Malaysian Banking Law – Customers’ Rights Against the Bank
Case Scenario
Mr. Ahmad maintains both a current account and a fixed deposit account with a bank. He has RM20,000 standing to the credit of his current account and RM100,000 in a fixed deposit account. Mr. Ahmad issues a cheque for RM15,000 to a supplier, but the bank refuses payment despite sufficient funds being available in his account. He also discovers that the bank has delayed repayment of his deposit upon maturity and has failed to credit interest on his fixed deposit account.
Mr. Ahmad contends that the bank has breached its obligations as a banker and seeks to enforce his rights as a customer.


Customers’ Rights
The rights of a bank customer generally fall into three principal categories:
1. Right to Repayment
One of the most fundamental rights of a customer is the right to repayment of money deposited with the bank. The banker-customer relationship is essentially that of debtor and creditor, where the bank becomes indebted to the customer for the amount deposited.
An implied term of the banking contract is that the bank undertakes to repay the customer an equivalent amount to the money deposited. In the case of a current account, repayment is generally made upon demand by the customer. Once a valid demand is made, the bank is under a contractual obligation to honour it, subject to any legal restrictions or contractual limitations.
Accordingly, a customer is entitled to recover the balance standing to the credit of his account and may take legal action if the bank wrongfully refuses repayment.


2. Right to Draw Cheques
A customer who maintains sufficient funds in a current account possesses an implied contractual right to draw cheques against the credit balance available in that account.
Correspondingly, the bank owes an implied duty to honour cheques that are properly drawn and presented for payment, provided that:

• the customer has sufficient funds in the account;
• the cheque is valid and regular on its face;
• there are no legal impediments preventing payment; and
• the account has not been frozen, closed, or otherwise restricted.

However, a customer cannot insist that the bank honour a cheque exceeding the available credit balance unless an overdraft facility or other financing arrangement has been previously agreed upon between the parties.
Where a bank wrongfully dishonours a customer’s cheque despite sufficient funds being available, the customer may be entitled to damages for breach of contract. In certain circumstances, damages may extend to injury to reputation, particularly where the customer is engaged in business.


3. Right to Interest
Customers who maintain deposit accounts, such as savings accounts or fixed deposit accounts, are generally entitled to receive interest or returns on their deposited funds in accordance with the terms of the account.
The applicable interest rate is not fixed permanently and may vary according to prevailing market conditions, regulatory requirements, and the bank’s policies.
In contrast, customers holding ordinary current accounts are generally not entitled to receive interest on positive balances unless the account specifically provides otherwise.
Therefore, a depositor is entitled to receive interest or returns where such payment forms part of the contractual arrangement governing the deposit account.


Critical Analysis
The three rights collectively ensure fairness and confidence in the banking system.
The right to repayment safeguards customer ownership of deposited funds and reinforces the bank’s contractual obligation as debtor. Without this right, public confidence in banking institutions would be significantly undermined.
The right to draw cheques facilitates commercial transactions and enables customers to use banking services effectively. A wrongful refusal to honour cheques may damage a customer’s business reputation and disrupt commercial dealings.
The right to interest reflects the economic benefit that customers receive for allowing the bank to utilise deposited funds. It also promotes savings and investment activities within the financial system.
Nevertheless, these rights are not absolute. Banks may lawfully refuse payment where there are insufficient funds, legal restrictions, court orders, anti-money laundering concerns, or contractual limitations. Similarly, entitlement to interest depends entirely on the terms governing the particular account.


Solution to the Case Scenario
Mr. Ahmad would likely succeed in his claim against the bank for the following reasons:

1. Wrongful Dishonour of Cheque
   • Since RM20,000 was available in his current account and the cheque amounted to only RM15,000, the bank was under a contractual duty to honour the cheque.
   • The refusal to pay constitutes a breach of the banker-customer contract.
2. Failure to Repay Deposit
   • Upon maturity of the fixed deposit and a valid demand by the customer, the bank is obliged to repay the deposited amount.
   • Any unjustified refusal or delay may amount to a breach of contract.
3. Failure to Credit Interest
   • If the fixed deposit agreement provides for interest payments, the bank must pay such interest according to the agreed terms.
   • Failure to do so entitles the customer to claim the unpaid amount.

Mr. Ahmad may therefore seek repayment of his deposit, recovery of unpaid interest, and damages arising from the wrongful dishonour of the cheque.


Practical Application
In practice, customers should:

• Monitor account balances regularly.
• Ensure sufficient funds are available before issuing cheques.
• Review deposit account terms relating to interest payments.
• Retain account statements and transaction records as evidence.
• Promptly notify the bank of any wrongful refusal to honour payment instructions.

Banks, on the other hand, should:

• Honour valid payment instructions where sufficient funds exist.
• Process repayment requests promptly.
• Accurately calculate and credit interest according to contractual terms.
• Maintain efficient internal controls to avoid wrongful dishonour claims.

Conclusion
Under Malaysian banking law, customers enjoy three essential contractual rights: the right to repayment of deposited funds, the right to draw cheques against available credit balances, and the right to receive interest where contractually provided. These rights arise from the implied terms of the banker-customer relationship and form the foundation of modern banking operations. A bank that unjustifiably refuses repayment, wrongfully dishonours a cheque, or fails to pay agreed interest may be liable for breach of contract and the resulting losses suffered by the customer.

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​Malaysian Banking Law – Whistleblowing in Relation to Market Misconduct


Introduction


The integrity and stability of Malaysia’s financial system depend not only on laws prohibiting misconduct but also on the willingness of individuals to report wrongdoing when it occurs.


Recognising that regulators may not always be able to detect misconduct immediately, the Financial Services Act 2013 (FSA 2013) and the Islamic Financial Services Act 2013 (IFSA 2013) encourage persons with knowledge of illegal activities to come forward and report such conduct to Bank Negara Malaysia (BNM).


This process is known as whistleblowing.


Under section 256 of the Financial Services Act 2013 and section 267 of the Islamic Financial Services Act 2013, market participants may report information to BNM in good faith where they have knowledge or information that a contravention of financial services laws or regulatory requirements has been committed or is about to be committed.


⸻


Definition of Whistleblowing


Whistleblowing refers to the act of reporting suspected wrongdoing, misconduct, illegal activity, or regulatory breaches to the appropriate authority.


In the context of Malaysian banking law, whistleblowing occurs when a person informs Bank Negara Malaysia that:

• A contravention has occurred;

• A contravention is currently occurring; or

• A contravention is likely to occur in the future.

The report must be made:

• Honestly;

• In good faith; and

• Based on information or knowledge reasonably believed to be true.

⸻


The Simplest Meaning of Whistleblowing


Whistleblowing simply means:


“If you know someone in the financial market is breaking the law, report it to Bank Negara Malaysia.”


The purpose is to prevent harm before it becomes widespread.


⸻


Who Can Be a Whistleblower?


A whistleblower may be:

• A bank employee;

• A treasury dealer;

• A compliance officer;

• A risk management officer;

• A trader;

• A broker;

• An auditor;

• A director;

• A customer; or

• Any person who possesses relevant information.

The person does not need to be directly involved in the misconduct.


⸻


What Can Be Reported?


Market participants may report information relating to prohibited conduct under the FSA 2013 and IFSA 2013.


Examples include:


Market Manipulation

• Wash trades;

• Spoofing;

• Benchmark manipulation;

• Price flashing;

• Artificial market activity.

Misinformation and Rumour

• Spreading false market information;

• Circulating misleading statements;

• Disseminating unverified rumours that affect markets.

Insider Dealing

• Trading based on confidential information;

• Sharing insider information with others;

• Profiting from non-public information.

Other Regulatory Breaches

• Fraud;

• False reporting;

• Misconduct by financial institutions;

• Breaches of regulatory requirements.

⸻


Case Scenario


Suspicious Treasury Trading


A treasury executive at ABC Bank Berhad notices unusual trading activity by a senior foreign exchange dealer.


The executive observes that:

• Large buy and sell orders are repeatedly entered into the trading platform.

• The orders are cancelled moments later.

• The dealer appears to benefit from the resulting price movements.

The executive suspects that the dealer is engaging in spoofing, a form of market manipulation.


A few weeks later, the executive also learns that the same dealer has been sharing confidential market-sensitive information with an external acquaintance before major transactions occur.


The executive believes that the dealer may be involved in:

• Market manipulation; and

• Insider dealing.

Concerned about the integrity of the market, the executive reports the information to Bank Negara Malaysia.


BNM commences an investigation.


The investigation subsequently confirms that the dealer had engaged in spoofing and insider dealing.


⸻


Application to the Case Scenario


The treasury executive possessed information suggesting that serious regulatory breaches had occurred.


The suspected conduct involved:


Market Manipulation


The repeated placement and cancellation of orders suggested spoofing.


Insider Dealing


The disclosure of confidential information to external parties suggested insider dealing.


Rather than ignoring the misconduct, the executive reported the information to Bank Negara Malaysia in good faith.


The executive therefore acted as a whistleblower under section 256 FSA 2013 and section 267 IFSA 2013.


⸻


Solution to the Case Scenario


The treasury executive observed conduct that reasonably appeared to constitute market manipulation and insider dealing.


The executive:

• Gathered relevant information;

• Acted honestly;

• Reported the matter in good faith; and

• Alerted Bank Negara Malaysia to potential regulatory breaches.

The subsequent investigation confirmed the misconduct.


Accordingly:


The Executive

• Performed a legitimate whistleblowing function.

• Assisted regulatory enforcement.

• Helped protect market integrity.

The Dealer


May face:

• Criminal prosecution;

• Civil enforcement proceedings;

• Administrative penalties;

• Regulatory sanctions; and

• Internal disciplinary action.

The whistleblowing report enabled BNM to detect and stop unlawful conduct that might otherwise have continued.


⸻


Why Is Whistleblowing Important?


Many financial crimes occur behind closed doors.


Regulators cannot observe every transaction in real time.


Employees and insiders often become aware of misconduct before regulators do.


Whistleblowing therefore helps:

• Detect misconduct early;

• Prevent further harm;

• Protect investors;

• Protect financial institutions;

• Preserve market confidence;

• Support regulatory enforcement; and

• Maintain financial stability.

⸻


Simple Example


Imagine a school examination.


A student discovers that another student has secretly obtained the examination paper before the exam.


The student reports the misconduct to the teacher.


The teacher investigates and discovers cheating.


The reporting student is the whistleblower.


The same principle applies in banking.


A person who becomes aware of market misconduct reports it to Bank Negara Malaysia so that appropriate action can be taken.


⸻


Difference Between a Whistleblower and an Offender


Whistleblower

• Reports wrongdoing.

• Acts honestly.

• Cooperates with regulators.

• Helps prevent misconduct.

• Protects market integrity.

Offender

• Commits misconduct.

• Conceals wrongdoing.

• Misleads market participants.

• Breaches financial laws.

• Undermines market confidence.

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Practical Application


Whistleblowing is particularly important in:

• Treasury departments;

• Foreign exchange trading desks;

• Money market operations;

• Investment banking divisions;

• Compliance departments;

• Risk management units; and

• Financial market dealing rooms.

Employees should report suspicious conduct such as:

• Spoofing;

• Wash trades;

• Insider dealing;

• False market rumours;

• Unusual trading activity; and

• Regulatory breaches.

Early reporting can prevent substantial financial harm.


⸻


Critical Analysis


Whistleblowing plays a crucial role in modern financial regulation because regulators frequently depend upon information from insiders to detect misconduct.


Market manipulation, misinformation, and insider dealing are often deliberately concealed and may be difficult to identify through surveillance systems alone. Employees working within financial institutions are often the first to observe suspicious conduct.


The whistleblowing provisions under the FSA 2013 and IFSA 2013 therefore serve as an important enforcement mechanism by encouraging individuals to report wrongdoing before it causes widespread damage.


However, whistleblowing must be carried out responsibly. Reports should be made honestly and based on genuine concerns rather than personal grievances or malicious motives. The requirement that disclosures be made in good faith helps ensure that the system is not abused.


Overall, whistleblowing strengthens accountability, transparency, and market integrity within Malaysia’s financial system.


⸻


Conclusion


Under section 256 of the Financial Services Act 2013 and section 267 of the Islamic Financial Services Act 2013, market participants may report suspected misconduct to Bank Negara Malaysia in good faith.


Whistleblowing may relate to offences such as:

• Market manipulation;

• Misinformation and rumour;

• Insider dealing; and

• Other regulatory breaches.

A whistleblower is not the wrongdoer. Rather, the whistleblower assists regulators by reporting suspected misconduct so that appropriate enforcement action can be taken.


By encouraging the reporting of unlawful conduct, whistleblowing helps preserve market integrity, protect investors, support regulatory enforcement, and maintain confidence in Malaysia’s financial markets.

Malaysian Banking Law – Insider Dealing in the Wholesale Financial Market
Introduction
Financial markets operate fairly only when all participants trade using information that is generally available to the market.
If a person possesses confidential information that is not available to other traders and uses that information to make a profit or avoid a loss, that person gains an unfair advantage over other market participants.
To ensure fairness and market integrity, section 141(1)(d) of the Financial Services Act 2013 (FSA 2013) and section 153(1)(e) of the Islamic Financial Services Act 2013 (IFSA 2013) prohibit insider dealing in the money market and foreign exchange market.
The prohibition is also reinforced by the Code of Conduct for Malaysia Wholesale Financial Markets issued by Bank Negara Malaysia.


The Simplest Meaning of Insider Dealing
Insider dealing simply means:
Using secret information that other people do not know in order to make money or obtain an advantage in the market.
The information must be:

• Not generally available to the public;
• Not generally available to regular market participants;
• Important enough to affect market prices; and
• Capable of influencing trading decisions.

In simple terms:
You know something important before everyone else, and you trade because of that information.
That is insider dealing.


What Does The Law Prohibit?
Section 141(1)(d) FSA 2013 and section 153(1)(e) IFSA 2013 prohibit a person from:
Taking part in or carrying out a transaction based on information that is not generally available to persons who regularly deal in the money market or foreign exchange market, where the information would have a material effect on the price or value of financial instruments.


Breaking It Down into Simple Parts
The law asks four questions:
Question 1
Did the person possess information?
Yes.


Question 2
Was the information secret or confidential?
In other words:

• The public did not know.
• Other traders did not know.
• The information had not been announced.

Yes.


Question 3
Would the information affect market prices if it became known?
Yes.
The information is important enough to influence market behaviour.


Question 4
Did the person trade based on that information?
Yes.
If all four answers are “yes,” insider dealing may have occurred.


Simple Example
Scenario
A treasury dealer at ABC Bank Berhad learns through internal communications that the Malaysian Government will announce a major policy tomorrow that is expected to strengthen the Ringgit significantly.
The information has not yet been announced publicly.
Only a small number of people know about it.
The dealer immediately buys a large amount of Ringgit before the announcement.
The next day:

• The Government makes the announcement.
• The Ringgit strengthens sharply.
• The dealer earns a substantial profit.

Why Is This Insider Dealing?
The dealer:
Knew Secret Information
The announcement had not yet been released.


Knew It Would Affect Prices
The information was likely to strengthen the Ringgit.


Traded Before Everyone Else
The dealer bought Ringgit before the public knew.


Made a Profit Because of the Secret Information
The profit was generated from the informational advantage.
This is insider dealing.


Another Simple Example
Imagine an examination.
One student secretly obtains tomorrow’s examination paper.
Before the exam:

• The student studies all the questions.
• Other students do not know the questions.

The next day the student scores highest.
Why?
Because the student had information unavailable to everyone else.
Insider dealing works in a similar way.
The insider gains an unfair advantage because of confidential information.


Common Forms of Insider Dealing
Without limiting the scope of the FSA 2013 and IFSA 2013, insider dealing includes:
(1) Profiting from Insider Information
A person uses confidential information to:

• Make a profit;
• Avoid a loss;
• Improve trading results; or
• Obtain a financial advantage.

This may occur intentionally or through negligence.
Example
A trader learns confidentially that interest rates will increase tomorrow and immediately adjusts the bank’s trading position before the public announcement.


(2) Giving Insider Information to Others
A person may also commit an offence by providing confidential information to another person.
The recipient may then use the information to:

• Make profits;
• Benefit clients;
• Benefit the institution;
• Benefit friends or family members; or
• Benefit third parties.

Example
A treasury dealer tells a friend:
“The Ringgit will strengthen tomorrow because of an announcement I have seen.”
The friend buys Ringgit and profits.
Both individuals may face liability.


Disclosure of Insider Information
Market participants who possess insider information must not disclose it to others.
Disclosure is only permitted where it is:
Part of Employment Duties
Example:
A bank officer discussing the information with authorised colleagues who require it for their work.


Required by Law
Example:
Disclosure required by legislation.


Required by Regulators or Supervisory Authorities
Example:
Disclosure to Bank Negara Malaysia or other authorised regulators during an investigation.
Outside these situations, disclosure is prohibited.


Banking Example
Case Scenario
A treasury dealer at XYZ Bank Berhad attends an internal meeting.
During the meeting, senior management informs the treasury team that a major sovereign wealth fund will purchase RM5 billion worth of Malaysian Government Securities the following morning.
Management expects the purchase to increase demand and raise the market value of those securities.
The information is strictly confidential.
The transaction has not been announced publicly.
Later that evening, the dealer personally purchases a large quantity of the same government securities through another account.
The next day:

• The sovereign wealth fund completes its purchase.
• Demand increases significantly.
• Prices rise.
• The dealer earns a substantial profit.

An investigation later reveals that the dealer traded solely because of the confidential information obtained during the internal meeting.


Application to the Case Scenario
The dealer possessed information that:

• Was confidential;
• Was not generally available to the market;
• Was price-sensitive; and
• Was likely to affect the value of government securities.

The dealer used that information before it became public.
The dealer therefore gained an unfair advantage over other market participants.
This conduct amounts to insider dealing under section 141(1)(d) FSA 2013 and section 153(1)(e) IFSA 2013.


Solution to the Case Scenario
The treasury dealer traded government securities after receiving confidential information concerning a forthcoming RM5 billion purchase by a sovereign wealth fund.
The information was:

• Non-public;
• Material;
• Price-sensitive; and
• Likely to affect market value.

The dealer used the information to purchase securities before the market became aware of the transaction.
The subsequent profit resulted directly from the confidential information.
Accordingly, the dealer may have committed insider dealing under:

• Section 141(1)(d) Financial Services Act 2013; and
• Section 153(1)(e) Islamic Financial Services Act 2013.

Bank Negara Malaysia may therefore initiate:

• Criminal proceedings;
• Civil enforcement action;
• Administrative penalties;
• Regulatory sanctions; and
• Disciplinary proceedings.

Difference Between Legitimate Trading and Insider Dealing
Legitimate Trading

• Information is publicly available.
• All market participants can access the information.
• No unfair advantage exists.
• Trading decisions are based on public knowledge.
• Market remains fair.

Insider Dealing

• Information is confidential.
• Information is unavailable to other market participants.
• Insider has an unfair advantage.
• Trading occurs before public disclosure.
• Market fairness is undermined.

Why Is Insider Dealing Wrong?
Imagine two traders:
Trader A
Knows a major announcement will happen tomorrow.
Trader B
Knows nothing.
If Trader A trades first and profits from secret information, Trader B never had a fair chance.
The market becomes unfair.
The law therefore seeks to ensure that:
Everyone trades on the same playing field.
No one should profit merely because they possess confidential information unavailable to others.


Critical Analysis
Insider dealing strikes at the heart of market integrity because it destroys confidence in the fairness of financial markets.
Investors and institutions participate in markets on the assumption that prices reflect publicly available information. If insiders are allowed to trade using confidential information, ordinary market participants are placed at a significant disadvantage.
The prohibition under sections 141 FSA 2013 and 153 IFSA 2013 therefore protects:

• Market fairness;
• Investor confidence;
• Price integrity;
• Equal access to information; and
• Financial stability.

The provisions are particularly important in wholesale financial markets, where confidential information relating to government policy, foreign exchange operations, benchmark rates, sovereign transactions, and institutional trades can significantly affect market prices.


Easy Examination Summary
What is insider dealing?
Using confidential information that is not generally available to the market to make a profit, avoid a loss, or obtain an unfair trading advantage.
When does it occur?
When a person:

• Possesses non-public information;
• Knows the information is important;
• Trades based on that information; or
• Gives the information to another person who profits from it.

Why is it prohibited?
Because it gives insiders an unfair advantage and undermines confidence in the financial markets.
Simple Rule to Remember
“If the information is secret and capable of affecting prices, do not trade on it and do not tell others to trade on it.”

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Malaysian Banking Law – Misinformation and Rumour in the Wholesale Financial Market
Introduction
Financial markets function efficiently only when market participants make decisions based on accurate, reliable, and truthful information. The spread of false information, misleading statements, or unverified rumours can distort market behaviour, affect prices, undermine investor confidence, and threaten financial stability.
To preserve the integrity of Malaysia’s wholesale financial markets, section 141(1)(c) of the Financial Services Act 2013 (FSA 2013) and section 153(1)(d) of the Islamic Financial Services Act 2013 (IFSA 2013) prohibit the making or dissemination of false or misleading statements or information that may influence trading decisions or affect market rates in the money market or foreign exchange market.
These provisions are further reinforced by the Code of Conduct for Malaysia Wholesale Financial Markets issued by Bank Negara Malaysia (BNM).


Definition of Misinformation and Rumour
Misinformation and rumour occur when a person makes a statement or disseminates information that is false or misleading in a material respect and which is likely:

• To induce another person to deal in financial instruments; or
• To raise, lower, maintain, or stabilise the market rate of financial instruments in the money market or foreign exchange market.

The prohibition applies where the person:
(1) Fails to Exercise Due Care
The person does not take reasonable steps to verify whether the information is true or false before communicating it.
or
(2) Knows or Ought Reasonably to Know It Is False
The person knows, or a reasonable person in the same circumstances should have known, that the information is false or materially misleading.
Accordingly, liability may arise not only from deliberate lies but also from reckless or careless dissemination of unverified information.


Why Is Misinformation Dangerous?
Financial markets are heavily influenced by information.
Traders constantly react to:

• Economic news;
• Government announcements;
• Central bank policies;
• Market reports;
• Corporate developments; and
• Foreign exchange information.

If false information enters the market, participants may make decisions based on incorrect assumptions.
This may result in:

• Artificial price movements;
• Unnecessary panic;
• Distorted supply and demand;
• Investor losses;
• Reduced confidence in the market; and
• Financial instability.

Common Forms of Misinformation and Rumour
Without limiting the broad scope of sections 141 FSA 2013 and 153 IFSA 2013, the following conduct may constitute an offence.
(A) Starting and Spreading Rumours to Move the Market
A person deliberately creates or spreads false rumours to influence market prices or deceive market participants.
Examples

• Spreading false information that a bank is facing liquidity problems.
• Claiming that a government policy announcement is imminent when it is not.
• Circulating false reports that a central bank intends to intervene in the foreign exchange market.
• Fabricating news regarding the issuance of government securities.

The objective is often to manipulate market behaviour for personal gain.


(B) Carelessly Repeating Unverified Information
A person discusses or circulates information without taking reasonable steps to verify its accuracy.
The information may:

• Be unsubstantiated;
• Be false;
• Be materially misleading; and
• Cause harm to third parties.

Examples

• Forwarding unverified market reports.
• Sharing unconfirmed rumours with traders.
• Repeating speculative information as fact.
• Distributing unverified information concerning another financial institution.

Even where there is no intention to deceive, liability may arise if due care was not exercised.


Simple Example
Scenario
A trader receives a message claiming that the Malaysian Government is planning to impose emergency foreign exchange controls.
The trader has no evidence that the information is true.
Without checking the accuracy of the information, the trader immediately shares it with several banks and foreign exchange dealers.
As the rumour spreads:

• Traders become concerned.
• Market participants rush to buy foreign currencies.
• The Ringgit weakens.
• Foreign exchange rates move significantly.

Several hours later, the Government officially denies the rumour.
The information was false from the beginning.
The trader may have committed an offence because he disseminated false information without exercising due care.


Banking Example
Case Scenario
A treasury dealer at ABC Bank Berhad learns from an informal conversation that Bank XYZ may be experiencing financial difficulties.
The dealer has no documentary evidence and has not verified the information.
Believing that the rumour may affect the market, the dealer sends messages to several market participants stating that Bank XYZ is facing a severe liquidity crisis and may require regulatory intervention.
The information spreads rapidly throughout the wholesale financial market.
As a result:

• Other banks become reluctant to deal with Bank XYZ.
• Market confidence declines.
• Foreign exchange traders react negatively.
• The market value of Bank XYZ’s financial instruments falls.
• Funding costs for Bank XYZ increase.

Subsequent investigations reveal that Bank XYZ was financially sound and that the information was entirely false.
Further investigation shows that the dealer either knew the information was unreliable or failed to take reasonable steps to verify its accuracy before disseminating it.


Application to the Case Scenario
The treasury dealer disseminated information that was false or materially misleading.
The dealer’s statements were capable of:

• Influencing trading decisions;
• Affecting market confidence;
• Lowering the value of financial instruments;
• Influencing foreign exchange activity; and
• Causing other market participants to alter their behaviour.

The dealer failed to verify the information before circulating it and therefore did not exercise due care.
Alternatively, if evidence shows that the dealer knew the information was false, liability becomes even clearer.
The conduct therefore falls within section 141(1)(c) FSA 2013 and section 153(1)(d) IFSA 2013.


Solution to the Case Scenario
In this scenario, the treasury dealer circulated false information regarding the financial condition of Bank XYZ.
The information was likely to influence the behaviour of other market participants and affect market conditions.
The dealer either:

• Failed to exercise reasonable care to verify the information; or
• Knew, or ought reasonably to have known, that the information was false or materially misleading.

Accordingly, the dealer may have committed an offence under:

• Section 141(1)(c) Financial Services Act 2013; and
• Section 153(1)(d) Islamic Financial Services Act 2013.

Bank Negara Malaysia may therefore initiate:

• Criminal proceedings;
• Civil enforcement action;
• Administrative penalties;
• Regulatory sanctions; and
• Disciplinary action against the dealer.

Where weaknesses in compliance controls or supervision contributed to the misconduct, enforcement action may also be taken against ABC Bank Berhad.


Difference Between Genuine Market Information and Misinformation
Genuine Market Information

• Information is verified before dissemination.
• Reasonable investigation has been conducted.
• Facts are supported by evidence.
• Information is presented accurately.
• No intention to mislead the market.
• Supports informed decision-making.
• Enhances market transparency.

Misinformation and Rumour

• Information is false or materially misleading.
• Information is unverified or unsupported.
• Reasonable care is not exercised.
• Information may be knowingly false.
• Market participants are misled.
• Trading decisions are distorted.
• Market confidence may be harmed.

Practical Application
The prohibition against misinformation and rumour is particularly relevant to:

• Treasury dealers;
• Foreign exchange traders;
• Money market participants;
• Investment bankers;
• Bank executives;
• Financial analysts;
• Market commentators; and
• Employees of financial institutions.

Before disseminating information, market participants should:

• Verify facts from reliable sources;
• Confirm information through official channels;
• Exercise professional judgment;
• Avoid repeating unverified rumours;
• Maintain proper records of information sources; and
• Comply with internal compliance procedures.

The principle is simple:
“Verify first, communicate later.”


Critical Analysis
The prohibition against misinformation and rumour reflects the importance of information integrity in modern financial markets.
Unlike traditional forms of market manipulation, misinformation can spread rapidly through electronic communication platforms, social media, messaging applications, and trading networks. A single false statement can affect thousands of market participants within minutes.
The legislation therefore imposes liability not only on persons who deliberately spread false information but also on those who recklessly or carelessly disseminate unverified information without exercising due care.
This approach is justified because market participants, particularly professional traders and financial institutions, occupy positions of trust and influence. Their statements can significantly affect market behaviour.
However, regulators must carefully distinguish between:

• Genuine opinions;
• Legitimate market speculation;
• Honest mistakes; and
• Deliberate or reckless misinformation.

The challenge lies in balancing market freedom of expression with the need to preserve market integrity and investor confidence.
The provisions therefore serve an important preventive function by encouraging accuracy, responsibility, and professionalism in financial communications.


Conclusion
Under section 141(1)(c) of the Financial Services Act 2013 and section 153(1)(d) of the Islamic Financial Services Act 2013, it is an offence to make or disseminate information that is false or materially misleading and which is likely to influence trading activity or affect market rates in the money market or foreign exchange market.
Liability may arise where a person:

• Fails to exercise due care regarding the truth of the information; or
• Knows, or ought reasonably to know, that the information is false or misleading.

Common examples include:

• Starting rumours to move markets;
• Spreading false information about financial institutions;
• Circulating misleading market reports; and
• Repeating unverified information without proper verification.

Such conduct undermines market integrity, distorts trading decisions, and threatens confidence in Malaysia’s wholesale financial markets. Consequently, offenders may face criminal, civil, and administrative enforcement action under the FSA 2013 and IFSA 2013.

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Malaysian Banking Law – Market Manipulation in the Wholesale Financial Market
Introduction
The integrity of Malaysia’s financial system depends heavily on fair and transparent market practices. Market participants must not engage in activities that distort prices, create artificial market conditions, or mislead other participants regarding the true state of the market.
To preserve confidence in the financial system, section 141 of the Financial Services Act 2013 (FSA 2013) and section 153 of the Islamic Financial Services Act 2013 (IFSA 2013) prohibit various forms of market manipulation in the money market and foreign exchange market. These provisions are further reinforced by the Code of Conduct for Malaysia Wholesale Financial Markets issued by Bank Negara Malaysia (BNM).
Market manipulation is regarded as a serious offence because it undermines market integrity, interferes with genuine price discovery, and creates unfair advantages for certain market participants.


Definition of Wholesale Financial Market
A Wholesale Financial Market refers to a market in which large-scale financial transactions are conducted between institutional participants rather than individual retail customers.
Participants commonly include:

• Banks;
• Investment banks;
• Islamic banks;
• Development financial institutions;
• Insurance companies;
• Takaful operators;
• Pension funds;
• Asset management companies;
• Government agencies;
• Corporations; and
• Other institutional investors.

Transactions in the wholesale financial market generally involve:

• Foreign exchange (FX);
• Money market instruments;
• Government securities;
• Bonds;
• Sukuk;
• Derivatives;
• Interest rate products; and
• Other financial instruments.

Because these transactions involve substantial sums and affect the wider economy, market participants are expected to comply with the highest standards of honesty, professionalism, and transparency.


Case Scenario
XYZ Bank Berhad operates a large treasury department that actively trades foreign exchange and government securities in Malaysia’s wholesale financial market.
As the end of a trading day approaches, a senior foreign exchange dealer notices that the bank’s profitability targets for the quarter may not be achieved. To improve the bank’s reported trading performance, the dealer places a series of large foreign exchange orders designed solely to influence the closing market rate.
The dealer has no genuine intention of completing several of the transactions. Some orders are cancelled immediately after other market participants react to them. In addition, the dealer collaborates with traders from another financial institution to submit coordinated quotations that artificially influence a benchmark fixing rate used in the market.
The dealer also enters numerous buy and sell orders through an electronic trading platform without any intention to execute the transactions. The objective is to create the appearance of strong market demand and liquidity so that other participants will trade at prices favourable to the dealer.
Following a routine market surveillance exercise, Bank Negara Malaysia identifies unusual trading patterns and commences an investigation.


Statutory Prohibition of Market Manipulation
Section 141 Financial Services Act 2013
Section 141 of the Financial Services Act 2013 prohibits a person from:
1. Creating Artificial Rates
A person must not participate in or carry out any transaction that has, or is likely to have, the effect of creating an off-market rate which results in an artificial rate for dealing in financial instruments within the:

• Money market; or
• Foreign exchange market.

The law seeks to ensure that market prices and rates reflect genuine economic activity and legitimate market forces rather than manipulation.


2. Creating a False or Misleading Appearance
A person must not create or cause anything that creates a false or misleading appearance of active dealing in financial instruments within the:

• Money market; or
• Foreign exchange market.

The purpose of this prohibition is to prevent conduct that deceives market participants into believing that there is genuine trading activity, demand, supply, or liquidity when this is not actually the case.


Examples of Market Manipulation
Without limiting the broad scope of sections 141 FSA 2013 and 153 IFSA 2013, the following conduct constitutes market manipulation.
(A) Influencing the Closing Price
This occurs where a person trades with the intention of benefiting from influencing the closing price of a financial instrument.
The objective is not genuine trading but artificially affecting the market’s closing valuation for personal or institutional gain.
Example
A dealer executes a large volume of transactions shortly before market close solely to push prices higher and improve the valuation of securities held by the bank.


(B) Interfering with Normal Supply and Demand
This occurs when a person interferes with ordinary market forces so that prices no longer reflect genuine supply and demand.
Examples include:
Wash Trades
Transactions where the same person is effectively both the buyer and seller, creating the illusion of market activity without any real change in ownership.
Stop-Loss Hunting
Deliberately moving market prices to trigger other traders’ stop-loss orders for the manipulator’s advantage.
Such conduct distorts market conditions and misleads participants.


(C) Trading Without Genuine Commercial Intention
Market participants must have a legitimate trading or commercial purpose when entering transactions.
A transaction entered solely to manipulate prices, influence perceptions, or mislead other market participants may constitute market manipulation.
Example
Entering large transactions solely to affect market prices without any real economic purpose.


(D) Manipulating Benchmark Fixing Rates
Benchmark rates are widely used in financial markets to price transactions and determine contractual obligations.
Manipulation occurs where traders:

• Collude with others;
• Coordinate quotations; or
• Submit false information

for the purpose of influencing benchmark fixing rates.
Example
Several traders cooperate to submit artificial foreign exchange quotations that influence a benchmark reference rate.


(E) Spoofing
Spoofing occurs when a trader places bids or offers with the intention of cancelling them before execution.
The objective is to mislead other market participants regarding genuine market demand or supply.
Example
A trader places a large purchase order to create the impression of strong demand but cancels the order immediately before execution.


(F) Price Flashing
Price flashing occurs when a person enters prices into an electronic trading or broking platform without any genuine intention to trade.
The purpose is to create a false impression regarding:

• Market prices;
• Liquidity;
• Supply; or
• Demand.

Example
A trader repeatedly displays attractive buying prices to lure participants into the market before withdrawing those quotations.


Application to the Case Scenario
The conduct of the dealer at XYZ Bank Berhad falls squarely within the statutory prohibitions against market manipulation.
First, the dealer attempted to influence the closing foreign exchange rate through large transactions entered near the end of the trading session. This constitutes trading with the intention of benefiting from influencing the closing price of a financial instrument.
Second, the dealer entered orders without any genuine intention of executing them. Such conduct amounts to spoofing and demonstrates an absence of legitimate commercial intent.
Third, the dealer collaborated with traders from another institution to influence a benchmark fixing rate. This represents benchmark manipulation through collusion.
Fourth, the dealer entered numerous orders on an electronic trading platform merely to create the appearance of market demand and liquidity. This amounts to price flashing and creates a false or misleading appearance of active dealing.
The dealer therefore engaged in several forms of market manipulation prohibited under section 141 FSA 2013 and section 153 IFSA 2013.


Solution to the Case Scenario
In this scenario, the senior dealer deliberately attempted to distort the operation of the wholesale financial market.
The dealer:

• Influenced the closing market rate for personal or institutional advantage;
• Entered transactions without genuine trading intentions;
• Manipulated benchmark fixing rates through collusion with other traders;
• Used spoofing techniques by placing and cancelling orders; and
• Engaged in price flashing to create a false appearance of market liquidity.

These actions constitute market manipulation under section 141 of the Financial Services Act 2013 and section 153 of the Islamic Financial Services Act 2013.
Accordingly, Bank Negara Malaysia may commence:

• Criminal proceedings;
• Civil enforcement actions;
• Administrative penalties;
• Regulatory sanctions; and
• Disciplinary actions against the dealer.

If weaknesses in supervision, governance, compliance systems, or risk management contributed to the misconduct, regulatory action may also be taken against XYZ Bank Berhad.


Practical Application
The prohibition against market manipulation is particularly relevant to:

• Treasury departments;
• Foreign exchange dealers;
• Money market traders;
• Bond traders;
• Sukuk traders;
• Investment bankers;
• Electronic trading platform operators; and
• Financial market intermediaries.

Banks should therefore:

• Establish strong compliance controls;
• Monitor trading activities in real time;
• Implement surveillance systems;
• Maintain clear audit trails;
• Conduct regular compliance training;
• Enforce ethical dealing standards;
• Monitor benchmark submissions; and
• Investigate suspicious trading behaviour promptly.

These measures reduce the risk of market abuse and help preserve confidence in the financial system.


Critical Analysis
The prohibition on market manipulation is fundamental to ensuring that financial markets operate efficiently and fairly. Financial markets rely upon genuine supply and demand to determine prices and allocate capital effectively.
Manipulative practices such as spoofing, wash trades, benchmark manipulation, and price flashing undermine the reliability of market prices and distort investment decisions. If left unchecked, such conduct can erode confidence among market participants and weaken the stability of the financial system.
The broad wording of sections 141 FSA 2013 and 153 IFSA 2013 demonstrates the legislature’s intention to capture both traditional and technologically sophisticated forms of market abuse. This is particularly important in modern markets where electronic trading systems allow manipulation to occur rapidly and across multiple jurisdictions.
Nevertheless, enforcement remains challenging. Regulators must distinguish between legitimate trading strategies and manipulative conduct, often requiring sophisticated surveillance technology and detailed market analysis. Consequently, effective enforcement depends not only on legislation but also on robust monitoring systems, strong corporate governance, and a culture of compliance within financial institutions.
The provisions therefore serve both a punitive and preventative function by deterring misconduct while promoting market integrity and investor confidence.


Conclusion
Market manipulation is a serious offence under section 141 of the Financial Services Act 2013 and section 153 of the Islamic Financial Services Act 2013.
These provisions prohibit conduct that:

• Creates artificial market rates;
• Produces false or misleading appearances of market activity;
• Interferes with genuine supply and demand;
• Manipulates benchmark fixing rates;
• Involves spoofing;
• Involves wash trades;
• Involves stop-loss hunting; and
• Involves price flashing on electronic trading platforms.

Within Malaysia’s wholesale financial markets, participants are expected to conduct business honestly, transparently, and with genuine commercial intent. Any person who engages in market manipulation may face criminal, civil, and administrative enforcement action. These prohibitions play a vital role in maintaining market integrity, ensuring fair price discovery, protecting investors, and preserving confidence in Malaysia’s financial system.

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Malaysian Banking Law – Wash Trade
Definition
A wash trade is a form of market manipulation where a person directly or indirectly buys and sells the same financial instrument without any genuine commercial purpose or genuine change in beneficial ownership.
The transaction creates a false or misleading appearance of active trading, market demand, liquidity, or trading volume, even though no real economic transaction has occurred.
A wash trade is prohibited because it deceives other market participants into believing that there is genuine market activity when, in reality, the transaction is artificial.


Why Is It Called a Wash Trade?
The term “wash trade” is used because the transaction effectively cancels itself out or “washes out.”
Although there may appear to be a purchase and sale, the person ultimately remains in substantially the same position before and after the transaction.
There is:

• No genuine transfer of beneficial ownership;
• No legitimate investment objective;
• No genuine commercial purpose; and
• Little or no real economic risk.

The sole purpose is often to create an illusion of market activity.


Simple Example
Scenario
Mr A owns RM10 million worth of government securities.
He instructs Broker X to sell the securities from Account A while simultaneously arranging for the same securities to be purchased through Account B, which is also under his control.
After the transaction:

• Mr A still effectively owns the same securities;
• No genuine investment decision has been made;
• No real economic exposure has changed.

However, the market records a RM10 million transaction.
Other market participants may wrongly assume:

• There is significant market demand;
• Trading activity is increasing;
• The securities are becoming more attractive.

This is a wash trade.


Banking Example
Case Scenario
A treasury dealer at XYZ Bank Berhad wishes to create the appearance of strong market interest in a government bond.
The dealer secretly arranges for:

• XYZ Bank to sell the bond; and
• A related institution to purchase the same bond,

with an understanding that the securities will eventually be returned or repurchased.
The transaction has no genuine commercial purpose.
Its objective is to:

• Increase reported trading volume;
• Create artificial demand;
• Influence market perception; and
• Encourage other investors to enter the market.

The transaction constitutes a wash trade and may amount to market manipulation under section 141 of the Financial Services Act 2013 and section 153 of the Islamic Financial Services Act 2013.


Why Are Wash Trades Harmful?
Wash trades distort the proper operation of financial markets because they create false signals regarding:
Trading Volume
Investors may believe that significant trading activity exists when it does not.
Market Demand
The market may appear to have strong buying interest even though the transactions are artificial.
Liquidity
Participants may wrongly assume that there is sufficient liquidity in the market.
Market Price
Artificial transactions may influence prices and affect investment decisions.
Consequently, investors, banks, and institutions may make decisions based on misleading information.


Relationship with Market Manipulation
Wash trades are recognised as a form of market manipulation because they interfere with normal market forces.
Instead of allowing prices to be determined by genuine buyers and sellers, wash trades artificially affect:

• Supply;
• Demand;
• Trading volume;
• Market sentiment; and
• Price formation.

For this reason, wash trades are specifically identified in the Code of Conduct for Malaysia Wholesale Financial Markets as an example of prohibited conduct.


Comparison Between a Genuine Trade and a Wash Trade
Genuine Trade

• Involves an independent buyer and seller.
• Genuine transfer of ownership occurs.
• Legitimate commercial or investment purpose exists.
• Real market risk is assumed.
• Reflects actual market supply and demand.
• Produces genuine trading activity.
• Assists accurate price discovery.
• Lawful market conduct.

Wash Trade

• Same person or colluding parties effectively act as both buyer and seller.
• No genuine change in beneficial ownership.
• No legitimate commercial or investment purpose.
• Little or no real market risk assumed.
• Creates artificial supply and demand conditions.
• Produces false trading activity.
• Distorts price discovery.
• May constitute unlawful market manipulation.

Critical Analysis
Wash trades may appear legitimate because a purchase and sale technically occur. However, regulators and courts focus on the substance of the transaction rather than its form.
The critical question is whether the transaction has a genuine commercial purpose and whether beneficial ownership genuinely changes.
Modern financial markets make wash trades increasingly sophisticated. Traders may use multiple accounts, related companies, offshore entities, or coordinated trading arrangements to disguise the true nature of transactions.
Consequently, regulators such as Bank Negara Malaysia employ sophisticated surveillance systems to detect unusual trading patterns and identify potentially manipulative conduct.
The prohibition against wash trades is therefore essential to preserve:

• Market integrity;
• Investor confidence;
• Fair competition;
• Accurate price discovery; and
• Financial stability.

Without such prohibitions, market prices and trading volumes could become unreliable indicators of genuine economic activity.


Conclusion
A wash trade is a transaction in which a person directly or indirectly buys and sells the same financial instrument without any genuine commercial purpose or meaningful change in beneficial ownership.
Its purpose is generally to:

• Create artificial trading volume;
• Generate a false appearance of market activity;
• Mislead investors and market participants;
• Influence market prices; or
• Manipulate supply and demand.

Because wash trades create a false or misleading appearance of active dealing, they constitute a form of market manipulation and may expose the offender to criminal, civil, and administrative sanctions under the Financial Services Act 2013 and the Islamic Financial Services Act 2013. In Malaysia’s wholesale financial markets, genuine trading activity must always be distinguished from artificial transactions designed to mislead the market.

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Malaysian Banking Law – Spoofing
Definition
Spoofing is a form of market manipulation whereby a trader places bids or offers in the market with no genuine intention of executing the transaction. The trader’s real objective is to create a false impression of market demand, supply, liquidity, or price movement in order to influence the behaviour of other market participants.
After other traders react to the apparent demand or supply, the spoofer cancels the orders before they are executed.
Spoofing is specifically recognised as an example of market manipulation under the Code of Conduct for Malaysia Wholesale Financial Markets and falls within the prohibitions against creating a false or misleading appearance of active dealing under section 141 of the Financial Services Act 2013 (FSA 2013) and section 153 of the Islamic Financial Services Act 2013 (IFSA 2013).


How Spoofing Works
A spoofer typically:

1. Places a large buy order or sell order.
2. Has no genuine intention of completing the transaction.
3. Creates the appearance of strong demand or supply.
4. Causes other traders to react to the apparent market movement.
5. Cancels the original order before execution.
6. Profits from the resulting market reaction.

The deception lies in the fact that the displayed order is not genuine.


Simple Example
Scenario
A trader wants to buy a government bond at a lower price.
The trader places a very large sell order into the electronic trading system.
Other market participants observe the large sell order and believe:

• There is significant selling pressure;
• Prices are likely to fall;
• Demand is weakening.

As a result, some investors begin selling the bond.
The market price falls.
Before the large sell order is executed, the trader cancels it and purchases the bond at the now lower price.
The original order was never intended to be executed.
This conduct is known as spoofing.


Banking Example
Case Scenario
A treasury dealer at ABC Bank Berhad wishes to purchase a large amount of foreign currency at a favourable exchange rate.
The dealer enters multiple large sell orders into an electronic trading platform, creating the appearance that substantial quantities of the currency are about to be sold.
Other dealers respond by lowering their prices.
Before the orders can be matched and executed, the dealer cancels them.
The dealer then purchases the currency at the newly reduced market price.
An investigation later reveals that the dealer never intended to complete the original sell orders.
The dealer’s conduct constitutes spoofing and may amount to market manipulation under section 141 FSA 2013 and section 153 IFSA 2013.


Why Is Spoofing Harmful?
Spoofing distorts the market because it creates false signals regarding:
Supply
The market may wrongly believe that large quantities of a financial instrument are available for sale.
Demand
The market may wrongly believe that significant buying interest exists.
Liquidity
Participants may incorrectly assume there is more market liquidity than actually exists.
Price Discovery
Prices may move based on deceptive information rather than genuine market forces.
As a result, investors and institutions make decisions based on false market information.


Difference Between Genuine Trading and Spoofing
Genuine Trading

• Trader intends to execute the order.
• Commercial purpose exists.
• Order reflects genuine demand or supply.
• Market information is accurate.
• No intention to mislead other participants.
• Supports proper price discovery.

Spoofing

• Trader never intends to execute the order.
• Order is entered solely to influence the market.
• Creates artificial demand or supply.
• Generates false market signals.
• Intends to mislead other participants.
• Distorts price discovery.

Difference Between Wash Trade and Spoofing
Wash Trade

• Involves actual transactions being executed.
• Same person or colluding parties effectively act as buyer and seller.
• Creates artificial trading volume.
• Gives a false impression of market activity.
• Transaction is completed.

Spoofing

• Usually involves orders that are never executed.
• Trader places orders intending to cancel them.
• Creates artificial demand or supply.
• Gives a false impression of market interest.
• Order is normally cancelled before execution.

Key Distinction
Wash trade = fake transaction.
Spoofing = fake order.
A wash trade creates a false impression through an executed trade, whereas spoofing creates a false impression through a deceptive order that is usually cancelled before execution.


Application to Malaysian Banking Law
Under the Code of Conduct for Malaysia Wholesale Financial Markets, spoofing is specifically identified as prohibited conduct.
The Code describes spoofing as:
Bidding or offering with an intent to cancel the bid or offer before execution in order to mislead the market.
Such conduct creates a false or misleading appearance regarding:

• Market demand;
• Market supply;
• Market liquidity; and
• Market prices.

Consequently, spoofing may constitute market manipulation under:

• Section 141 Financial Services Act 2013; and
• Section 153 Islamic Financial Services Act 2013.

Critical Analysis
Spoofing has become increasingly prevalent in modern electronic markets because orders can be placed and cancelled within milliseconds using sophisticated trading systems.
Unlike traditional market manipulation, spoofing may not involve completed transactions, making detection more difficult. Regulators therefore focus on trading patterns, cancellation rates, timing of orders, and the trader’s intent.
The key legal issue is not whether the order was executed but whether the trader genuinely intended to execute it when it was entered.
If orders are repeatedly entered solely to influence market perception and then cancelled before execution, regulators may infer manipulative intent.
For this reason, regulators such as Bank Negara Malaysia employ advanced surveillance systems to monitor electronic trading activity and identify suspicious conduct.


Conclusion
Spoofing is a form of market manipulation in which a trader places bids or offers without any genuine intention of executing them and instead intends to cancel them after influencing the market.
Its purpose is generally to:

• Create artificial demand or supply;
• Mislead market participants;
• Influence market prices;
• Distort liquidity perceptions; and
• Generate trading advantages.

Unlike a wash trade, which involves an executed artificial transaction, spoofing involves a deceptive order that is usually cancelled before execution.
Because spoofing creates a false or misleading appearance of market activity, it is prohibited under the Financial Services Act 2013, the Islamic Financial Services Act 2013, and the Code of Conduct for Malaysia Wholesale Financial Markets, and may result in criminal, civil, or administrative sanctions.

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Malaysian Banking Law – Code of Conduct in the Wholesale Financial Market and Prohibited Conduct
Introduction
To strengthen consumer protection, market integrity, and confidence in the financial system, the Financial Services Act 2013 (FSA 2013) prohibits certain forms of improper business conduct. Section 124 of the FSA 2013 provides that financial institutions must not engage in prohibited business conduct as prescribed under Schedule 7 of the Act.
In furtherance of these objectives, Bank Negara Malaysia (BNM) issued the Code of Conduct for Malaysia Wholesale Financial Markets, which governs the conduct of participants operating in Malaysia’s wholesale financial markets. The Code applies to a wide range of market participants, including banks, investment banks, Islamic banks, development financial institutions, insurers, takaful operators, money brokers, operators of electronic trading or broking platforms, corporations, and investment institutions.
Part C of the Code highlights several serious forms of misconduct that are strictly prohibited under both the Financial Services Act 2013 and the Islamic Financial Services Act 2013 (IFSA 2013).


Definition of Wholesale Financial Market
A Wholesale Financial Market refers to a financial market where large-scale financial transactions are conducted between institutional participants rather than retail customers or members of the general public.
The market typically involves transactions among:

• Banks;
• Investment banks;
• Islamic banks;
• Development financial institutions;
• Insurance companies;
• Takaful operators;
• Pension funds;
• Asset management companies;
• Corporations;
• Government agencies; and
• Other institutional investors.

Transactions in the wholesale financial market generally involve substantial sums of money and include dealings in:

• Foreign exchange (FX);
• Money market instruments;
• Government securities;
• Corporate bonds;
• Sukuk;
• Interest rate products;
• Islamic financial instruments;
• Derivatives; and
• Other capital market products.

Unlike retail banking, where services are provided directly to individual customers, wholesale financial markets facilitate the movement of large amounts of funds between institutions and play a crucial role in maintaining liquidity, price discovery, and overall financial stability.
Because these markets significantly influence the economy and the financial system, participants are expected to adhere to the highest standards of professionalism, integrity, transparency, and ethical conduct.


Case Scenario
ABC Bank Berhad is actively involved in Malaysia’s wholesale financial market. A senior treasury dealer employed by the bank becomes aware that a large institutional client intends to purchase a substantial amount of government securities the following day.
Before the transaction takes place, the dealer secretly purchases similar securities for his personal account, anticipating that prices will rise once the institutional order is executed.
At the same time, the dealer circulates false information among market participants, claiming that the government is planning to issue a large volume of new securities, knowing that this information is untrue. The false rumour causes temporary market uncertainty and affects trading decisions.
In addition, the dealer executes several artificial transactions designed to create the appearance of active market demand for certain securities, thereby misleading other participants regarding the true market conditions.
Subsequently, Bank Negara Malaysia discovers the dealer’s activities during a market surveillance review.


Legal Principles
1. Code of Conduct for Malaysia Wholesale Financial Markets
The Code of Conduct establishes standards of professionalism, integrity, transparency, and ethical behaviour expected from all participants in the wholesale financial market.
The Code aims to ensure that market participants:

• Act honestly and fairly;
• Maintain market integrity;
• Avoid conflicts of interest;
• Conduct transactions in a transparent manner;
• Protect market confidence;
• Promote fair dealing; and
• Comply with applicable laws and regulatory requirements.

Failure to comply with these standards may expose both the individual and the financial institution to regulatory action.


2. Prohibited Conduct
Part C of the Code identifies three major categories of prohibited conduct under the FSA 2013 and IFSA 2013.
(A) Market Manipulation
Market manipulation occurs when a person deliberately interferes with the normal operation of a financial market to create a false or misleading impression regarding:

• Market activity;
• Supply and demand;
• Trading volume;
• Market prices; or
• The true state of the market.

Examples include:

• Artificial trading activities;
• Wash trades;
• Creating false market demand;
• Manipulating benchmark rates;
• Manipulating prices of financial instruments; or
• Conduct intended to distort market prices.

Such conduct undermines market efficiency and investor confidence.


(B) Misinformation and Rumour
Misinformation and rumour involve the dissemination of false, misleading, inaccurate, or deceptive information that may influence market behaviour.
This may include:

• Spreading false market reports;
• Publishing inaccurate financial information;
• Circulating unverified rumours;
• Making misleading statements regarding financial instruments;
• Disseminating false information concerning financial institutions; or
• Creating market panic through fabricated information.

The prohibition seeks to ensure that market participants make decisions based on accurate and reliable information rather than fabricated or misleading reports.


(C) Insider Dealing
Insider dealing occurs when a person trades or procures trading based on confidential, non-public, price-sensitive information obtained through their position, employment, or relationship.
Such information may relate to:

• Future transactions;
• Corporate actions;
• Government decisions;
• Financial results;
• Market-sensitive developments;
• Merger activities; or
• Significant investment decisions.

The prohibition aims to ensure fairness by preventing individuals from gaining an unfair advantage over other market participants.


Application to the Case Scenario
In the present case, the treasury dealer committed multiple prohibited acts.
First, the dealer used confidential information concerning the institutional client’s planned purchase of government securities to conduct personal trading before the information became public. This constitutes insider dealing because the dealer exploited non-public, price-sensitive information for personal gain.
Second, the dealer intentionally spread false information regarding a purported government securities issuance. This amounts to misinformation and rumour, as the information was knowingly false and capable of influencing market participants’ decisions.
Third, the dealer carried out artificial transactions intended to create a misleading appearance of market demand. Such conduct constitutes market manipulation, as it distorted the true state of the market and misled other participants.
Accordingly, the dealer breached the Code of Conduct and violated the prohibitions contained in the FSA 2013 and IFSA 2013.


Solution to the Case Scenario
ABC Bank Berhad’s treasury dealer engaged in three distinct forms of prohibited conduct within the wholesale financial market.
The dealer committed insider dealing by purchasing securities using confidential information regarding the institutional client’s forthcoming transaction before the information became publicly available.
The dealer committed misinformation and rumour offences by deliberately spreading false information concerning an alleged government securities issuance in order to influence market sentiment.
The dealer also committed market manipulation by carrying out artificial trades designed to create a false impression of demand and market activity.
These actions undermine market integrity, distort price discovery, and create an unfair trading environment for other participants.
Consequently, Bank Negara Malaysia may initiate:

• Criminal proceedings;
• Civil enforcement actions; and/or
• Administrative enforcement measures

against the dealer.
Depending on the circumstances, enforcement action may also be taken against ABC Bank Berhad if deficiencies in governance, supervision, compliance controls, risk management systems, or internal monitoring contributed to the misconduct.


Practical Application
The prohibitions on market manipulation, misinformation, and insider dealing are highly relevant to the daily operations of financial institutions, particularly within:

• Treasury departments;
• Foreign exchange trading desks;
• Money market operations;
• Government securities trading;
• Bond and sukuk trading activities;
• Investment banking divisions;
• Corporate finance departments;
• Islamic capital market operations; and
• Financial market dealing rooms.

To ensure compliance, banks should:

• Establish comprehensive compliance frameworks;
• Maintain effective information barriers (“Chinese Walls”);
• Monitor employee trading activities;
• Conduct regular ethics and compliance training;
• Implement whistleblowing mechanisms;
• Perform transaction surveillance and market monitoring;
• Maintain proper record-keeping systems; and
• Promptly report suspicious activities to regulators where required.

Strong internal controls protect customers, institutions, and the integrity of Malaysia’s financial markets.


Critical Analysis
The prohibition of market manipulation, misinformation, and insider dealing reflects the regulatory objective of maintaining a fair, orderly, transparent, and efficient financial market.
Wholesale financial markets form the backbone of the financial system because they facilitate the movement of large volumes of funds between institutions. Any misconduct within these markets can have significant consequences for financial stability, investor confidence, and economic growth.
Without these prohibitions, individuals possessing confidential information could exploit their positions for personal gain, while false information could distort market prices and influence investment decisions unfairly. Market manipulation can further undermine confidence by creating artificial market conditions that do not reflect genuine supply and demand.
The Code of Conduct complements the statutory provisions of the FSA 2013 and IFSA 2013. While legislation establishes legal obligations and penalties, the Code provides practical guidance on the standards of behaviour expected from market participants.
Nevertheless, enforcement remains challenging due to increasingly sophisticated trading strategies, technological developments, algorithmic trading systems, and cross-border financial transactions. Effective surveillance technology, strong compliance cultures, and active regulatory oversight are therefore essential to detect and prevent misconduct.
The combination of statutory regulation, ethical standards, and supervisory enforcement is necessary to preserve the integrity and stability of Malaysia’s wholesale financial markets.


Conclusion
Section 124 of the Financial Services Act 2013, together with the Code of Conduct for Malaysia Wholesale Financial Markets issued by Bank Negara Malaysia, seeks to ensure that participants in Malaysia’s wholesale financial markets conduct themselves with honesty, integrity, professionalism, and transparency.
A wholesale financial market is a market where large-scale financial transactions are conducted between institutional participants such as banks, financial institutions, corporations, insurers, and investment entities rather than individual retail customers.
Three major forms of prohibited conduct are specifically identified:

1. Market Manipulation;
2. Misinformation and Rumour; and
3. Insider Dealing.

Any person who engages in such conduct may be subject to criminal, civil, or administrative action. These prohibitions are fundamental to maintaining fair and transparent markets, protecting investors and consumers, preserving financial stability, and sustaining public confidence in Malaysia’s financial system.

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Malaysian Banking Law – Offences Relating to Entries in Documents (Section 248 Financial Services Act 2013)
Introduction
Apart from maintaining customer confidentiality and complying with regulatory requirements, banking institutions must ensure that all records, books, documents, and reports are accurate, complete, and truthful. The integrity of banking records is essential because regulators, customers, auditors, and financial institutions rely on these documents to assess the financial condition and operations of a bank.
To safeguard the reliability of such records, section 248 of the Financial Services Act 2013 (FSA 2013) creates criminal offences relating to false entries, omissions, alterations, concealment, destruction, or forgery of banking documents and records. The provision also criminalises attempts to circumvent the requirements of the FSA 2013 through manipulation or tampering of documents.


Purpose of Section 248 FSA 2013
Section 248 seeks to preserve the integrity and accuracy of records relating to:

• The business and affairs of financial institutions;
• Banking transactions;
• Financial condition and operations of institutions;
• Assets and liabilities;
• Customer accounts and records; and
• Documents relating to authorised persons, registered persons, and operators of designated payment systems.

The provision aims to ensure that information maintained by financial institutions remains reliable and free from fraud, manipulation, or misrepresentation.


Prohibited Conduct Under Section 248(1)
Section 248(1) prohibits any person from:
(a) Making False Entries
A person must not create or cause another person to create false information in any book, record, report, statement, slip, or document relating to a financial institution’s operations or accounts.
Examples:

• Recording fictitious deposits or withdrawals.
• Entering incorrect loan repayment information.
• Creating false accounting records to conceal losses.
• Recording transactions that never occurred.

(b) Omitting Required Entries
It is also an offence to intentionally fail to record information that ought to be entered into banking records.
Examples:

• Failing to record a customer’s outstanding liability.
• Omitting details of non-performing loans.
• Excluding material transactions from official records.
• Concealing financial losses by not entering them into the accounting system.

(c) Altering, Extracting, Concealing, or Destroying Entries
The law further prohibits any person from altering, removing, concealing, or destroying information contained in banking records.
Examples:

• Changing figures in loan documents.
• Removing evidence of unauthorised transactions.
• Concealing entries showing customer defaults.
• Destroying records to prevent regulatory detection.

Evasion of the Financial Services Act 2013
Section 248(2) extends beyond entries in records and prohibits any attempt to evade the FSA 2013 by:

• Altering documents;
• Forging documents;
• Destroying documents;
• Mutilating documents;
• Defacing documents;
• Concealing documents; or
• Removing documents.

This provision targets conduct designed to obstruct regulators, auditors, investigators, or law enforcement authorities from obtaining accurate information.


Penalties
A person who contravenes section 248(1) or section 248(2) commits a criminal offence.
Upon conviction, the offender may be punished with:

• Imprisonment for a term not exceeding eight years; or
• A fine not exceeding RM25 million; or
• Both imprisonment and a fine.

The severe penalties demonstrate Parliament’s intention to deter fraud and manipulation within the banking industry.


Importance of Accurate Banking Records
Accurate record-keeping is fundamental to the banking system because:

1. Regulators depend on accurate records for supervision and enforcement.
2. Auditors rely on records to verify the financial position of institutions.
3. Customers expect their accounts and transactions to be correctly recorded.
4. Investors and stakeholders require truthful information regarding the institution’s financial health.
5. Courts frequently rely on banking records as evidence in legal proceedings.

To preserve public confidence in the financial system, banking records must remain complete, truthful, and untampered with.


Practical Applications During the Banker–Customer Relationship
Employees of financial institutions must avoid manipulating documents or records at any stage of the banker-customer relationship.
Examples of prohibited conduct include:

• Altering customer documents to secure approval of a financing facility.
• Modifying information to facilitate the completion of a sale or transaction.
• Submitting forged supporting documents.
• Manipulating marketing materials to exaggerate performance.
• Altering financial statistics or operational reports.
• Concealing information that should be disclosed to management or regulators.

Even where the intention is to assist a customer or achieve business targets, such conduct may constitute a criminal offence under section 248.


Scope of the Provision
An important feature of section 248 is its broad application.
The section states that “No person shall” engage in the prohibited conduct. Consequently, liability is not limited to:

• Directors;
• Officers; or
• Employees of financial institutions.

The provision may also apply to:

• Customers;
• Borrowers;
• Consultants;
• Agents;
• Third parties; and
• External fraudsters.

Accordingly, anyone who submits forged or altered documents to a financial institution may be prosecuted under this provision.
Examples include:

• Altered bank statements.
• Forged salary slips.
• Fabricated financial statements.
• Manipulated credit reports.
• Falsified supporting documents for loan applications.

Case Law: Hock Hua Bank (Sabah) Bhd v Lam Tat Ming & Ors
Facts
A current account officer employed by the bank made false entries in vouchers by debiting amounts to a suspense account. His actions constituted both falsification of banking records and dishonest conduct against the bank.
As a result, criminal proceedings were initiated against him.


Decision
The officer was found guilty of:

1. An offence under section 105 of the Banking and Financial Institutions Act 1989 (BAFIA), the predecessor provision to section 248 FSA 2013; and
2. Section 420 of the Penal Code for cheating.

Punishment
The offender received:

• A term of imprisonment;
• A monetary fine; and
• Two strokes of whipping.

Critical Analysis
Section 248 plays a crucial role in maintaining trust and confidence in Malaysia’s banking system. Banking operations depend heavily on documentary records, and any falsification may affect customers, regulators, shareholders, and the public at large.
The broad wording of the provision is particularly significant because it captures not only internal misconduct by bank employees but also external fraud committed by customers and third parties. This wider scope enhances the effectiveness of the law in combating financial crime.
The severe penalties imposed under the section further reflect the seriousness with which the law treats document manipulation and record falsification. In modern banking, where lending decisions, regulatory compliance, risk management, and customer transactions depend on documentary evidence, inaccurate records can undermine the stability and integrity of the entire financial system.


Key Takeaway
Section 248 FSA 2013 criminalises any falsification, omission, alteration, concealment, destruction, or forgery of banking records and related documents. The provision applies broadly to any person, including bank employees and external parties. Violations may result in imprisonment of up to eight years, a fine of up to RM25 million, or both. The objective is to ensure the accuracy, reliability, and integrity of banking records, which are essential to maintaining confidence in Malaysia’s financial system.

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Malaysian Banking Law – Banking Secrecy, Confidentiality, Permitted Disclosures and Personal Data Protection
Introduction
Banking secrecy is one of the most important obligations imposed upon banks and financial institutions. It requires banks to keep confidential all information relating to their customers’ accounts and affairs.
The duty serves several purposes:

• Protecting customer privacy;
• Preserving confidence in the banking system;
• Protecting sensitive financial and commercial information;
• Encouraging customers to deal openly with banks; and
• Ensuring disclosure occurs only where authorised by law.

In Malaysia, banking secrecy is governed primarily by:

• Sections 132, 133 and 134 Financial Services Act 2013 (FSA 2013);
• Sections 145 and 146 Islamic Financial Services Act 2013 (IFSA 2013);
• Personal Data Protection Act 2010 (PDPA);
• Contract law;
• Equity; and
• Tort law.

The general rule is confidentiality. Disclosure is the exception.


PART I: BANKING SECRECY UNDER THE FINANCIAL SERVICES ACT 2013
Section 132 FSA 2013 – Restriction on Inquiry into Customer Affairs
General Rule
Section 132 protects customers from arbitrary investigations into their banking affairs.
Neither:

• The Minister of Finance; nor
• Bank Negara Malaysia (BNM)

may ordinarily inquire specifically into the affairs or account of a particular customer.
The purpose is to safeguard customer privacy and confidence in the banking system.


Exception
BNM may investigate customer affairs where necessary for exercising its powers under:

• The Financial Services Act 2013;
• The Islamic Financial Services Act 2013; or
• The Central Bank of Malaysia Act 2009.

Thus, confidentiality cannot be used to obstruct legitimate regulatory investigations.


Section 133 FSA 2013 – Duty of Secrecy
General Rule
Section 133 imposes a statutory duty of confidentiality on:

• Financial institutions;
• Directors;
• Officers;
• Employees;
• Agents; and
• Former directors, officers and agents.

These persons must not disclose any information relating to a customer’s affairs or account.
The duty survives termination of employment.


Scope of Protection
The protection extends to:

• Savings accounts;
• Current accounts;
• Fixed deposits;
• Financing facilities;
• Investment accounts;
• Credit information;
• Customer identities;
• Financial standing;
• Transaction records; and
• Any information acquired through the banker-customer relationship.

Exceptions under Section 133(2)
The secrecy obligation does not apply where the information:
(a) Is disclosed to BNM
For the purpose of exercising statutory powers and functions.
(b) Is disclosed in summary form
Provided no particular customer can be identified.
(c) Is already public information
Where the information has already been lawfully made available to the public from a source other than the financial institution.


Further Disclosure Prohibited
A person who knowingly receives information disclosed in breach of section 133 cannot further disclose it.


Penalty
Contravention may result in:

• Imprisonment up to 5 years;
• Fine up to RM10 million; or
• Both.

Section 134 FSA 2013 – Permitted Disclosures
Section 134 provides the statutory exceptions to confidentiality.
A financial institution may disclose customer information:

• Under Schedule 11; or
• With written approval from BNM.

The recipient of such information must not further disclose it.
The court may also order proceedings to be held in camera and prohibit publication of information identifying the parties.


PART II: BANKING SECRECY UNDER THE ISLAMIC FINANCIAL SERVICES ACT 2013
The Islamic Financial Services Act 2013 contains provisions almost identical to those found in the Financial Services Act 2013.
The objective is likewise to preserve customer confidentiality within Islamic financial institutions.


Section 145 IFSA 2013 – Secrecy
General Rule
Section 145 prohibits disclosure of information relating to the affairs or account of a customer of an Islamic financial institution.
The duty applies to:

• The Islamic financial institution;
• Directors;
• Officers;
• Agents; and
• Former directors, officers and agents.

Exceptions under Section 145(2)
The secrecy obligation does not apply where information:
(a) Is disclosed to BNM
For purposes connected with the exercise of BNM’s statutory powers.
(b) Is disclosed in summary or aggregated form
Provided no particular customer can be identified.
(c) Has already entered the public domain
Through lawful publication from another source.


Further Disclosure
A person who knowingly receives information disclosed in breach of section 145 cannot further disclose it.


Penalty
Contravention may result in:

• Imprisonment up to 5 years;
• Fine up to RM10 million; or
• Both.

Section 146 IFSA 2013 – Permitted Disclosures
An Islamic financial institution may disclose customer information:

• In the circumstances listed in Schedule 11; or
• With written approval from BNM.

BNM may impose conditions upon disclosure.
Recipients are prohibited from making further disclosure.
The court may:

• Hold proceedings in camera;
• Restrict access to documents;
• Prevent publication of identifying information; and
• Make confidentiality orders.

Schedule 11 IFSA 2013 – Permitted Disclosures
The Schedule operates through two columns:
First Column
The purpose or circumstance under which disclosure is permitted.
Second Column
The persons to whom disclosure may be made.


1. Customer’s Written Consent
First Column
Documents or information disclosed with written permission from:

• The customer;
• Executor;
• Administrator; or
• Legal personal representative.

Second Column
Disclosure may be made to:

• Any person authorised by the customer;
• Executor;
• Administrator; or
• Legal personal representative.

2. Deceased Customer’s Estate
First Column
Disclosure connected with:

• Faraid certificate applications;
• Probate applications;
• Letters of administration; or
• Distribution orders under the Small Estates (Distribution) Act 1955.

Second Column
Disclosure may be made to:
Any person whom the Islamic financial institution genuinely believes is entitled to obtain:

• The faraid certificate;
• Grant of probate;
• Letters of administration; or
• Distribution order.

3. Bankruptcy, Winding-Up or Dissolution
First Column
Where the customer:

• Has been declared bankrupt;
• Is being wound up; or
• Has been dissolved,

whether in Malaysia or elsewhere.
Second Column
Disclosure may be made to:
All persons to whom disclosure is necessary in connection with:

• Bankruptcy;
• Winding-up; or
• Dissolution proceedings.

4. Civil or Criminal Proceedings
First Column
Proceedings involving the Islamic financial institution and:

• Its customer;
• Surety;
• Guarantor;
• Competing claimants to money in the account; or
• Persons claiming rights over property in which the institution has an interest.

Second Column
Disclosure may be made to:
All persons to whom disclosure is necessary for the purpose of those proceedings.


5. Garnishee Orders
First Column
Compliance with a garnishee order attaching money in a customer’s account.
Second Column
Disclosure may be made to:
All persons to whom disclosure is required under the garnishee order.


6. Court Orders
First Column
Compliance with an order made by a court not lower than the Sessions Court.
Second Column
Disclosure may be made to:
All persons to whom disclosure is required under the court order.


7. Requests by Enforcement Agencies
First Column
Compliance with requests or orders made by enforcement agencies under written law for investigation or prosecution purposes.
Second Column
Disclosure may be made to:

• Investigating officers authorised under written law;
• Prosecuting officers; or
• The court.

8. Functions of Malaysia Deposit Insurance Corporation (PIDM)
First Column
Performance of PIDM’s statutory functions.
Second Column
Disclosure may be made to:

• Directors;
• Officers of PIDM; or
• Persons authorised by PIDM to receive the information.

9. Approved Trade Repository Functions
First Column
Disclosure by a licensed Islamic bank for the performance of approved trade repository functions under the Capital Markets and Services Act 2007.
Second Column
Disclosure may be made to:
Officers of the approved trade repository authorised to receive the information.


10. Inland Revenue Board (IRB)
First Column
Information required by the Inland Revenue Board under section 81 of the Income Tax Act 1967 for tax information exchange purposes.
Second Column
Disclosure may be made to:
Officers of the Inland Revenue Board authorised to receive the information.


11. Credit Reporting Agencies
First Column
Disclosure of customer credit information for credit reporting business.
Second Column
Disclosure may be made to:
Officers of registered credit reporting agencies authorised to receive the information.


12. Supervisory Authorities Outside Malaysia
First Column
Performance of supervisory functions by foreign authorities exercising functions similar to BNM.
Second Column
Disclosure may be made to:
Authorised officers of the relevant supervisory authority.


13. Centralised Functions within a Financial Group
First Column
Conduct of centralised functions including:

• Audit;
• Risk management;
• Finance;
• Information technology; and
• Other centralised functions.

Second Column
Disclosure may be made to:

• Head office;
• Holding company;
• Persons designated by the head office; or
• Persons designated by the holding company to perform those functions.

14. Due Diligence Exercises
First Column
Board-approved due diligence exercises relating to:

• Mergers and acquisitions;
• Capital raising exercises; or
• Sale of assets, business or part of the business.

Second Column
Disclosure may be made to:
Any person participating in or involved in the due diligence exercise.


15. Outsourced Functions
First Column
Performance of outsourced functions of the Islamic financial institution.
Second Column
Disclosure may be made to:
Persons engaged by the institution to perform the outsourced function.


16. Consultants and Adjusters
First Column
Disclosure to consultants or adjusters engaged by the Islamic financial institution.
Second Column
Disclosure may be made to:
The consultant or adjuster engaged by the institution.


17. Suspicion of Criminal Activity
First Column
Where the Islamic financial institution has reason to suspect that an offence under any written law has been, is being or may be committed.
Second Column
Disclosure may be made to:

• Officers of another Islamic financial institution; or
• Relevant associations of Islamic financial institutions authorised to receive the information.

Key Difference Between Sections 145–146 IFSA and Sections 133–134 FSA
In substance, both regimes provide nearly identical protection.
Both:

• Impose a strict duty of secrecy;
• Cover all customer affairs and account information;
• Continue after employment ends;
• Permit disclosures only under specified exceptions;
• Provide criminal sanctions of up to RM10 million fine and/or 5 years imprisonment.

The objective of both statutes is the same:
To preserve public confidence in the financial system by ensuring that customer information remains confidential unless disclosure is authorised by law.


Summary
Under Malaysian Banking Law, banking secrecy applies to both conventional and Islamic financial institutions. Sections 133–134 FSA 2013 and sections 145–146 IFSA 2013 establish comprehensive confidentiality regimes. Customer information remains protected indefinitely and may only be disclosed in carefully defined circumstances. Schedule 11 IFSA 2013 specifically links each permitted purpose of disclosure (First Column) with the persons entitled to receive the information (Second Column), ensuring that disclosure remains limited, controlled and consistent with the objective of protecting customer confidentiality.

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