New Policy Documents Issued for Money Services Business
15 July 2022
Bank Negara Malaysia (‘BNM’) has issued the following documents in relation to money services businesses (‘MSB’) licensed under the Money Services Business Act 2011 (‘MSBA’):
Both policy documents came into effect on 30 June 2022.
MSB Operations Document
The MSB Operations Document sets out the minimum standards that MSB licensees must observe in implementing sound governance, appropriate risk management and robust internal control systems for their business.
The requirements set out in the MSB Operations Document include the following:
- Governance requirements;
- Operational requirements (including, among others, the conduct and restriction on business, use of service providers and specific requirements applicable to remittance business, money-changing business and wholesale currency business);
- Risk management and internal controls; and
- Information technology requirements.
The MSB Operations Document supersedes the 13 guidelines, circulars and notifications set out in Appendix 1 of the MSB Operations Document and enhances the regulatory requirements for the MSB industry, in particular, in terms of governance, risk management, operational requirements, and information technology requirements. Where applicable, the legal instruments and policy documents set out in paragraph 6.1 of the MSB Operations Document will continue to apply to MSB licensees.
The consolidation of the 13 superseded guidelines, circulars and notifications into a single policy document is welcomed as this single source of reference will ease the management and administration of MSB by licensees.
Agent Oversight Document
The Agent Oversight Document applies to all MSB licensees which have obtained approval of BNM under sections 42 and 43 of the MSBA to appoint agents to carry on MSB on their behalf.
The Agent Oversight Document sets out the minimum requirements that the aforesaid approved MSB licensee is required to observe to ensure effective agent oversight for principal-agent arrangements. Among others, these requirements include the following:
- Requirements relating to agent oversight;
- Policies and procedures on appointment of agent;
- Terms of appointment and training of agent;
- Policy, processes and controls to monitor agent’s operations and compliance; and
- Specific matters requiring approval of or notification to BNM.
The Agent Oversight Document supersedes the Guidelines on Agent Oversight Framework for the Money Services Business Industry issued on 15 April 2013.
Alert prepared by Lee Ai Hsian (Partner) and Kok Chee Kheong (Partner) of the Corporate Practice of Skrine