KUALA LUMPUR (Dec 1): The Money Services Business Act 2011 (the Act) came into force on Thursday, repealing the Money-Changing Act 1998, said Bank Negara Malaysia.
In a statement Dec 1, Bank Negara said the new Act supports the development of a more dynamic, competitive and professional money services business industry, (comprising the money changing, remittance and wholesale currency businesses), while strengthening safeguards against money laundering, terrorist financing and illegal activities.
'The Act provides a single, uniform regulatory framework for licensees carrying on money changing, remittance and wholesale currency businesses which are currently governed under three separate laws, namely the Money Changing Act 1998, the Payments Systems Act 2003 and the Exchange Control Act 1953,' it said.
The central bank said the Act introduces strengthened prudential requirements, focusing in particular on ensuring the effective oversight and control of the conduct and operations of licensed entities to safeguard the integrity of, and confidence in the money services business industry.
This includes strengthened fit and proper requirements for shareholders, directors and chief executive officers of licensed entities, and financial and operational requirements that reflect the size and scope of business of an entity, it said.
Bank Negara said a licensed entity must comply with specific obligations under the Act to institute and maintain effective internal control mechanisms (which include risk management, accounting and security measures to ensure the safety and integrity of its business); governance arrangements that are accountable and transparent; and adequate procedures to ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001.
The central bank also said the Act further promotes greater transparency in dealings with customers and enhances the protection afforded over customers' funds handled by licensed entities.
This is supported by wider enforcement powers provided for Bank Negara to take early action against non-compliances or breaches of regulatory requirements, it said.
'In line with the efforts to further develop and modernise the industry, licensed entities that can demonstrate the financial and operational capacity to effectively manage and control risks in the business with high professional standards of conduct, will be able to expand their current scope of activities to provide a wider range of services that can include money changing, remittance and/or wholesale currency services under a single licence.
"This will be subject to compliance with minimum financial and operational standards set by Bank Negara,' it said.
The central bank said such entities would also enjoy greater operational flexibilities and be able to broaden their outreach, including through the appointment of existing smaller licensees as agents.
It said the new landscape thus provides opportunities for greater synergies to be reaped through business arrangements that are more efficient, while evolving a more advanced and viable industry that will complement the banking sector in delivering convenient and high quality financial services to individuals and businesses.
'Bank Negara has closely engaged the industry on this new regulatory framework and will support a smooth transition to the new regime.
'Access by the public to money changing and remittance services will not be affected during the transition to this new regime,' it said.
For further information on the Money Services Business Act, members of the public can contact BNMLINK at 1-300-88-5465.
In a statement Dec 1, Bank Negara said the new Act supports the development of a more dynamic, competitive and professional money services business industry, (comprising the money changing, remittance and wholesale currency businesses), while strengthening safeguards against money laundering, terrorist financing and illegal activities.
'The Act provides a single, uniform regulatory framework for licensees carrying on money changing, remittance and wholesale currency businesses which are currently governed under three separate laws, namely the Money Changing Act 1998, the Payments Systems Act 2003 and the Exchange Control Act 1953,' it said.
The central bank said the Act introduces strengthened prudential requirements, focusing in particular on ensuring the effective oversight and control of the conduct and operations of licensed entities to safeguard the integrity of, and confidence in the money services business industry.
This includes strengthened fit and proper requirements for shareholders, directors and chief executive officers of licensed entities, and financial and operational requirements that reflect the size and scope of business of an entity, it said.
Bank Negara said a licensed entity must comply with specific obligations under the Act to institute and maintain effective internal control mechanisms (which include risk management, accounting and security measures to ensure the safety and integrity of its business); governance arrangements that are accountable and transparent; and adequate procedures to ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001.
The central bank also said the Act further promotes greater transparency in dealings with customers and enhances the protection afforded over customers' funds handled by licensed entities.
This is supported by wider enforcement powers provided for Bank Negara to take early action against non-compliances or breaches of regulatory requirements, it said.
'In line with the efforts to further develop and modernise the industry, licensed entities that can demonstrate the financial and operational capacity to effectively manage and control risks in the business with high professional standards of conduct, will be able to expand their current scope of activities to provide a wider range of services that can include money changing, remittance and/or wholesale currency services under a single licence.
"This will be subject to compliance with minimum financial and operational standards set by Bank Negara,' it said.
The central bank said such entities would also enjoy greater operational flexibilities and be able to broaden their outreach, including through the appointment of existing smaller licensees as agents.
It said the new landscape thus provides opportunities for greater synergies to be reaped through business arrangements that are more efficient, while evolving a more advanced and viable industry that will complement the banking sector in delivering convenient and high quality financial services to individuals and businesses.
'Bank Negara has closely engaged the industry on this new regulatory framework and will support a smooth transition to the new regime.
'Access by the public to money changing and remittance services will not be affected during the transition to this new regime,' it said.
For further information on the Money Services Business Act, members of the public can contact BNMLINK at 1-300-88-5465.
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