Featured Product

    BNM Proposes Regulatory Sandbox Framework, Announces ASEAN Taxonomy V2

    March 30, 2023

    The Bank Negara Malaysia (BNM) published the financial stability review for the second half of 2022 and issued an exposure draft on the fintech regulatory sandbox framework. Additionally, the ASEAN Taxonomy Board, representing ASEAN finance sectoral bodies, released Version 2 of the ASEAN Taxonomy for Sustainable Finance.

    The financial stability review highlights that market conditions have remained orderly despite the heightened volatility in domestic financial markets. The report suggests that sound risk management practices of financial institutions, coupled with their strong capital and liquidity buffers, will continue to preserve domestic financial stability. Latest stress tests conducted by BNM affirm the resilience of financial institutions against unexpected losses from severe macroeconomic and financial shocks. The report indicates that operational and cyber resilience remains a top priority for BNM and financial institutions amid the increase in digitalization and technology adoption in finance. Moreover, BNM will also continue working with financial institutions to strengthen climate risk management practices and support greater access to transition finance.

    With respect to the Regulatory Sandbox Framework, BNM is seeking views, until May 30, 2023, on the proposals to issue a new Financial Technology Regulatory Sandbox Framework policy document, which contains enhancements to the policy document of the same name issued on October 18, 2016. The framework was first introduced in October 2016 to provide a regulatory environment that is conducive for the deployment of fintech and to facilitate meaningful innovation in the Malaysian financial sector. The proposed enhancements are focused at ensuring proportionate regulatory facilitation and improving operational efficiency of the existing sandbox procedures by

    • simplifying the sandbox’s Stage 1 (eligibility) assessment, and
    • introducing an Innovation Green Lane, which aims to provide a risk-proportionate and accelerated pathway for innovative solutions by financial institutions with strong risk management capabilities.

    The Version 2 of ASEAN Taxonomy for Sustainable Finance consists of the complete foundation framework comprising detailed methodologies for assessing economic activities and Technical Screening Criteria (TSC) for the first focus sector—that is, Energy sector under the Plus Standard. With the release of Version 2, the ASEAN Taxonomy Board demonstrates its commitment to providing stakeholders with a common framework that is science-based, while being inclusive and catering to the different development stages of ASEAN member states. Following the release of Version 2, the Board will hold targeted consultations with key stakeholders on the assessment methodology as well as the metrics and TSC for the Energy sector under the Plus Standard. Following these consultations, the Board intends to finalize the TSC for the Energy sector in early 2024. TSCs for the remaining five focus sectors—Agriculture, forestry and fishing; manufacturing; transportation and storage; water supply, sewerage and waste management; and construction and real estate—covered under the Plus Standard will be released in phases, with TSC for all six focus sectors finalized by 2025.

     

    Related Links

    Keywords: Asia Pacific, Malaysia, Banking, Financial Stability Review, Basel, Climate Change Risk, ESG, Asean Taxonomy, Regtech, Regulatory Sandbox, Fintech, Sustainable Finance, Taxonomy, BNM

    Featured Experts
    Related Articles
    News

    EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis

    The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.

    November 28, 2023 WebPage Regulatory News
    News

    EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules

    The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.

    October 31, 2023 WebPage Regulatory News
    News

    BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks

    As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.

    October 19, 2023 WebPage Regulatory News
    News

    BCBS and EBA Publish Results of Basel III Monitoring Exercise

    The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.

    October 18, 2023 WebPage Regulatory News
    News

    PRA Updates Timeline for Final Basel III Rules, Issues Other Updates

    The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.

    October 18, 2023 WebPage Regulatory News
    News

    US Treasury Sets Out Principles for Net-Zero Financing

    The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.

    October 17, 2023 WebPage Regulatory News
    News

    EC Launches Survey on G7 Principles on Generative AI

    The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.

    October 14, 2023 WebPage Regulatory News
    News

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News
    News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News
    News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8938