The Malaysian financial regulatory authority (BNM) has a wide variety of powers. Its primary goal is to keep financial services providers accountable, professional, and fair. It also enforces laws governing financial institutions. Infractions are punishable by steep fines. For example, financial institutions are prohibited from influencing consumers in any way, collaborating with other financial institutions, and fixing terms or features of financial products.
The Financial Services Act 2013 (FSA) combines several separate laws and regulations to form a single regulatory body. It governs capital markets, exchange controls, issuances of securities, and takeovers. The Act also sets guidelines and practice notes for the industry. All of these are vital to the functioning of the financial industry.
In addition to overseeing the Malaysian financial system, BNM also advises the government on macroeconomic policy. It also manages the country’s public debt and currency reserves. As a statutory body, BNM reports to the Minister of Finance. Its other responsibilities include regulating financial institutions, monitoring money markets, and supervising foreign exchange markets.
Payments systems are regulated under the Payment Systems Act 2003, which is an act that sets legal guidelines for the payments system in Malaysia. These laws are designed to promote efficiency, stability, and confidence in the payments system. The Act categorizes payment systems in Malaysia into four main categories: Real-Time Electronic Transfer of Funds and Securities, National Image-Based Check Settlement System, and Automated Teller Machines, or ATMs.