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

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582