[OR] [KIB] [E3] [CBS] [1] [MD] Map Dependency

CBS-1 Securities Broking & Trade Execution

Introduction

Mapping interconnections and interdependencies is a core requirement under Operational Resilience as articulated in the 2025 BNM Discussion Paper, which emphasises that financial institutions must understand how people, processes, technology, facilities, data, and third parties collectively enable the delivery of a Critical Business Service (CBS).

For Kenanga Investment Bank, CBS-1 Securities Broking & Trade Execution is fundamental to market confidence, client trust, and regulatory compliance.

Any disruption to this service—whether arising from system outages, third-party failures, or human resource constraints—could lead to client detriment, market disorder, or regulatory breaches.

This chapter applies the [OR] [P2-S2] Map Dependency principle to systematically identify and document the dependencies supporting each Sub-CBS within the securities trading lifecycle.

The objective is to provide Kenanga with end-to-end service transparency, enabling the identification of single points of failure, concentration risk, and recovery constraints, in line with BNM’s expectation that institutions can remain within their impact tolerances during severe but plausible disruptions.

Table P2: Map Dependency for CBS-1

Sub-CBS Code	Sub-CBS	Dependency Type	Dependency Detail (What / Who is involved)	Connectivity (How it connects / interacts)
1.1	Client Onboarding & Order Intake	People	Relationship Managers, Dealers, Client Service Officers	Capture client orders and trading instructions via branches, dealers, and digital channels
		Process	KYC, AML/CFT, Client Suitability & Account Activation	Ensures only authorised and eligible clients can place trades
		Technology	Online Trading Platform, CRM, Core Client Database	Interfaces with the order management system (OMS) for order intake
		Third Party	e-KYC vendors, identity verification services	External validation of client identity and documentation
1.2	Order Validation & Pre-Trade Checks	People	Compliance Officers, Risk Management Team	Oversight of trading limits and regulatory controls
		Process	Pre-trade risk checks, credit limits, and margin validation	Prevents unauthorised or excessive risk exposure
		Technology	OMS, Risk Engine, Margin Management System	Automated validation before orders proceed to execution
		Third Party	Market data providers	Provide real-time pricing and reference data
1.3	Order Routing & Trade Execution	People	Dealers, Trading Desk Supervisors	Manual intervention for large or complex trades
		Process	Order routing logic, best execution policy	Routes orders to appropriate exchanges or counterparties
		Technology	Trading Engine, Exchange Connectivity Gateways	Direct connectivity to Bursa Malaysia and other venues
		Third Party	Bursa Malaysia, brokers, liquidity providers	External execution venues are critical to service delivery
1.4	Trade Capture & Enrichment	People	Trade Operations Analysts	Validate the completeness of executed trades
		Process	Trade booking, enrichment with fees and identifiers	Prepares trades for downstream processing
		Technology	Trade Capture System, Reference Data Systems	Feeds data into clearing and settlement systems
		Third Party	Reference data vendors	Instrument codes and corporate action data
1.5	Trade Validation & Verification	People	Middle Office Operations	Dual control and verification of trade accuracy
		Process	Trade matching, exception checks	Ensures the integrity of executed trade records
		Technology	Trade Matching System	Matches internal records against execution reports
		Third Party	Counterparties	Confirmation of trade details
1.6	Trade Confirmation & Affirmation	People	Operations & Client Service Teams	Client communication and issue resolution
		Process	Trade confirmation issuance, affirmation workflows	Confirms trade details with clients and counterparties
		Technology	Confirmation System, Secure Messaging	Automated delivery of confirmations
		Third Party	Messaging platforms (e.g., SWIFT-like services)	Secure transmission of confirmations
1.7	Trade Settlement Instruction & Clearing	People	Settlement Officers, Treasury Operations	Manage settlement readiness and funding
		Process	Settlement instruction generation, clearing workflows	Initiates settlement with clearing houses
		Technology	Clearing & Settlement System, Core Banking Interface	Links trading activity to cash and securities accounts
		Third Party	Bursa Malaysia Securities Clearing, custodian banks	External clearing and settlement execution
1.8	Post-Trade Reconciliation & Exception Handling	People	Reconciliation Analysts	Investigate breaks and failed trades
		Process	Cash & securities reconciliation, break management	Identifies discrepancies impacting client outcomes
		Technology	Reconciliation Tools, Data Warehouses	Compare internal and external records
		Third Party	Custodians, clearing houses	Provide settlement and position statements
1.9	Trade Reporting & Regulatory Compliance	People	Compliance Officers, Regulatory Reporting Team	Oversight of reporting accuracy and timeliness
		Process	Regulatory reporting, audit trails	Meets BNM, SC Malaysia, and Bursa requirements
		Technology	Regulatory Reporting Systems, Data Analytics Tools	Extracts and submits reportable trade data
		Third Party	Regulators, approved reporting utilities	External recipients of trade reports
1.10	Client Settlement & Confirmation Delivery	People	Client Services, Finance Operations	Client enquiries and settlement issue handling
		Process	Client billing, settlement confirmation	Ensures clients receive final settlement outcomes
		Technology	Client Portal, Notification Systems	Delivers settlement statements and confirmations
		Third Party	Payment service providers, banks	Cash movement and settlement finality

The dependency mapping for CBS-1 Securities Broking & Trade Execution demonstrates that service continuity at Kenanga Investment Bank relies on a complex web of people, processes, technology, and third-party relationships.

Consistent with the 2025 BNM Discussion Paper on Operational Resilience, this mapping enables Kenanga to move beyond silo-based risk management and toward an end-to-end service view, highlighting where disruptions could propagate and result in client harm or market impact.

By maintaining and regularly updating this dependency map, Kenanga can identify single points of failure, assess third-party concentration risk, design effective substitution strategies, and test plausible disruption scenarios.

This directly supports BNM’s expectation that financial institutions not only recover from disruptions but also continue to deliver critical services within defined impact tolerances, thereby reinforcing market confidence and regulatory trust.

Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey
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CBS-1 Securities Broking & Trade Execution
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Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey

[OR] [KIB] [E3] [CBS] [1] [MD] Map Dependency

Operational Resilience Certified Planner-Specialist-Expert

CBS-1 Securities Broking & Trade Execution

Introduction

Table P2: Map Dependency for CBS-1

Comments:

Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey

[OR] [KIB] [E3] [CBS] [1] [MD] Map Dependency

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Operational Resilience Certified Planner-Specialist-Expert

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Introduction

Table P2: Map Dependency for CBS-1

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CBS-1 Securities Broking & Trade Execution