2 July, 2019
Proposed Consumer Credit Law
The local media has reported that Bank Negara Malaysia is working with a number of ministries, namely, the Ministry of Domestic Trade and Consumer Affairs, the Ministry of Housing and Local Government and the Ministry of Entrepreneur Development to introduce a new Act, namely, the Consumer Credit Act.
Governor Datuk Nor Shamsiah Mohd Yunus, the Governor of Bank Negara Malaysia, said that discussions are at an advanced stage and hopes that the bill will be tabled in 2020.
The Governor also added that the Consumer Credit Act is intended to, among others:
- promote a healthy consumer credit market across the board, by providing consumers equal treatment and protection irrespective of who they borrow from; and
- supplement the Bank Negara Malaysia’s Responsible Financing guidelines which it has issued not only to banks but also to cooperatives through the Cooperative Commission.
Policy Document on Shareholder Suitability for Approved Persons
Bank Negara Malaysia ("BNM") issued a policy document on Shareholder Suitability for Approved Persons ("PD") which took effect on 3 June 2019.
The PD applies to a shareholder who holds an aggregate interest in shares (as defined in Schedule 3 to the Financial Services Act 2013 and the Islamic Financial Services Act 2013, respectively) of 5% or more in any of the following category of approved persons:
- approved insurance brokers;
- approved takaful brokers;
- approved money brokers;
- approved financial advisers; and
- approved Islamic financial advisers.
The PD sets out, among others:
- the requirement for an aquirer to notify Bank Negara Malaysia in writing within seven days after an agreement or arrangement is entered into to acquire an interest in shares in an approved person, along with information and document as prescribed in the Appendix to the PD.
- the application procedures for an acquisition of interest in shares of an approved person where such acquisition results in a change of control (as defined in the FSA and IFSA, respectively).
- the shareholder suitability requirements that must be complied with, at all times, by shareholders of an approved person.
Exposure Draft on Framework for Electronic Trading Platforms
BNM had, on 14 June 2019, issued an exposure draft which sets out its requirements and expectations on electronic trading platforms offered by the following categories of persons:
- money brokers approved to operate electronic broking platforms; and
- operators of any facility, system, trading venue, marketplace or organisation through which market participants (as defined in the Financial Services Act 2013 and Islamic Financial Services Act 2013, respectively) are able to execute binding transactions electronically based on established methods and standard market conventions and includes an electronic broking platform.
Pursuant to the exposure draft:
- the framework will not apply to:
- non-money and/or non-foreign exchange product transactions carried out by operators of recognized markets under the Capital Markets and Services Act 2007;
- any stock market of an approved stock exchange, or facilities offered by an approved stock exchange; or
- a proprietary single-bank platform offered solely for bilateral transactions for money and/or foreign exchange market instruments.
- eligible platform operators are required to obtain BNM’s approval prior to offering their services in Malaysia and to put in place or maintain appropriate internal governance, policies and procedures in providing their services.
- platform operators that wish to offer electronic trading services for securities and instruments, other than those specified in the exposure, draft are required to ascertain and obtain the necessary approvals from relevant authorities, where applicable.
- the Guidelines on Electronic Broking System by Licensed Money Brokers issued on 1 August 200 will be superseded.
The deadline for submission on feedback to the exposure draft is 15 July 2019.
BNM Issues Exposure Draft on Insurance and Takaful Aggregation Business Registration Procedure and Requirements
Insurance and takaful aggregation business will be regulated by BNM as a new category of registered business under the Financial Services Act 2013.
BNM is currently seeking industry comment for its exposure draft, which was issued on 20 June 2019. Based on the exposure draft, "insurance and takaful aggregation business" means the business of providing services through any electronic means that:
- sources, aggregates and compares insurance or takaful products of more than one licensed person; and
- makes referrals to any such licensed person in respect of the procurement of such insurance or takaful products; or
- arranges the procurement of such insurance or takaful products through such electronic means.
According to BNM’s press statement, once this new category of registered business comes into effect:
- insurance and takaful aggregators which were approved under the Financial Technology Regulatory Sandbox; and
- any person intending to become a registered insurance and takaful aggregator,
will be required to registered under the Financial Services Act 2013 to carry on insurance and takaful aggregator business.
The exposure draft sets out the registration procedures, fees, notification and business conduct requirements. One of the requirements would be that the registered insurance and takaful aggregator must be a company registered under the Companies Act 2016.
The deadline for submission on feedback to the exposure draft is 19 July 2019.
For further information, please contact:
Putri Noor Shariza Noordin, Partner, Shearn Delamore & Co
shariza@shearndelamore.com