BNM published an exposure draft setting out the revised expectations from the licensed banks and licensed investment banks that enter into repurchase agreement (repo) transactions. This policy document is applicable to repo transactions involving Ringgit and non-Ringgit Repo securities and reverse repo transactions including any outright sale or purchase of repo securities with an intention to repurchase or resell these repo securities at a future date. The response period for the consultation ends on September 13, 2019.
The policy document on repo transactions seeks to set out the scope of repo transactions that can be conducted by licensed banks and licensed investment banks, to set out regulatory requirements and expectations in relation to repo transactions entered into by licensed banks and licensed investment banks, and to promote sound risk management practices by licensed banks and licensed investment banks for the conduct of repo transactions. Revisions to the policy document comprise primarily of the following:
- Extension of the maximum tenor of a repo to 5 years from 365 days
- Expansion of eligible securities to accord flexibility to market participants in their conduct of repo transactions
- Removal of subjection to Malaysian Annex
This document will supersede the policy document on repurchase agreement transactions (BNM/RH/PD 032-3), which was issued on July 31, 2015. The revised policy document shall come into effect on date of publication of the final policy. This policy document must be read together with other policy documents and guidelines of BNM, particularly the capital adequacy framework (Basel II – Risk Weighted Assets) issued on May 03, 2019; the single counterparty exposure limit requirements issued on July 09, 2014; the Foreign Exchange Administration rules; the Code of Conduct for Malaysia Wholesale Financial Markets issued on April 13, 2017; the net stable funding ratio requirements issued on July 31, 2019; and the STATsmart reporting requirements.
Comment Due Date: September 13, 2019
Keywords: Asia Pacific, Malaysia, Banking, REPO, Repurchase Agreement, BNM
Previous ArticleEBA Single Rulebook Q&A: First Update for May 2019
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.