BNM Shariah Advisory Council Issues Ruling on MYOR-i Reference Rate
The central bank of Malaysia (BNM) issued an update on the calculation methodology for Malaysia Islamic Overnight Rate (MYOR-i).
The Shariah Advisory Council (SAC) of BNM finalized a ruling that the new Islamic reference rate MYOR-i and its calculation methodology for both normal and contingency situations are Shariah-compliant, as it includes only Shariah-compliant transactions. Under contingency situation, BNM will calculate and publish MYOR-i based on the average MYOR-i, adjusted for any changes in the Funding Facility Profit Rate (FFPR), over the preceding three publication days. SAC has agreed to the exclusion of qard-based overnight interbank money market transaction and its hibah rates from the MYOR-i calculation methodology under normal situation. SAC also agreed to allow temporary referencing to conventional term reference rate such as Kuala Lumpur Interbank Offered Rate (KLIBOR) or other conventional term reference rates on hajah basis, until a reliable Islamic term reference rate is available. The ruling is effective in accordance with the guidelines, which will be issued by BNM at a later date and is applicable to licensed Islamic financial institutions under the Islamic Financial Services Act 2013 (IFSA), licensed banks, and licensed investment banks approved under section 15(1) of the Financial Services Act 2013 as well as to the prescribed institutions approved under section 33B(1) of the Development Financial Institutions Act 2002.
Related Links
Keywords: Asia Pacific, Malaysia, Banking, Insurance, Securities, Islamic Banking, Lending, MYOR-i, KLIBOR, Interest Rate Benchmark, Interest Rate Risk, Alternative Reference Rates, Islamic Finance, Shariah Advisory Council, BNM
Previous Article
ECB Study Assesses Impact of Basel III Finalization PackageNext Article
SARB Issues Directive on Liquidity Coverage RatioRelated Articles
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
NGFS Report Explores Quantification of Climate Risk Differentials
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
EC Publishes Results on Review of Web Accessibility Directive
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
MAS Consults on Adjustment Spreads for Conversion of SOR Contracts
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.