Print Share Financial
Stability Money Services Business (MSB) The remittance and money changing
industry in Malaysia has grown significantly in the last decade. Traditionally,
remittance service in Malaysia was provided only by the banking institutions.
With the growing importance and significance of remittance flows, in particular
remittances abroad by foreign workers in the country and the objectives to
increase access to formal remittance channels, the Bank has liberalized the
policy to allow non-bank players to provide remittance services.
The
number of non-bank remittance service providers had increased to 39 as at end
2010 from 3 as at end 2005, hence increasing the access points for remittance
services. Consequently, total outward remittance through the formal channels
had grown significantly by 119.7% to RM13.4 billion in 2010 (2005:RM6.1
billion). A more competitive environment in the remittance industry has also
contributed towards enhancing services to consumers in terms of lower cost,
faster speed and more extensive channels for remittance transactions.
The
money-changing industry has evolved over time. Over the years, the
money-changing industry has developed gradually as reflected in the increased
total turnover of exchange transactions. As at end August 2011, the total
turnover of the industry stood at RM17.7 billion, an increase of 49% from 2005.
Presently, there are over 800 licensees operating at more than 1,000 premises.
The remittance industry is regulated under the Exchange Control Act 1953 and
the Payment Systems Act 2003. Specific legislation to regulate the
money-changing industry, that is the Money-Changing Act 1998, was enacted in
March 1998. Both industries are regulated by BNM. In addition to licensed
money-changers which provide retail money changing services, Bank Negara
Malaysia also regulates currency wholesalers. The main objective of regulation
is to promote the protection of consumers though reliable, transparent and
professional conduct in the provision of remittance and money-changing
services, and preventing the industry from being used as a conduit for money
laundering and terrorist financing. In 2009, Bank Negara Malaysia initiated a
review of the legal and regulatory framework for the money changing, remittance
services and wholesale currency business industry in Malaysia, with the
objective of modernizing the industry landscape, and strengthening safeguards
to protect the integrity of the industry. The review culminated in the passing
of the Money Services Business Act 2011 (MSB) in July 2011 which provides for
the licensing, regulation and supervision of money changing, remittances and
wholesale currency business under a single Act. Collectively, these businesses
are described as money services business in the new landscape. Key Features of
New Money Services Business Landscape The MSB Act 2011 provides a single,
uniform and dedicated regulatory framework for licensees carrying on money
services business, comprising any or all of the following ; Money Changing
Business; Remittance Business, and; Wholesale Currency Business Greater
business flexibilities and opportunities including the ability to carry on
multiple business activities within a single entity for qualified entities,
thus promoting greater synergies between these activities and economies of
scale; Differentiated regulatory requirements according to the nature, scale
and complevity of an entity’s business; Strengthened safeguards to promote the
professional and sound management of the industry; and, Wide range of
enforcement actions to ensure compliance with the new Act. Financial Stability
Overview on Financial Stability What is Financial Stability? The Importance of
Financial Stability Cornerstone of Financial Stability- Supervision and
Regulation Legislative Powers to Enforce Supervisory and Regulatory Functions
Malaysian Financial Sector List of Licensed Financial Institutions List of
Approved and Registered Intermediaries List of Financial Holding Companies Key
Financial Indicators Industry Associations & Training Institutions Islamic
Banking & Takaful Malaysia International Islamic Financial Centre
Development Financial Institutions List of Development Financial Institutions
Prudential Regulation Monetary Penalty Review Committee Supervision Market
Conduct Money Services Business About Money Services Business Legislation &
Guidelines MSB Forms Existing Regulatees Companies no longer carrying out money
services business Contact for Enquiries Anti Money Laundering & Counter
Financing of Terrorism
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