Malaysia
Legislative and Regulatory Amendments
- Securities Commission Malaysia (SC)
SC Issues guidance for Finfluencers
The SC updated the Guidance note for on the Provision of Investment Advice, to address the growing popularity of financial influencers (finfluencers) promoting capital market products and services on social media, this note aims to enhance public awareness. It clarifies the SC’s expectations for finfluencers sharing financial insights and recommendations online, with the goal of ensuring equitable regulatory treatment in the provision of investment advice.
Date of Release: 18 July 2024
Implementation on: 18 July 2024
Applicable to: Financial Industry specifically finfluencers
Update from the 13th Joint Committee on Climate Change (JC3 Meeting)
The Joint Committee on Climate Change announced that they will reduce the reporting burdens on companies regarding the information provided to financial institutions. This includes the use of standardised templates by financial institutions to obtain climate-related information from customers, as well as arrangements to allow companies to share their information among financial institutions with consent.
Date of Release: 30 July 2024
Implementation on: 30 July 2024
Applicable to: All Capital Markets Intermediaries
SC’s Guidelines of Technology Risk Management Take Effect
The revised guidelines, initially released in August 2023, have now come into effect. These guidelines emphasise the need to enhance operational reliability, security, and resilience against technological disruptions. Additionally, they outline the SC’s minimum expectations for risk management practices that must be adopted by the industry.
Date of Release: 19 August 2024
Implementation on: 19 August 2024
Applicable to: All Capital Markets Intermediaries
SC Outlines Family Office Incentive Scheme
The SC released a statement welcoming the Government’s announcement of the new Family Office incentive scheme, which is part of the incentive packages for the Forest City Special Financial Zone. The SC is currently collaborating with the relevant stakeholders to operationalise the scheme by the first quarter of 2025.
Date of Release: 23 September 2024
Implementation on: Q1 2025
Applicable to: Family Offices
National Sustainability Reporting Framework to Enhance Sustainability Disclosures
The SC has announced the National Sustainability Reporting Framework (NSRF), which aims to enhance transparency regarding how businesses manage sustainability risks and opportunities. This framework is designed to strengthen business resilience and contribute to the broader sustainability agenda. Additionally, it addresses the need for consistent, comparable, and reliable disclosures.
Date of Release: 24 September 2024
Implementation on: The implementation date depends on the size of the business, with deadlines set for either 2025, 2026, or 2027
Applicable to: All Capital Markets Intermediaries
The SC has observed deficiencies in the controls related to the acceptance of third-party deposits among some capital market intermediaries. These shortcomings have resulted in delays or failures in detecting fraud and misappropriations. The SC emphasises the importance of implementing robust controls to mitigate the risks associated with third-party deposits.
Date of Release: 18 July 2024
Implementation on: 18 July 2024
Applicable to: All Capital Markets Intermediaries
Technical Note No. 2/2024 - Clarification on Recognition of Foreign Auditor Who Audits Foreign Fund
The SC clarifies that the AOB Recognition Requirement is not required under subsection 31N(1) of the SCMA for an auditor who audits a foreign fund recognised by the SC provided that the foreign fund complies with the OMD Guidelines and unless otherwise determined by the SC.
Date of Release: 5 August 2024
Implementation on: 5 August 2024
Applicable to: Foreign Fund Auditors
The SC is issuing a reminder about the importance of always adhering to the minimum financial requirements, as stipulated in subparagraph 4.04(2) of the SC’s Licensing Handbook. These requirements ensure that intermediaries are sufficiently capitalised to withstand financial pressures and to protect investors from potential losses.
Date of Release: 13 August 2024
Implementation on: 13 August 2024
Applicable to: All Capital Markets Intermediaries
The SC issued a Practice Note to facilitate trading digital assets that have been prescribed as securities. Specifically, the SC has introduced the framework for digital asset custodians (“DAC”) and stated that the relevant intermediary may deposit client’s digital assets with a DAC.
Date of Release: 26 August 2024
Implementation on: 26 August 2024
Applicable to: All Capital Markets Intermediaries
- Bursa Malaysia
Bursa Malaysia has announced the creation of a customised index to promote the recognition of Corporate Zakat practices among publicly listed companies. This initiative aims to advance Shariah-compliant products and services by offering innovative market offerings.
Date of Release: 15 July 2024
Implementation on: 15 July 2024
Applicable to: All Capital Markets Intermediaries
- Bank Negara Malaysia (BNM)
Money Services Business (Amendment) Act 2024 (MSBA 2024) in force effective 1 August 2024
The MBSA 2024 which is enforced by Bank Negara Malaysia is in force effective 1 August 2024. This amendment will strengthen BNM’s ability to carry out enforcement actions against illegal operators. This will in turn serve as a deterrent against unauthorised activities that undermine the industry.
Date of Release: 1 August 2024
Implementation on: 1 August 2024
Applicable to: Money Service Businesses
National Fraud Portal to solidify coordinated efforts in curbing financial scams
BNM, Payments Network Malaysia Sdn. Bhd. (PayNet), and financial institutions have launched the National Fraud Portal as an integrated platform to strengthen the timeliness and effectiveness of tracing the stolen funds of fraud victims. The industry has in addition to this portal decided to adopt industry wide procedures for reporting and handling mule accounts.
Date of Release: 20 August 2024
Implementation on: 20 August 2024
Applicable to: Financial Institutions
Exposure Draft on Broader Application of Ta`awun in Takaful
BNM has issued an exposure draft regarding the broader application of Ta’ayun in Takaful. This draft outlines the proposed Shariah and regulatory requirements to fully utilise Takaful's potential in promoting financial resilience as well as inclusion.
Date of Release: 1 July 2024
Implementation on: 28 June 2024
Applicable to: Financial Institutions
Policy Document on Claims Settlement Practices
BNM has issued a policy document on claims settlement practices, outlining the minimum standards for handling and assessing general insurance and takaful claims. The aim is to promote equitable and timely resolutions while encouraging the wider adoption of digital solutions.
Date of Release: 1 July 2024
Implementation on: 1 July 2024 and 2 January 2025
Applicable to: Licensed Insurers, Takaful Operators and Registered Adjusters
Policy Document on Licensing and Regulatory Framework for Digital Insurers and Takaful Operators
BNM has issues a policy document on the Licensing and Regulatory Framework for Digital Insurers and Takaful Operators. This aims to promote the entry of new digital insurers and takaful operators that add value to the existing industry.
Date of Release: 9 July 2024
Implementation on: 2 January 2025
Applicable to: Licensed Insurers, Takaful Operators
The SAC of BNM proposed new features for SBBA instruments. These are features that are available if permissible are margining, profit disbursement and substitution of assets.
Date of Release: 16 July 2024
Implementation on: 30 June 2025
Applicable to: Financial Institutions that are licensed to carry out Islamic financial business.
Discussion Paper on Proposed Full Transition to MYOR / MYOR-i and Cessation of KLIBOR
BNM released a discussion paper relating to the full transition away from the Kuala Lumpur Interbank Offered Rate to the Malaysia Overnight Rate / Malaysia Islamic Overnight Rate. The paper will be important to develop a roadmap to ensure a successful transition.
Date of Release: 27 September 2024
Implementation on: 27 September 2024
Applicable to: Financial Industry
Consultations
No consultations for Malaysia in Q3
This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.