Featured Product

    BNM Launches MYOR and Consults on MYOR-i Reference Rates in Malaysia

    September 24, 2021

    The Central Bank of Malaysia (BNM) announced the launch of Malaysian Overnight Rate (MYOR) as the new alternative reference rate for Malaysia. In conjunction with the launch, BNM has published a policy document on MYOR. The policy document sets out the benchmark design, methodology, and governance framework to ensure the integrity and credibility of MYOR. As per the policy, BNM will administer and calculate MYOR as the volume-weighted average rate of unsecured overnight Ringgit interbank transactions, including the overnight monetary operations of BNM (excluding Standing Facilities). BNM will conduct periodic reviews of the MYOR to ensure it remains robust and representative of conditions in the underlying market. This policy document came into effect on September 24, 2021.

    BNM has published another policy document that sets out requirements to be observed by the Kuala Lumpur Interbank Offered Rate (KLIBOR) submitters and the designated KLIBOR distributor in undertaking the KLIBOR rate-setting process. This policy document comes into effect on September 30, 2021. In Malaysia, the MYOR will run in parallel to the existing KLIBOR, with periodic reviews to ensure that the financial benchmark rates remain robust and reflective of an active underlying market. This multiple-rate approach is supported by the Financial Stability Board (FSB) and adopted by many other jurisdictions. BNM also announced that it will discontinue, on January 01, 2023, the publication of the two- and twelve-month KLIBOR tenors, which are the least referenced rates in the market for financial contracts. The remaining one-, three-, and six-month KLIBOR tenors, which continue to reflect an active underlying market, will be reviewed in the second half of 2022. Any updates from the review will be communicated thereafter. The Financial Markets Committee will engage the International Swaps and Derivatives Association (ISDA) to ensure continuity of KLIBOR derivatives contracts in the event of a temporary or permanent discontinuation of KLIBOR publication.

    As part of ongoing efforts to further develop the Islamic financial market, BNM, in collaboration with the Financial Markets Committee and the AIBIM-FMAM Islamic Market Technical and Development Committee, will develop a new Islamic benchmark rate (Malaysia Islamic Overnight Rate or MYOR-i) to replace the Kuala Lumpur Islamic Reference Rate (KLIRR) by the first half of 2022. In this regard, BNM has published an exposure draft that sets out the benchmark design, methodology, and governance framework to ensure the integrity and credibility of Malaysia Islamic Overnight Rate (MYOR-i). BNM is requesting responses on the exposure draft by October 25, 2021. In a separate joint statement, BNM and the Bank of Thailand (BOT) invited banking institutions from Malaysia and Thailand to indicate their interest to be a Qualified ASEAN Bank (QAB) in Malaysia and Thailand. Banking institutions have been invited pursuant to the bilateral arrangement under the Association of Southeast Asian Nations (ASEAN) Banking Integration Framework between BNM and BOT, which concluded in April 2019.

     

    Related Links

    Comment Due Date: October 25, 2021 (MYOR-i)

    Effective Date: September 24, 2021 (MYOR)/September 30, 2021 (KLIBOR rate-setting)

    Keywords: Asia Pacific, Malaysia, Thailand, Banking, Securities, MYOR, KLIBOR, Interest Rate Benchmarks, Interest Rate Risk, Alternative Reference Rates, Islamic Finance, MYOR-I, ASEAN, Qualified ASEAN Bank, Benchmark Reforms, BOT, BNM

    Related Articles
    News

    PRA and FPC Finalize Changes to Leverage Ratio Framework in UK

    The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA

    October 08, 2021 WebPage Regulatory News
    News

    CFPB Proposes Rule on Small Business Lending Data Collection

    The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.

    October 08, 2021 WebPage Regulatory News
    News

    PRA Decides to Maintain O-SII Buffers for Another Year

    The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.

    October 08, 2021 WebPage Regulatory News
    News

    FSB Report Assesses Implementation of Recommendations on Stablecoins

    The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.

    October 07, 2021 WebPage Regulatory News
    News

    APRA Updates Loan Serviceability Expectations for Home Lending

    In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.

    October 06, 2021 WebPage Regulatory News
    News

    CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.

    October 06, 2021 WebPage Regulatory News
    News

    EBA and EIOPA Set Out Work Priorities for 2022

    The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.

    October 05, 2021 WebPage Regulatory News
    News

    MFSA Issues Reporting Updates and Guidance for Banks

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.

    October 05, 2021 WebPage Regulatory News
    News

    EC Publishes Decision on List of Equivalent Third Countries Under CRR

    The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).

    October 04, 2021 WebPage Regulatory News
    News

    EC Rule on Contractual Recognition of Write-Down and Conversion Powers

    EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.

    October 04, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7552