Good internal governance and due diligence, supported by robust internal surveillance and reporting mechanisms; and 5. Compliance to prevailing rules, regulations and market codes while extending full cooperation to the authorities. The Principles should be universally applied, internalised and practiced by all parties that transact in the Malaysian financial market. These Principles must be demonstrated consistently in the daily conduct of market participants. Outcomes of the Adherence to the Principles will result in a well-functioning market The Principles are intended to result in a fair and effective financial market that efficiently intermediates the funding needs of the economy and resilient in the face of shocks. One particular aspect of the Principles is on the adherence to rules and regulations, a critical pillar of financial stability, and a Code of Conduct expanded to explicitly prohibit transactions in unauthorised markets. This includes, in particular, the NDF market. These Principles ought to result in three key outcomes: 1. Firstly, balanced perspectives when formulating policy and assessing market development. Such balance is needed between growth and stability, whereby growth of the financial market must be consistent with economic fundamentals. We have seen in many instances how the size of the financial market can be disconnected, and has grown too large for the real economy. Most of the activities in these outsized markets do not contribute to sustainable growth and consist mainly of speculative activities.

More evidently in recent times, cases of market manipulation and illegal fixing of interest rate and foreign exchange benchmarks have surfaced globally. These cases were only possible because of collusion and have collectively undermined the trust, integrity and confidence in the global financial market. The consequences are dire. As the saying goes, ‘trust takes years to build, seconds to break, and forever to repair’. One significant example of such far-reaching incidents that undermined trust, was the manipulation of the LIBOR benchmark, a benchmark rate used to price a market estimated at USD450 trillion. Ineffective due diligence in the case of a rogue trader of a French bank and the ‘London Whale’ incident has also tarnished the credibility of some international institutions. Closer to home, two Australian banks were charged for manipulating the NDF ringgit fixing rate in Singapore. For the Malaysian market, we have recently introduced the Principles for a Fair and Effective Financial Market (Principles) on 13 April 2017 as part of our market development strategy to uphold and maintain the trust, integrity and confidence. These principles represent the universal overarching ideals for a fair and effective financial market. It complements the rules-based guidelines and regulations, including the recently revised Code of Conduct. I wish to highlight these principles; 1. Professionalism and integrity, through universal adoption of best market practices; 2. Full transparency and accountability, in all aspects of market participation; 4/6  BIS central bankers' speeches  3. A competitive environment that is free from collusive, fraudulent and manipulative activities; 4.