Malaysia – BNM’s Exposure Draft On Recovery Planning.

An exposure draft was issued by BNM on recovery planning which are applicable to the following categories of persons:

1. a)  banks licensed under the Financial Services Act 2013;

2. b)  investment banks licensed under the Financial Services Act 2013;

3. c)  Islamic banks licensed under the Islamic Financial Services Act 2013;

4. d)  financial holding companies of entities set out in a) to c) above;

5. e)  all its financial and non-financial subsidiaries (as defined in the exposure draft), including insurance and/or takaful subsidiaries, (collectively, the FIs).

The exposure draft sets out the key principles, requirements and BNM’s expectations on the development and maintenance of recovery plans for FIs. The exposure draft seeks to put in place an effective and efficient process to enhance supervisability, recoverability and resolvability of financial institutions, by incorporating essential elements of 11 of the Key Attributes into the domestic regulatory, supervisory and resolution regimes.

FIs are expected to identify and plan for the execution of a suite of recovery options to restore long-term viability under a range of idiosyncratic and system-wide stress events without taking into account the possibility of policy intervention by authorities, or access to any exceptional financial support from public funds.