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Regulation of Banking and Finance Industry (Composition of Banking System…
Regulation of Banking and Finance Industry
Sources of Banking Law
Written Law
Federal Constitutions
- Supreme Law
State Constitutions
Federal & State Legislation
Fed: enact by Parliament
State: State Legislative Assembly
Subsidiary Legislation
- proclamations, rules, regulations, orders, notifications, by-laws under ordinance and enactment
Unwritten
Law
English Common Law & Equity
Judicial precedents
Previous decisions of court judge on similar situations
Decision by higher courts are bound to own previous decisions
Custom
- Behaviour that's specific to a society, place or time
Native Law
- religion & matrimonial matters
Composition of
Banking System
CB, commercial banks, other FIs (inv banks, offshore, foreign bank)
BNM
Apex of monetray and banking system
Regulate and supervise Malaysian banking system exclude offshore banks
2 categories:
Monetary institutions: BNM, CB, IB, International Islamic Banks
Non-monetary institutions:Inv banks, development financial institutions money brokers, others
BAFIA 1989
Purpose:
Soundness and stability of BAF system
FSA & IFSA 2013
effort to modernize law - ensure laws to be relevant and effective to..
maintain
financial stability
support inclusive
growth
in financial system and economy
provide adequate
protection
for
customers
Provide
BNM regulatory and supervisory oversight
- to fulfill broad
mandate
within a more complex and interconnected environment
Important:
respond effectively to new and emerging
risks
-
confidence
in financial system preserved -
critical financial intermediation
activities
not disrupted
BNM
Objective
Promote
monetary and financial
stability
Ensure Malaysia's financial structure
develop soundly
Functions
Report to
MOF
- monetary and financial sectors policies
Develop
financial system structures and necessary institutions (BNM)
Gov banker and advisor
- macroeconomic policies & public debt
Banker
to commercial banks & other FIs
Issue
currency
and maintain sound currency
Regulate and supervise
FI
Oversight over
money and FOREX
Oversight over
payment system
Sound, progressive, inclusive
financial system
Malaysia foreign reserves
Commercial
Banks
Saving facilities
Payment facilities
Loan and credit facilities
Finance gov
Banking services
Finance
Companies
Consumer credit: Hire purchase, leasing, factoring, block discounting, housing and personal loans
Money changing facilities and performance gaurantee
x CA facilities
MESDAQ
3 modes of allocating shares: public ballot, private placement, combi both
Approved as stock exchange; supervised by SC
Securities Commission (SC)
Regulation and development of securities industry, future and option mkt, UT, Property trust schemes, co takeovers, and mergers
SC - supervise capital market
BNM - banking system and money market