KUALA LUMPUR: Bank Negara Malaysia has “strongly” censured and slapped a RM1.4 million administrative penalty against an unnamed financial institution for failing to promptly notify it of a significant audit finding about its dealers’ misconduct in the fixing of the dollar-ringgit exchange rate.

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

These would be complemented by periodic compliance and audit reviews, it added.

The financial institution had paid the penalty and given its full commitment to rectify the shortcomings and prevent recurrence of such breaches, said the central bank.

The action comes amid efforts by Bank Negara to curb offshore trade of the ringgit and stem the fall of the currency.

Last month, two Australian banks — Macquarie Group and Australia and New Zealand Banking Group — offered to pay fines for “cartel conduct” when trading ringgit foreign exchange contracts out of Singapore in 2011.

The two banks said they offered to pay the fines after the anti-trust agency started court proceedings.

Bank Negara’s efforts to curb speculation come as rising bets for higher United States interest rates following Donald Trump’s election victory erode the appeal of developing nations’ assets.

Bank Negara reminded all financial institutions that money and foreign exchange market manipulation activities were prohibited under the Financial Services Act 2013 (FSA).

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

Bank Negara warned that it would not hesitate to take serious enforcement actions on any party that breaches the law.