KUALA LUMPUR, Jan 24 — Bank Negara Malaysia (BNM) has imposed an administrative monetary penalty of RM1.4 million on a financial institution over the fixing of the US dollar/ringgit exchange rate.

In a statement here today, it said, the financial institution failed to promptly notify the central bank of a significant audit finding in relation to its dealers’ misconduct involving the fixing of the USD/MYR exchange rate.

The financial institution, however, has paid the penalty, said BNM.

BNM said the financial institution has been strongly censured and issued with an order to address the shortcomings in internal controls to ensure timely notification of material findings and review existing internal policies, procedures and practices as well as to put in place robust surveillance mechanisms to prevent market abuse behaviours.

"The financial institution has given its full commitment to rectify these shortcomings and to prevent recurrence of such breaches,” it said.

To this end, the central bank has reminded all financial institutions that money and foreign exchange market manipulation activities were prohibited under the Financial Services Act 2013 (FSA).

"Financial institutions which are aware of such findings, are required to promptly notify the bank as required under the FSA.

"We will not hesitate to take serious enforcement actions on any party that breaches the law,” it added.

BNM said it would continue to closely monitor market activities in ensuring market participants were not involved in any money and foreign exchange market manipulation activities.

"It is the responsibility of the bank in carrying out our mandate under the law to ensure that public and genuine investors’ interests are protected at all times,” BNM said. — Bernama