Topik 1 Rangka Kerja Perundangan

7/28/2019 Topik 1 Rangka Kerja Perundangan

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A M I N U R A S Y E D B I N M A H P O P

F A C U L T Y O F L A W

U N I V E R S I T I K E B A N G S A A N M A L A Y S I A

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LEGAL&

REGULATORY FRAMEWORK


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Legal & Regulatory Framework2

The Banking System

The Functions and Responsibilities of Monetary andNon-Monetary Institutions

Non-Bank Financial Intermediaries BNM Guidelines

Foreign Investment Committee (FIC) Guidelines

The Anti-Money Laundering and Anti-TerrorismFinancing Act 2001


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The Banking System3

Composition of the Banking System

Comprises the Central Bank, commercial banks and otherfinancial institutions.

BNM is at the apex of the monetary and banking systemand has been entrusted with the regulation and supervisionof the banking system.

The offshore banks come under the purview and

supervision of the Labuan Financial Services Authority(Labuan FSA).


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The Banking System4

Banking Financial Intermediaries

Can be divided into two categories:

1. The monetary institutions comprising BNM,commercial banks, Islamic banks, InternationalIslamic banks; and

2. The non-monetary institutions comprising theinvestment banks, development financial institutionsand other financial institutions.


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The Functions and Responsibilities ofMonetary and Non-Monetary Institutions

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Bank Negara Malaysia To formulate and conduct monetary policy in Malaysia; To issue currency in Malaysia; To regulate and supervise financial institutions which are

subject to the laws enforced by the Bank; To provide oversight over money and foreign exchange

markets; To exercise oversight over payment systems; To hold and manage the foreign reserves of Malaysia; To promote an exchange rate regime consistent with the

fundamentals of the economy; and To act as financial advisor, banker and financial agent of

the government.


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Central Bank of Malaysia Act 2009

An act to provide for the continued existence of the CentralBank of Malaysia and for the administration, objects,

functions and powers of the Bank, for consequential orincidental matters.


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Banking and Financial Institutions Act 1989

An act to provide new laws for the licensing and regulationof institutions carrying on banking, finance company,

merchant banking, discount house and money-brokingbusinesses, for the regulation of institutions carrying oncertain other financial businesses, and for mattersincidental thereto or connected therewith.


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Banking and Financial Institutions Act 1989 Banque Nationale de Paris v Wuan Swee May & Anor [2000] 3 MLJ

587, High Court Light Style Sdn Bhd v KFH Ijarah House (Malaysia) Sdn Bhd[2009] 4

MLJ 575, High Court Malaysian French Bank Bhd & Ors v Joo Seng Rubber Co Sdn Bhd

[1992] 1 MLJ 528, High Court Coramas Sdn Bhd v Rakyat First Merchant Bankers Bhd & Anor

[1994] 1 MLJ 369, Supreme Court Phileo Allied Bank (M) Bhd v Koshish Credit & Leasing Sdn Bhd

[2002] 1 MLJ 245, High Court Alliance Bank Malaysia Bhd v MVK Development Sdn Bhd[2005] 5

CLJ 77, High Court


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Commercial Banks, Islamic Banks andInvestment Banks Providing facilities for savings through current, savings

and fixed/time deposit accounts & other financial

instruments; Providing facilities to effect payments on behalf of its

customer;

Providing loans & credit facilities;

Financing the government through the purchase ofgovernment securities & treasury bills; and

Providing a wide variety of other banking services, suchas remittances, facilitating forex transactions, internetbanking & the financing.


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Offshore Banks

To be responsible for setting national objectives, policies &priorities for the development & administration of LabuanIBFC;

To be responsible for the promotional & developmentaspects of Labuan IBFC;

To supervise the activities & operations of the Labuanfinancial services industry, & to process applications toconduct business in the Labuan IBFC; and

To administer & enforce the Labuan financial serviceslegislation.


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Non-Bank Financial Intermediaries11

Development Financial Institutions

To develop & promote key sectors that are considered ofstrategic importance to the overall socio-economic

development objectives of the country. These strategic sectors include agriculture, small and

medium enterprise, infrastructure, maritime, export-oriented sector as well as capital-intensive and high-

technology industries.


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Credit and Leasing Companies

Provide leasing & hire-purchase facilities for equipment &machinery. Some of these institutions also provide

factoring facilities.


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Malaysian Exchange of Securities Dealingsand Automated Quotations (MESDAQ)

MESDAQ was approved as a stock exchange and issupervise by the Securities Commission.

MESDAQs trading is based on a system of competitivemarket-making.


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Securities Commission

Responsible for the regulation & development of thesecurities industry, financial futures & option markets, unit

trust & property trust schemes & company takeovers &mergers.


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BNM Guidelines15

Guidelines on Capital Adequacy1) Risk-Weighted Capital Adequacy Framework (Basel 1 - Risk-Weighted Assets Computation)

2) Capital Adequacy Framework for Islamic Banks (Risk-Weighted Assets)

3) Capital Adequacy Framework (Basel II Risk-Weighted Assets)

4) Risk Weighted Capital Adequacy Framework (Basel II) - Disclosure Requirements

5) Capital Requirement6) Guidelines on Recognition and Measurement of Profit Sharing Investment Account as Risk

Absorbent

7) Guideline on Minimum Capital Funds Unimpaired by Losses for Islamic Banks

8) Capital Adequacy Framework (Capital Components)

9) Capital Adequacy Framework for Islamic Banks (Capital Components

10)Capital Adequacy Framework for Islamic Banks (CAFIB) - Disclosure Requirements (Pillar3)

11) Risk-Weighted Capital Adequacy Framework (Basel II) - Internal Capital AdequacyAssessment Process (Pillar 2)

12)Capital Adequacy Framework for Islamic Banks (CAFIB) - Internal Capital AdequacyAssessment Process (Pillar 2)

13)Notification on the Implementation of Basel III


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BNM Guidelines16

Guidelines on Financial Reporting

1) Guidelines on Financial Reporting for Licensed IslamicBanks

2)Circular on the Application of FRS and Revised FinancialReporting Requirements for Islamic Banks

3) Guidelines on Financial Reporting for BankingInstitutions

4)Guidelines on Financial Reporting for Licensed IslamicBanks (GP8-i)


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BNM Guidelines17

Guidelines on Anti-Money Laundering

1) Anti-Money Laundering and Counter Financing ofTerrorism (AML/ CFT) Sectoral Guidelines 1 for Bankingand Financial Institutions

2) Standard Guidelines on Anti-Money Laundering andCounter Financing of Terrorism (AML/ CFT)

3) Anti-Money Laundering and Counter Financing ofTerrorism Sectoral Guidelines 3 for Licensed MoneyChangers and/or Non-Bank Remittance Operators


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BNM Guidelines18

Guidelines on Prudential Limits & Standards1) Statutory Reserve Requirement

2) Liquidity Framework

3) Liquidity Framework-i (for Islamic Banking Institutions)

4) Prudential Standards on Securitisation Transactions

5) Guidelines on Accepted Bill-i (AB-i)

6) Guidance Notes on Sell and Buy Back Agreement Transactions

7) Shariah Resolutions in Islamic Finance

8) Guidelines on Single Counterparty Exposure Limit (SCEL)

9) Best Practices for Credit Risk Management

10) Guidelines on Introduction of New Products

11) Guidelines on Investment Banks

12) Guidelines on Investment in Shares, Interest-in- Shares and Collective Investment Schemes

13) Guidelines on Investment in Shares, Interest-in- Shares and Collective Investment Schemes forIslamic Banks.

14) Guidelines on Musharakah and Mudharabah Contracts for Islamic Banking Institutions

15) Guidelines on Fit and Proper for Key Responsible Persons

16) Guidelines on Corporate Governance for Licensed Institutions

17) Guidelines on Corporate Governance for Licensed Islamic Banks (Revised BNM/GP1-i)


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BNM Guidelines19

Guidelines on Prudential Limits & Standards18) Guidelines on Credit Transactions and Exposures with Connected Parties

19) Guidelines on Credit Transactions and Exposures with Connected Parties for Islamic BanksMinimum

20) Guidelines on the Provision of Internet Banking Services by Licensed Banking Institutions

21) Appointment of External Auditors by Banking Institutions

22) Guideline on Stress Testing

23) Guidelines on the Governance of Shariah Committee for the Islamic Financial Institutions

24) Guidelines on Reference Rates, Lending Rates and Deposit Rates of Banking Institutions

25) Guidelines on International Islamic Bank

26) Appointment of External Auditors by Islamic Banks

27) Guidelines on Permitted Capital Market Activities by Islamic Banks

28) Guidelines on Skim Perbankan Islam29) Auto Debit Settlement for Ringgit Money Market Transactions with Bank Negara Malaysia

30) Guidelines on Data Management and MIS Framework

31) Prohibition on Specific/ Restricted and Loss-Bearing Fund Placement from Islamic Banks toParent Banking Institutions

32) Guidelines on Property Development and Property Investment Activities by Islamic Banks

33) Classification and Impairment Provision for Loans/Financing

34) Guidelines on Ibra' (Rebate) for Sale-Based Financing


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Foreign Investment Committee (FIC)Guidelines

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Objectives and Rationale for FIC Guidelines

To regulate both foreign and local investments inMalaysia. Under the FIC Guidelines, companies

incorporated in Malaysia may have in aggregate foreigninterest of up to 30% with the remaining 70% to be heldby Malaysians, including at least 30% Bumiputeras.


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Guidelines on the Acquisition of Interests,Mergers and Takeover

1. Any proposed acquisition of:

a) Substantial fixed assets in Malaysia by foreign interestsor assets or interests in companies & businesses inMalaysia, which will result in ownership or controlpassing to foreign interests;

b) 15% or more of the voting power by any one foreigninterest or associated group; or

c) 30% or more of the voting power of a Malaysiancompany & business by a foreign interest in aggregate.


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Guidelines on the Acquisition of Interests,Mergers and Takeover

2. Any transaction where control of Malaysian companies &businesses passes to foreign interests through any form ofjoint venture, management or technical assistanceagreement, or other arrangement;

3. Any merger or takeover of any company or business inMalaysia whether by Malaysian or foreign interests; and

4. Any other proposed acquisition of assets or interestsexceeding in value the sum of RM10 million, whetherMalaysian or foreign interests.


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Guidelines on the Acquisition of Propertiesby Foreign Concerns

Foreign interest are not allowed to acquire:

a) Low and medium low cost properties;

b) Properties built on Malay reserve land;

c) Properties allocated to Bumiputera in any propertydevelopment;

d) Stalls and service workshops;

e) Agricultural land developed on the basis of the homesteadconcept.


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The Anti-Money Laundering and Anti-Terrorism Financing Act 2001

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Power of Investigation, Search and Seizure

These include the power to:

Enter and search the premises for any property, record,report or document;

Make copies of, take extracts from, take possession of orremove from the premises, any of the records, reports ordocument that were seized; and

Search and detain any person.


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Offences by and Legal Obligations and Duties Imposed on Bankers

Money laundering mean the act of a person who:

Engages, directly or indirectly, in a transaction that involves proceeds of anunlawful activity;

Acquires, receives, possesses, disguises, transfers, converts, exchanges, carries,disposes, uses, removes from or brings into Malaysia proceeds of any unlawfulactivity; or

Conceals, disguises or impedes the establishment of the true nature, origin,location, movement, disposition, title of, rights with respect to, or ownership of,proceed of an unlawful activity; where

The person knows or has reason to believe, that the property is proceeds fromany unlawful activity; or

The person without reasonable excuse fails to take reasonable steps to ascertainwhether or not the property is proceeds from any unlawful activity.


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Reporting Obligations

Record-keeping by reporting institutions (RI)

1) The identity & address of the person transacting;

2) The identity & address of the beneficiary or principal;3) The identity of the accounts affected by the transaction,

if any;

4) The type of transaction involved;

5) The identity of the reporting institution where thetransaction occurred; and

6) The date, time and amount of the transaction,


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Reporting Obligations

Report by reporting institutions

1) Exceeding the amount specified; and

2) Where the identity of the persons or transaction orcircumstances raises suspicion that proceeds of anunlawful activity is involved.


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THE END

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Topik 1 Rangka Kerja Perundangan