KUALA LUMPUR (March 28): The Securities Commission Malaysia (SC) has found that recognised market operators (RMOs) of digital asset exchanges (DAXs) have an adequate understanding of their anti-money laundering (AML) and countering financing of terrorism (CFT) risk and technology and cyber risk obligations prescribed under the various SC guidelines and are broadly compliant with the obligations stipulated in the guidelines.

However, it said board and senior management are required to assume greater accountability on AML policies and procedures, technology systems management as well as to ensure consistency of practice with the policies and procedures that are in place, according to its 2021 annual report which was released on Monday.

It also highlighted the need to strengthen documentation and record-keeping to improve the effectiveness of compliance functions, and ensure adequate access controls in the database and digital asset wallets.

According to the commission, it had adopted a risk-based approach to the oversight of RMOs.

Given the risks associated with digital asset, money laundering, terrorism and proliferation financing as well as risks of cyber security threats and systems disruption, the SC said Monday it had completed the thematic regulatory assessment of three DAXs in August 2021.

“It is imperative for DAXs to ensure that relevant processes, procedures, practices, and systems are in place to drive a well-functioning market infrastructure for the integrity and reputation of the Malaysian capital market,” it said.

Read more stories from the SC Annual Report 2021 here.