade”) three (3) years ago — a joint-venture with Japan-based Rakuten Securities, Inc. A novel platform which enables a fully online trading experience, Rakuten Trade has registered 47,500 accounts as at the end of 2019 and has handled transactions amounting to almost RM8 billion in trading value on Bursa Malaysia.

The COVID-19 outbreak has spurred new momentum in the online stock trading landscape. Having invested in our digital platforms over the last few years, including the rollout of Rakuten Trade, we are in a prime position to meet the shift towards online trading and continue growing the business through this challenging time.

In 2019, we streamlined and formalised our digital programmes under a comprehensive framework that outlines our approach to (i) digital business ventures, (ii) transformation of traditional business operations, and (iii) strategic collaboration with technology enablers. The scope of this roadmap also covers workflow automation, data analytics and importantly, enhanced cyber security.

In terms of product innovation, we launched our Securities Borrowing & Lending (“SBL”) product in 2019, which completes our equity broking products suite of offerings. This category of product is tailored to more sophisticated investors who are interested in shortselling, hedging or arbitraging.

At the start of the year, through our asset management subsidiary, Kenanga Investors Berhad, we launched Malaysia’s first leveraged and inverse exchange-traded funds (“ETFs”). ETFs are diversified investment instruments that provide hedging against market downturns, at a relatively cost-effective entry point.

Through continuous digital enhancements, as well as the roll-out of new investment tools, we hope to further accelerate the development of innovative products to broaden the diversification of investment options for our investors, contributing to a more vibrant investment landscape.

Responsible Lending

We support the corporate and retail community by providing them with access to appropriate credit facilities such as corporate loans, factoring and share margin financing, after taking into consideration their business and credit profiles via detailed assessment and approval processes.

The existing lending principles and guidelines adopted by KIBB require that the lending is to businesses with good fundamentals that comply with general regulatory requirements and government initiatives, particularly with regard to compliance with environmental laws and regulations.

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