2 January, 2020
Maximum Stamp Duty on Foreign Currency Loan Agreements
Following our October Legal Alert on the proposal by the Minister of Finance for Budget 2020, the Finance Bill 2019 was passed by the Senate on 18 December 2019. The Finance Bill 2019 will be gazetted after the assent of Yang di-Pertuan Agong has been received. The Finance Bill 2019 will come into operation on the dates specified therein.
Presently, the maximum amount of stamp duty payable on charge or mortgage, agreement for a charge or mortgage, bond, covenant or debenture where the loan is a foreign currency loan or the financing was made according to the syariah in currencies other than the ringgit is RM500. When the Finance Bill 2019 comes into force, the maximum amount stamp duty payable will be increased to RM2,000. This amendment will come into operation on 1 January 2020.
Bank Negara Malaysia Issues Exposure Draft on Licensing Framework for Digital Banks
Bank Negara Malaysia (“BNM”) had, on 27 December 2019, issued an exposure draft on the licensing framework for digital banks.
The deadline for submission of any feedback on the exposure draft to BNM is 28 February 2020.
The exposure draft sets out:
- the eligibility requirement and application procedure which must be complied with by an applicant intending to carry on digital banking or Islamic digital banking business;
- the business limitations and regulatory framework applicable to a licensed digital bank during the foundational phase; and
- the business activities that must be undertaken and the physical access points that may be established by the licensed digital bank.
In short, digital banks will be required to comply with the requirements under the Financial Services Act 2013 or, as the case may be, Islamic Financial Services Act 2013, including the applicable regulatory requirements relating to standards on prudential, business conduct, consumer protection and anti-money laundering and terrorism financing. Having said that, licensed digital banks will be subject to a simplified regulatory requirement relating to, among others, capital adequacy and public disclosure requirements.
Presently, BNM intends to issue up to five licences to qualified applicants to establish digital banks to conduct either conventional or Islamic banking business in Malaysia. The framework is intended for digital banks to offer banking products and services to underserved or unserved market primarily through digital or electronic means.
A copy of the exposure draft is available here.
For further information, please contact:
Putri Noor Shariza Noordin, Partner, Shearn Delamore & Co
shariza@shearndelamore.com
