During the period from December 14, 2021 to January 4, 2022, Bank Negara Malaysia (‘BNM‘) released nine regulatory documents, comprising seven exposure drafts of policy documents, one policy document and one discussion paper. A summary of these documents is provided below.

1. Business Continuity Management Policy Document Exposure Draft

This Exposure Draft presents the proposed revisions to the existing guidelines on business continuity management (revised) published by the BNM on June 3, 2011 (‘Existing BCM Policy Document‘).

The policy document to be issued on the basis of this exposure draft (‘New BCM policy document‘) will apply to licensed banks, licensed investment banks, licensed Islamic banks, licensed insurers, licensed takaful operators, prescribed development financial institutions, designated payment system operators and licensed issuers of money. electronic.

The new BCM policy document will enter into force six months after its date of issue, subject to the transitional provisions set out in Part D of said document. The new BCM policy document will replace the documents set out in paragraph 7.1 thereof.

The deadline for submitting comments to the BNM on the Exposure Draft is March 31, 2022.

2. Climate risk management and scenario analysis exposure draft

This Exposure Draft sets out the requirements and proposed guidance on climate risk management and scenario analysis. The proposed requirements and expectations aim to ensure that financial institutions strengthen the management of financial risks arising from climate change in order to improve the resilience of the financial sector against climate-related risks and facilitate an orderly transition to a low-emission economy. carbon.

The policy document to be issued on the basis of this exposure draft (‘Climate risk policy document‘) will apply to licensed banks, licensed investment banks, licensed Islamic banks, prescribed development financial institutions, licensed insurers (including professional reinsurers), licensed takaful operators (including professional retakaful operators) ) and financial holding companies.

The Climate Risk Policy Document will enter into force on June 1, 2022, subject to the transitional provisions set out in paragraph 4.1 thereof.

The deadline for submitting comments to the BNM on the Exposure Draft is March 31, 2022.

3. Code of Conduct for Wholesale Financial Markets in Malaysia

The Code of Conduct for the Malaysian Wholesale Financial Markets (‘Code of Conduct‘) was published as a policy document on December 31, 2021. It updates and replaces the Code of Conduct for Wholesale Financial Markets in Malaysia published by the BNM on April 22, 2020 and will enter into force on January 31, 2022 , with the exception of paragraphs 8.1 to 8.3. and 28.2 to 28.4 thereof which will come into force on July 31, 2022.

The code of conduct sets out the eligibility conditions for traders and brokers, the requirements for market conduct and internal controls aimed at preserving the professionalism and integrity of wholesale financial markets and the role of industry associations in the preservation of market integrity.

The Code of Conduct applies to market participants who trade in the wholesale financial markets as either sell-side or buy-side entities, and may include licensed banks, licensed investment banks, licensed Islamic banks, prescribed development financial institutions, licensed insurers, takaful operators, licensed money brokers, licensed operators of electronic trading or brokerage platforms, firms and investment institutions. Section 2.2 of the Code of Conduct sets out the parts of the Code of Conduct which apply to the institutions mentioned above.

At the same time, BNM has also released the Guidance Document on Conducting Practices in the Wholesale Market which can be viewed here.

4. Exposure Draft on Managing the Participating Life Insurance Business

This Exposure Draft outlines proposed enhancements to the requirements for the management of participating life insurance funds to maintain the safety and soundness of participating life insurance funds and to protect the interests of policyholders. .

The policy document to be issued on the basis of this exposure draft (‘Life policy document with participation‘) will apply to approved insurers. The participating life insurance policy document will come into effect on its date of issue and will replace the documents set out in paragraph 7.1 thereof.

The deadline for submitting comments to the BNM on the Exposure Draft is March 31, 2022.

5. Insurance Fund Management Exposure Draft

This Exposure Draft sets out, among other things, the requirements for establishing and maintaining insurance funds, the composition of an insurance fund, including withdrawal requirements and specific asset requirements.

The policy document to be issued on the basis of this exposure draft (‘Insurance Fund Policy Document‘) will apply to approved insurers. The insurance fund policy document will come into force on its date of issue and will replace the documents set out in paragraph 7.1 thereof.

The deadline for submitting comments to the BNM on the Exposure Draft is March 31, 2022.

6. Governance, risk management and operations exposure draft for the money services business

This Exposure Draft sets out the minimum standards that holders of a Money Services Business (MSB) license are required to adhere to in order to implement sound governance, appropriate risk management and strong internal control systems. their business.

The policy document to be issued on the basis of this exposure draft (‘MSB Policy Document‘) will apply to money services businesses licensed under the Money Services Business Act 2011. The MSB Policy Document will come into effect on the date of issue and replace the documents set out in Schedule I thereof.

The deadline for submitting comments to the BNM on the Exposure Draft is February 28, 2022.

seven. Payment System Operator Exposure Draft

This Exposure Draft describes the requirements to ensure the safety, efficiency and reliability of payment systems, to preserve public confidence in payment systems and the use of payment instruments, and to ensure that payment systems payment are aligned with relevant international standards.

The policy document to be issued on the basis of this exposure draft (‘PSO Policy Document‘) will apply to operators licensed under Article 11 of the Financial Services Act 2013 (‘FSA‘) or Article 11 of the Islamic Financial Services Act 2013 (‘IFSA‘) to operate a payment system referred to in paragraph 1 of division 1 of part 1 of annex 1 of the FSA or in paragraph 1 of part 1 of annex 1 of the IFSA, respectively. The PSO policy document will come into effect on the date of publication.

The deadline for submitting comments to the BNM on the Exposure Draft is March 31, 2022.

8. Payment Cards Framework Exposure Draft

This Exposure Draft outlines proposed measures to foster a secure, efficient and transparent payment card industry in Malaysia and aims to ensure that the cost of accepting payment cards remains fair and reasonable, which will help promote acceptance and wider use of payment cards.

The policy document to be issued on the basis of this exposure draft (‘Payment cards frame‘) will apply to issuers of international branded credit, debit and prepaid cards, acquirers and operators of a payment system, including operators of a payment card network, as defined in section 5.2 of the Payment Cards Framework. The Payment Cards Framework will come into effect on the date of issue and replace the documents set out in paragraph 7.1 thereof.

The deadline for submitting comments to the BNM on the exposure draft is February 15, 2022.

9. Licensing Framework Discussion Paper for Digital Insurers and Takaful Operators

This discussion paper describes the proposed framework for two new categories of licensees for insurance and takaful activities, namely digital insurers licensed under Section 10 of the FSA to conduct digital insurance activities and digital takaful operators authorized under Article 10 of the IFSA to carry out digital activities. takaful enterprise (collectively ‘DITO‘) and invites comments on the proposed entry requirements and key evaluation criteria for DITO licensing, the temporary flexibilities offered during the foundational phase of DITO operations, the regulatory framework and infrastructure for DITOs. market to support the development of digital insurance and takaful in Malaysia.

The policy document to be published on the basis of this discussion paper will apply to applicants under Section 10 FSA to engage in digital insurance business and Section 10 of IFSA to engage in digital business takaful, potential licensed digital insurers, potential licensed digital insurers takaful operators, shareholders of potential licensed digital insurers, shareholders of potential licensed digital takaful operators, shareholders of licensed digital insurers and shareholders of takaful operators digital licensed.

According to the BNM, one or more separate policy documents will be released to address prudential and business conduct requirements for DITOs later in 2022.

The deadline for submitting comments to the BNM on the discussion paper is February 28, 2022.