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Bank Negara revises Policy Document on Governance, Risk Management, and Operations for Money Services Business (MSB)

22 April 2025

Bank Negara Malaysia (“BNM”) recently issued a revised Policy Document on Governance, Risk Management, and Operations for Money Services Business (MSB) (“Revised Policy Document”). The Revised Policy Document took effect immediately on its date of issuance, namely, 9 April 2025.
 
The Revised Policy Document supersedes the 14 policy document, guidelines, circulars and notifications set out in Appendix I of the Revised Policy Document. In particular, it superseded a policy document of the same name issued by BNM on 30 June 2022 (“Superseded Policy Document”).
 
As in the case of its predecessor, the Revised Policy Document applies to money services businesses that are licensed under the Money Services Business Act 2012 (severally “MSB” and collectively “MSBs”).
 
It is to be noted that the requirements relating to MSBs under the existing guidelines, circulars and notifications were consolidated under the Superseded Policy Document, thus providing a convenient single source of reference for MSBs.
 
Like the Superseded Policy Document, the Revised Policy Document sets out the minimum standards that MSBs are required to observe in implementing sound governance, appropriate risk management and robust internal control systems for their money services business.
 
The requirements in the Revised Policy Document include the following: 
  1. governance requirements; 

  2. operational requirements, including among others: 
  • the conduct of and restriction on business;
  • outsourcing of services; and
  • specific requirements applicable to remittance business, money-changing business and wholesale currency business; 
  1. risk management and internal controls; and 

  2. information technology requirements. 
The provisions of the Revised Policy Document are substantially similar with those in the Superseded Policy Document except for the following: 
  1. A new paragraph 9.2.2 encourages the board to ensure that the MSB’s compliance officer is certified/ accredited by relevant recognised certification/ accreditation bodies as having acquired the knowledge required to effectively perform the AML/CFT/CPF compliance function in a MSB. This requirement was previously found in paragraph 4(c) of Appendix II of the Superseded Policy Document. 

  2. The amendment to paragraph 14.3.4 allows a MSB to engage in forward exchange transactions with its customers, subject to BNM’s prior written approval being obtained. Such forward exchange transactions were prohibited under the corresponding paragraph of the Superseded Policy Document. 

  3. Paragraph 19.1 of the Revised Policy Document requires a MSB to notify BNM prior to its sharing of business premises with other businesses. Paragraph 19.1 of the Superseded Policy Document imposes a similar requirement but did not specify when the MSB is required to issue the notification. 

  4. The right of BNM under paragraph 35.2 of the Superseded Policy Document to exempt any MSB from any requirement in the policy document has been removed from the Revised Policy Document. 

  5. In place of the requirement under paragraph 4(c) of Appendix II of the Superseded Policy Document which has been relocated to paragraph 9.2.2 of the Revised Policy Document (see item 1 above), paragraph 4(c) of Appendix II now requires a compliance officer to attend relevant AML/CFT/CPF training every financial year to ensure continuous learning of the knowledge necessary for the effective execution of his AML/CFT/CPF compliance responsibilities within the MSB. 

  6. The requirements and timelines set out in the table in paragraph 5 of Appendix II have been amended in the following respects: 
  • the requirements to enrol in and complete a certification/ accreditation programme by relevant recognised certification / accreditation body have been removed; and
  • a new requirement has been imposed requiring a compliance officer to attend relevant AML/CFT/CPF training at least once in every financial of the MSB1.
In addition to the foregoing, a number of drafting amendments have been made in the Revised Policy Document to clarify certain provisions in the Superseded Policy Document.
 
The Revised Policy Document is not a major revamp but updates the requirements in the Superseded Policy Document.
 
 
Article by Lee Ai Hsian (Partner) of the Corporate Practice of Skrine.
 
 
 
1 This clarifies the requirement in paragraph 4(c) of Appendix II of the Revised Policy Document.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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