K&N KENANGA HOLDINGS BERHAD

GROUP REGULATORY

REGULATORY UPDATE 44/2012 RULES/ REGULATIONS/ GUIDELINES/ CIRCULARS ISSUED BY REGULATORS FOR THE WEEK ENDED 14 DECEMBER 2012
TITLE ISSUANCE DATE REFERENCE PARTICULARS

BANK NEGARA MALAYSIA (BNM) Operations Of Ringgit Account Involving NonResident 28.11.12 BNM/RH/GL 008-17 1. This Guidelines serves to notify the changes in the operations of ringgit account involving non-residents effective 26 November 2012 in relation to: a. The increase of the limit for the transfer of funds to or from an External Account through internet banking, automated teller machines or ringgit cheques to RM10,000; and b. Management of ringgit funds by a non-resident intermediary. Arising therefrom, the following ECM Notice and circular letters have been amended accordingly: a. b. ECM3 dated 1 September 1998 on External Accounts Circular KL.EC.100/1/3 dated 26 November 2001 on External Accounts Transfer of Ringgit Funds by way of Internet Banking, ATM Cards and Ringgit Cheques Circulars KL.EC.100/6/2011/2(a), KL.EC.100/1/3, KL.EC.100/1/4 and KL.EC.100/1/7 dated 4 March 2011 on Payments in Ringgit and Foreign Currency Involving Resident and NonResident Individuals and Foreign Currency Accounts of Residents.

2.

c.

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Capital Adequacy Framework (Capital Components) (Updated)

28.11.12

BNM/RH/GL 001-35

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2.

3.

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6. 7.

This Updated Framework has been developed to strengthen capital adequacy standards for banking institutions in Malaysia, in line with the requirements set forth under Basel III. It outlines the general requirements concerning regulatory capital adequacy and the components of eligible regulatory capital. Banking institutions shall now be required to report the capital adequacy ratios in the new reporting form both on an entity (i.e. global) and consolidated basis. Instructions on the reporting form are provided in the reporting manual as appended in Attachment 2 of this Updated Framework. For trial reporting prior to the implementation date, banking institutions are required to compute the capital adequacy ratios for entity level (30 November and 31 December 2012 financial positions) and consolidated level (30 September 2012 financial position only) using the new reporting form and submit to BNM via Financial Institutions Network (FINET) by the 17th day after the reporting date and the 31 December 2012, respectively. In addition, for the purpose of paragraph 36.13 of this Updated Framework, banking institutions are required to use the form as provided in Attachment 3 therein, and submit to BNM before 14 January 2013, a list of instruments eligible for the gradual phase-out treatment. This Updated Framework is effective 1 January 2013. All attachments are available at www.bnm.gov.my

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Capital Adequacy Framework For Islamic Banks (Capital Components) (Updated)

29.11.12

BNM/RH/GL 007-20

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2.

3.

4.

5.

6. 7.

This Updated Framework has been developed to strengthen capital adequacy standards for banking institutions in Malaysia, in line with the requirements set forth under Basel III. It outlines the general requirements concerning regulatory capital adequacy and the components of eligible regulatory capital. Banking institutions shall now be required to report the capital adequacy ratios in the new reporting form both on an entity (i.e. global) and consolidated basis. Instructions on the reporting form are provided in the reporting manual as appended in Attachment 2 of this Updated Framework. For parallel reporting prior to the implementation date, Islamic banking institutions are required to compute the capital adequacy ratios for entity level (30 November and 31 December 2012 financial positions) and consolidated level (30 September 2012 financial position only) using the new reporting form and submit to BNM via Financial Institutions Network (FINET) by the 17th day after the reporting date and the 31 December 2012, respectively. In addition, for the purpose of paragraph 36.13 of this Updated Framework, Islamic banking institutions are required to use the form as provided in Attachment 3 therein, and submit to BNM before 14 January 2013, a list of instruments eligible for the gradual phase-out treatment. This Updated Framework is effective 1 January 2013. All attachments are available at www.bnm.gov.my

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Capital Adequacy Framework (Basel II Risk Weighted Assets) (Updated)

28.11.12

BNM/RH/GL 001-22

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2.

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This Updated Framework forms part of the overall capital adequacy framework that specifies the approaches for quantifying the Risk-Weighted Assets (RWA) for credit risk, market risk and operational risk hence should be read alongside the Capital Adequacy Framework (Capital Components). Following the amendments to the Capital Adequacy Framework (Capital Components), this Framework was updated accordingly. The amendments made to this Updated Framework amongst others are as follows:a. Investment in Credit Guarantee Corporation Malaysia Berhad (CGC) equities will now be subjected to 100% risk weight as per paragraph 2.44 (vii) of the Updated Framework, while all other exposures to CGC will apply the risk weights as per paragraph 2.44 (iv) therein; b. For the capital floor computation, the treatment for regulatory adjustments is clarified in paragraph 3.232 (ii) of the Updated Framework; and c. The computation of Large Exposure Risk Requirement will not include equity exposures which have been deducted in the computation of regulatory capital or are subjected to a 1250% risk weight as detailed in paragraph 6.6 of this Updated Framework. This Updated Framework is effective 1 January 2013.

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Capital Adequacy Framework For Islamic Banks (Risk Weighted Assets) (Updated)

29.11.12

BNM/RH/GL 007-21

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2.

3.

This Updated Framework sets out the requirements on the computation of the Risk-Weighted Assets (RWA) for Islamic banks specifying the methodologies for quantifying the minimum capital requirements to be held by Islamic banks against risk exposures associated with Islamic banking transactions namely credit risk, market risk and operational risk. The amendments made to this Updated Framework amongst others are as follows:a. Investment in Credit Guarantee Corporation Malaysia Berhad (CGC) equities will be subject to 100% risk weight as per paragraph 2.51(v) of the Updated Framework, while all other exposures to CGC will apply the risk weights as per paragraph 2.51(iii) therein; and b. For the capital floor computation, the treatment for regulatory adjustments is clarified in paragraph 3.217(ii) of the Updated Framework. This Updated Framework is effective 1 January 2013. This Guidelines outlines the enhancements on the disclosure requirements for presentation of reports and financial statements of Islamic Banking Institutions (IBIs). This Guidelines comprise the following:a. Regulatory Requirements; b. Submission Requirements; and c. Publication Requirements. This Guidelines is effective for financial year beginning on or after 1 January 2014. Reporting Institution (RI)s are given the option to adopt this Guidelines earlier. However, RIs are not allowed to apply the Malaysian Financial Reporting Standards (MFRS) 9 Financial Instruments for financial year beginning on or before 1 January 2015.

Guidelines On Financial Reporting For Islamic Banking Institutions

14.12.12

BNM/RH/GL 008-18

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2.

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Circular on Standardised Documentation for Description of Key Terms for Housing Loan / Home Financing Agreements

14.12.12

BNM/RH/CIR 001-16

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This circular sets out the requirement for banking institutions to adopt standardised documentation for description of key terms and conditions in respect of housing loan or home financing agreements effective 1 January 2013 to ensure continuity, clarity and ease of understanding which would promote consumers understanding of their rights and obligations hence enable informed decision making. The turnaround time for the processing of housing loans would also be improved thus promote the efficiency and delivery of the financial services sector. This Circular is applicable to agreements for housing loans and home financing involving a principle sum of RM500,000 and below. Further details related thereto are enumerated in this Circular. This Circular seeks to set out the schedule of meetings for BNMs Syariah Advisory Council (SAC) for 2013. Any referral application to the SAC shall be presented to the secretariat a month before the schedule meeting for decision. This Guidelines aims at providing a comprehensive policy on the imposition of compensation (ta'widh) and penalty (gharamah) for all Islamic financial products and services while prescribing the mechanism for late payment charge on judgement debt. It has therefore been divided into two (2) parts namely:a. Pre-judgment charges; and b. Post-judgement debt charges. The imposition of late payment charges Pre-judgment shall be implemented based on 3 principles as stipulated in the Guidelines in detail. As for Post-Judgment debt, the Shariah Advisory Council of BNM (SAC) decided that the court may impose a late payment charge on Islamic financial transactions based on the policy stipulated in this Guidelines on late payment charges, tawidh and gharamah.

Pekeliling Mengenai Jadual Mesyuarat Majlis Penasihat Syariah Bank Negara Malaysia bagi Tahun 2013

14.12.12

BNM/RH/CIR 021-3

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2.

Guidelines On Late Payment Charges For Islamic Banking Institutions

14.12.12

BNM/RH/GL 008-14

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4.

This Updated Guidelines serves to make the following amendments:Paragraph 5.2.2(i) & (ii) Description Further clarification of the definition of outstanding balance to mean the sum of outstanding principal and accrued profit. Further clarification to make appropriate reference to the Guidelines on Ibra' (Rebate) for SaleBased Financing

Footnote 13

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Implementation Of Shariah Advisory Council Of Bank Negara Malaysias Resolution On Bai` `Inah

14.12.12

BNM/RH/CIR 008-21

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2. 3.

"Frequently Asked Questions" to provide further guidance and clarification to this Updated Guidelines. IBIs shall at any time prior to the Effective date of this Updated Guidelines i.e. 17 December 2012, submit a letter each to the Jabatan Perbankan Islam dan Takaful and Jabatan Konsumer dan Amalan Pasaran of BNM confirming the status of compliance with the requirements of this Guidelines in writing. This Circular generally targets to:a. Outline the Shariah compliance requirements on Bai` `inah; and b. Set out the supervisory expectations in terms of operational requirements to ensure Shariah compliance. The Bai` `inah conditions to be satisfied by IBIs are as detailed in this Circular. IBIs must conduct a holistic operational review in the conduct of Bai` `inah transaction, including sales and marketing practices, documentations, accounting and risk management to ensure all conditions stipulated under paragraph 6.1 of this Updated Circular are satisfied. The Chairman of IBIs Board of Directors and Chairman of IBIs Shariah Committee shall then be required to provide attestation by 1 January 2013 that the whole spectrum of Bai` `inah operation has satisfied all the

Attachment 1

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validity conditions set out by the SAC. 4. Upon failure to do so, the IBI shall not be allowed to offer financial products and services based on Bai` `inah and shall have to undertake immediate measures to adopt alternative Shariah contracts to ensure minimal disruption in its operations and submit their development and action plan to the Pengarah, Jabatan Perbankan Islam dan Takaful Bank Negara Malaysia by 1 January 2013. The effective date of this Circular is 1 January 2013

5.

BURSA MALAYSIA SECURITIES BERHAD (BURSA SECURITIES) CIMB Investment Bank Berhad Registration Of Chief Executive Officer Y. Bhg. Dato Charon Wardini Bin Mokhzani 10.12.12 G 361 of 2012 Y. Bhg. Dato Charon Wardini Bin Mokhzani has register as Chief Executive Officer of CIMB Investment Bank Berhad effective 15 November 2011.

Maybank Investment Bank Berhad Registration Of Head Of Dealing - Mr. Clement Almaide A/L A M Francis Sanichi Technology Berhad (SANICHI (0133)) Capital Reduction And Share Consolidation

10.12.12

G 364 of 2012

Mr. Clement Almaide A/L A M Francis has been registered with Bursa Securities as the Head of Dealing of Maybank Investment Bank Berhad effective 28 November 2012.

12.12.12

G 372 of 2012

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2.

SANICHI has undergone a capital reduction and share consolidation exercise comprising of the following: a. reduction of the issued and paidup share capital of STB pursuant to Section 64(1) of the Companies Act, 1965 (Act), involving the cancellation of RM0.08 of the par value of each ordinary share of RM0.10 each in STB (STB Share(s)); and thereafter; b. consolidation of five (5) ordinary shares of RM0.02 each into one (1) new STB Share of RM0.10 each (Par Value Reduction and Consolidation). In relation to the Capital Reduction and Share Consolidation undertaken by SANICHI as a SPEEDS Corporate Exercise, Bursa Securities highlights that: a. on or after the Ex-date on 20 December 2012, trading of SANICHI shares will be based on

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3.

the newly adjusted share after the Capital Reduction and Share Consolidation of SANICHI shares; and b. on the basis of settlement taking place on or after 24 December 2012 with consolidated SANICHI shares of RM 0.10 each, any entitled shareholder who owns SANICHI shares as at Ex-date may sell only up to the maximum on the basis of settlement taking place on or after 24 December 2012 with consolidated SANICHI shares of RM 0.10 each, any entitled shareholder who owns SANICHI shares as at Ex-date may sell only up to the maximum SANICHI shares he expects to receive after the Capital Reduction and Share Consolidation, i.e. the reduced amount, on or after the Ex-date 20 December 2012. Impact on SANICHI shareholders CDS account at the end of the Entitlement Date (Book Closure Date): The estimated maximum number of SANICHI shares that may be sold from 20 December 2012 until 24 December 2012 shall be:

Number of shares held x 0.20

4.

Participating Organisations (PO) are reminded that it is important to caution all dealers and remisiers that they are only entitled to sell the maximum of 20% of the shares owned during the period from 20 December 2012 until 24 December 2012 to prevent the dealers and remisiers from overselling of their clients position.

Resignation Of ECM Libra Investment Bank Berhad (ECMLIB) As A Participating Organisation Of Bursa Malaysia Securities Berhad

14.12.12

G 375 of 2012

ECMLIB will resign as PO of Bursa Securities effective 15 December 2012.

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ECM Libra Investment Bank Berhad Cessation As Registered Persons:(i) (ii) Directors Chief Executive Officer Head Of Dealing Head Of Operations Head Of Compliance

14.12.12

G 376 of 2012

The following persons will cease to be registered with Bursa Securities effective 15 December 2012:Directors Dato' Mohd Ali bin Abd Samad Dato' Othman bin Abdullah Mr Lum Sing Fai Mr Lim Kian Onn Encik Mahadzir bin Azizan Datuk Kamarudin bin Md Ali Mr Lim Boon Soon Mr Tan Heng Meng Mr Tan Tong Nam Ms Jessie Peter A/P T P Caleb Peter

(iii) (iv) (v)

Chief Executive Officer Head of Dealing Head of Operations Head of Compliance

BURSA MALAYSIA SECURITIES CLEARING SDN BHD (BURSA CLEARING (S) ) This Circular serves to notify the salient Amendments To The 14.12.12 G 11/2012 changes made to the CGF Operational Clearing Guarantee Fund Procedures by the Equities Risk Management Operational Procedures Department of Market Operations as detailed (CGF Operational out in Annexure 1 of this Circular. Procedures) ECMLIB will resign as Clearing Participant of Bursa Clearing(S) effective 15 December 2012.

Resignation Of ECM Libra Investment Bank Berhad (ECMLIB) As A Clearing Participant Of Bursa Malaysia Clearing Sdn Bhd (Bursa Clearing (S))

14.12.12

G 12/2012

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BURSA MALAYSIA DERIVATIVES SDN BHD (BURSA DERIVATIVES) Announcement Of Eligible MGS For March 2013 Contracts 11.12.12 TP Circular: 34/2012 1. This Circular serves as an announcement of the eligible basket of Malaysian Government Securities (MGS) for March 2013 contracts of 3Year and 5-Year MGS futures expiring on 20 March 2013. The details on the codes, maturity dates, coupon payable and contract value are enumerated in this Circular. This Circular serves to notify that Bursa Securities will no longer be providing eMember reports effective 2 January 2013, hence: a. b. Reports would be generated up to 31 December 2012; E-Member portal would be accessible by Trading Participant (TP)s up to 7 January 2013 and shall be decommissioned thereafter; and All reports to be downloaded by TPs should be done prior to the above mentioned date.

2.

Discontinuation Of EMember Reports

13.12.12

Trading Circular: 35/2012

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c.

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TPs may thereafter acquire all the information on their front-office trading activities from the CME Firmsoft application by downloading the information in Excel format. TPs should take note that the information in CME Firmsoft may be retrieved up to a maximum of five (5) days only hence the necessary downloading and backup should be consistently carried out accordingly.

3.

BURSA MALAYSIA DERIVATIVES CLEARING BERHAD (BURSA CLEARING (D) ) The rates in this Circular will be applicable to Change in Performance 11.12.12 Clearing Circular: all contracts which remain open at the close of Bond / Margin Rate 33/2012 business on 11 December 2012 and will continue to apply until further notice.

BURSA MALAYSIA DEPOSITORY SDN BHD (BURSA DEPOSITORY)

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Upgrading Of eRapid System

13.12.12

ADA/DOD/029/2012

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This Circular serves to notify that Bursa Depository has upgraded their current eRapid system effective 17 December 2012. This upgrading will not result in any change to the functionality or screens formats as well as the circulars that will be made available to the Authorized Depository Agents (ADAs) and branches However, the new URL to access the eRapid shall be: https://erapidsystem.bursamalaysia.com /eRapid/secure/Login.aspx.

BURSA MALAYSIA BERHAD (BURSA MALAYSIA) IT CIRCULAR FOR PARTICIPATING ORGANIZATIONS Update of Message Specification 14.12.12 BURSA/PO IT 4 of 2012 1. This Circular serves to notify the updates of the BM Message Documentation for IVs document, removing Section 5.14 related to Exchange Traded Bonds (ETB) on dissemination of Coupon Rate. Duly attached in this Circular is Release 2.3 of BM Message Documentation for IVs.

2.

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