KENANGA ANNUAL REPORT 2020

90 4 1 2 3 5 6 7 SUSTAINABILITY STATEMENT Financial Crime Prevention The Group takes a zero-tolerance approach to all forms of financial crime including bribery, fraud, corruption, financing of terrorism, money laundering, proliferation financing and any other illicit activity connected to unethical business practices. Financial crime and associated activities go against our core values and undermine our business and operations. Reflecting this stance, the Group has a comprehensive strategy in place to prevent, detect, mitigate and scrutinise any illicit financial activities, with measures that hold perpetrators accountable. We regularly conduct reviews of our control environments and ensure compliance to the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions ( “AML/ CFT/TFS” ) requirements. All business units and subsidiaries are required to perform Semi-Annual Declaratory Self-Assessments to ensure the adherence to the AML/CFT/TFS procedures and employees’ awareness of the AML/CFT/TFS measures. Below are some of our key policies that work alongside regulatory requirements. • Customer Due Diligence for Remisiers • Group Financial Crime Intelligence Operations Manual • Guidance of Suspicious Transaction Reporting • Guidance on Suspicious Activity Reporting (in Group AML/CFT/TFS Procedure) • Kenanga Group’s Risk Scoring Methodology for AML/CFT Managing Good Business Conduct Our Group Business Ethics and Integrity Department ( “GBEI” ), established in 2019, is under the purview of Group Regulatory and Corporate Services ( “GRCS” ) which operates as our structured unit, managing ethical business practices and driving initiatives designed to ensure our business practices and operations comply with regulatory requirements. In 2020, GBEI: • implemented measures to comply with Section 17A Malaysian Anti-Corruption Commission Act 2009 and the T.R.U.S.T principles as per the Guidelines on Adequate Procedures. Actions included aligning our Group Anti-Fraud, Bribery and Corruption Policy to the updated section; and • introduced key ethical conduct policies including the Group Code of Conduct for Vendors, the Group Gifts, Entertainment and Hospitality Policy and the Group Incoming Non-Commercial Sponsorship Policy. Moving into 2021, GBEI is in the process of reviewing and enhancing the Group Code of Professional Ethics and Conduct for Employees, the Group Fraud Reporting Policy, the Group Conflict Management Policy and the Group Competition Act Policy. More information on GBEI’s activities in 2020 can be found in the Ethics and Compliance Statement on pages 62 to 69 of this Annual Report. REGULATORY COMPLIANCE SUSTAINABI L I TY STATEMENT ECONOMIC Material Topics: We recognise that regulatory compliance is the foundation of overall operational integrity. It complements and strengthens internal risk control mechanisms and is a hallmark of the reliability and trust that we strive to foster with our stakeholders. Through consistent training and ongoing communications, we inculcate a strong compliance culture in the organisation that impels employees to uphold high regulatory compliance standards across the Group. Safeguarding Our Operations REGULATORY COMPLIANCE 1.