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Legal Updates – September 2022 – Financial Services



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Financial Services

Expansion of SRI Sukuk and Bond Grant Scheme

The Securities Commission Malaysia (“SC”) announced
the expansion of the Sustainable and Responsible Investment
(“SRI”) Sukuk and Bond Grant Scheme (“Grant”)
to facilitate sustainable finance.

The Grant, which was originally made applicable to sukuk issued
under the SC’s SRI Sukuk Framework and bonds issued under the
ASEAN Green, Social and Sustainability Bond Standards, have been
expanded to include companies issuing sukuk under the SC’s
Sustainable and Responsible Investment linked
(“SRI-linked”) Sukuk Framework.

Eligible issuers under the SRI-linked Sukuk Framework will be
eligible to apply to offset up to 90% of the external review costs
incurred, subject to a maximum of RM300,000 per issuance.

Updates by the Joint Committee on Climate Change
(“JC3”)

Following the 8th meeting of JC3 on 29 August 2022, Bank Negara
Malaysia (“BNM”) and the SC issued a joint statement
indicating that JC3 will continue to focus on the following
priorities:

  • financial institutions have submitted the first report on the
    application of the Climate Change and Principle-based Taxonomy
    (“CCPT”) to BNM. JC3, through the CCPT Implementation
    Group (“CCPT IG”), is working with the industry and
    partners to further improve the consistency and quality of
    classifications under the CCPT for existing outstanding financing
    and investments.

CCPT IG will publish and maintain a set of CCPT FAQs on
application issues to promote more consistent practices across
financial institutions and has developed a due-diligence
questionnaire together with World Wide Fund (“WWF”)
Malaysia on selected CCPT guiding principles.

  • JC3 is now supporting Capital Markets Malaysia
    (“CMM”), an affiliate of the SC, to develop an ESG
    Disclosure Guide (“Guide”) tailored to Malaysian Small
    and Medium Enterprises (“SMEs”).

  • JC3 welcomed the issuance of the Sustainable and Responsible Investment-linked
    (SRI-linked) Sukuk Framework
    by the SC on 30 June 2022 to
    facilitate companies to issue SRI-linked Sukuk to support their
    transition towards low-carbon activities. JC3 is also actively
    exploring suitable pilot programmes to test new green solutions and
    instruments such as blended finance to support the development of
    climate-friendly projects.

  • a Data Catalogue will be accompanied by a brief report on the
    data availability, gaps and specific recommendations to bridge data
    gaps, developed by JC3 remains on track for publication by
    end-2022.

New Policy Document on Payment Cards Framework

On 29 August 2022, BNM issued a new policy document on Payment
Cards Framework (“PCF PD”).

Pursuant to the PCF PD:

  • it applies to (i) issuers of credit cards, debit cards and
    international brand prepaid cards; (ii) merchant acquirers of
    credit card, debit card and international brand prepaid card
    transactions which are registered under sections 17(1) and 18 of
    the Financial Services Act 2013; (iii) operators of payment
    systems, including operators of a payment card network, approved
    under section 11 of the Financial Services Act 2013 or the Islamic
    Financial Services Act 2013.

  • enhances measures implemented by BNM under the Payment Card
    Reform Framework which was issued in 2014, in line with the
    changing payment card landscape.

  • the provisions of the PCF PD came into effect on 19 August 2022
    save for the following paragraphs which will only come into effect
    on 1 January 2023:

− paragraphs 8.1 to 8.6 on interchange fee ceilings;

− paragraphs 10.9 and 10.10 on acceptance of payment cards
by merchants; and

− paragraphs 11.1 to 11.8 on addressing surcharging and
minimum transaction amount practices.

Revision to Guidelines on Unlisted Capital Market Products
under the Lodge and Launch Framework

The SC has on 1 September 2022 made certain housekeeping
amendments throughout the Guidelines on Unlisted Capital Market
Products under the Lodge and Launch Framework issued on 9 March
2015 to provide greater clarity and consistency. These amendments
include stylistic or formatting changes and necessary changes of an
editorial nature and substitution of terms.

Revision to Guidelines on Private Retirement Schemes

The SC has on 1 September 2022 made certain housekeeping
amendments throughout the Guidelines on Private Retirement Schemes
issued on 5 April 2012 to provide greater clarity and consistency.
These amendments include stylistic or formatting changes and
necessary changes of an editorial nature, substitution of terms and
insertion of a new section. A new section containing a set of
Guidance to the guidelines has also been inserted.

In connection therewith, the SC has also revised its FAQs on the
Guidelines on Private Retirement Schemes on 1 September 2022 to
address questions relating to, inter alia, removal of the
requirement for investment committee, application, registration,
lodgement and notification and transitional arrangement.

SC Issues FAQs on Guidelines on Corporate Governance for
Capital Market Intermediaries

On 22 August 2022, the SC has issued an FAQs on the Guidelines
on Corporate Governance for Capital Market Intermediaries to
address questions relating to, inter alia, governance-related
requirements, board composition, active politicians, internal audit
and outsourcing.

To view the full article please click
here.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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