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In view of the rapid changes in the Malaysian digital landscape and its potential impact on the digital economy, the Central Bank of Malaysia (Bank Negara Malaysia or "BNM") has recently issued the following policy documents to serve as guidance to financial institutions:
- BNM Policy Document on Outsourcing, which came into effect on 1 January 2019; and
- BNM Policy Document on Publishing Open Data Using Open Application Programming Interface (“API”), which came into effect on 2 January 2019.
The Policy Document on Outsourcing sets out the scope of arrangements relevant to the outsourcing requirements and expectations on financial institutions to maintain appropriate internal governance and outsourcing risks frameworks, including those relevant to the protection of data confidentiality, and serves to ensure the continued ability of BNM to carry out effective supervisory oversight over financial institutions in relation to their outsourced activities.
The Policy Document on Publishing Open Data Using Open API in turn provides guidance on the standardisation of development and publication of Open Application Programming Interface, i.e. an API which allows third party access to the data of a software application and which may be subject to a set of protocols specified by Open API publisher ("Open API").
The Policy Document is intended to enhance third party developers’ access to open data published by financial institutions, and seeks to encourage financial institutions to adopt the Open Data API specifications on selected product information developed by select Open API implementation groups. Financial institutions are therefore encouraged to adopt these specifications to ensure industry-wide publication of standardised Open Data API.
Following the issuance of Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, the SC recently revised and issued the Guidelines on Recognized Markets on 31 January 2019 (the "Guidelines").
The Guidelines seek to introduce new requirements for the establishment and operation of digital asset exchange operators with a view of facilitating the trade of digital assets (which include digital currencies and digital tokens). In light of this, any person who is interested in operating a digital asset exchange is required to apply to be registered with the SC as a "Recognised Market Operator" ("RMOs").
The new regulatory framework represents SC's efforts to ensure that investors are protected in trading digital assets while promoting innovation.
In addition, the Guidelines also aim to:
- introduce new requirements for all RMOs in relation to outsourcing, directors and submission of rules;
- clarify the ongoing obligations of the RMOs; and
- enhance clarity and ensure consistency in the provisions, by making certain editorial amendments.
Further, on 6 March 2019, SC issued two public consultation papers in order to seek public feedback on its proposed regulatory frameworks, namely the Public Consultation Paper No. 1/2019 in respect of the Proposed Regulatory Framework for the Issuance of Digital Assets Through Initial Coin Offerings (ICOs) and the Public Consultation Paper No. 2/2019 for the Proposed Regulatory Framework for Property Crowdfunding. Public feedback and comments were required to be submitted to the SC by 29 March 2019.
The Ministry of Energy, Science, Technology, Environment and Climate Change ("MESTECC") has set an ambitious goal for 20% of the country's electricity to be generated from renewable sources by 2030, an increase from the previous 2%. Among some of the steps taken to achieve that goal is the recently launched 3rd bidding round for large scale solar photovoltaic plants ("LSS3"), under which MESTECC has called for bids for an estimated RM2 billion worth of solar projects, and the improved net energy metering scheme ("NEM Scheme").
The LSS3 is a tender process in which interested parties who have purchased tender documents will have the opportunity to submit bids to the Energy Commission of Malaysia for the development of solar power projects in Peninsular Malaysia. The total aggregate capacity made available under LSS3 is 500MWa.c., with the reference price being RM0.3240/kWh (approximately USD0.24/kWh). The bid closing date is 19 August 2019 and results are expected to be announced within the first quarter of 2020.
A new feature of the NEM Scheme is that it now allows third parties to participate as investor/asset owner to assist electricity consumers in alleviating the cost of developing, installing and owning solar PV systems. The investor / asset owner is expected to participate through either of the following business models: (i) solar lease, where the investor / asset owner owns the solar PV system and leases it to the electricity consumer who pays the investor / asset owner a fixed lease fee; (ii) power purchase agreement, where the investor / asset owner owns, develops, and finances the solar PV system’s installation, recovering its cost through the sale of energy output generated from the solar PV system to the electricity consumer at contracted rates; or (iii) a hybrid of the solar lease and the power purchase agreement.
On 9 January 2019, the Court of Appeal held that it is not a mandatory requirement for an adjudication decision to be registered under section 28 of the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") before a statutory notice of demand to wind up a company under the Companies Act 2016 can be issued to the losing party company in the adjudication proceedings. The Court of Appeal highlighted that the main issue was whether the losing party company was indebted to the petitioner (of the winding up petition) and that it was unable to pay its debt to the petitioner. The Court of Appeal further opined that the successful litigant in the adjudication proceedings (the petitioner) can rely on section 31 (2) of CIPAA which provides that "remedies provided by CIPAA are without prejudice to other remedies available in the construction contract or any written law…".
The Federal Court in the recent land scam case of Rajamani Meyappa Chettiar [2019] 3 CLJ 441 held that a replacement title in continuation (issued in the name of the original owner of the land) is not void ab initio (from the beginning) even if the land registry had been duped into issuing it – and this replacement title (in continuation) is valid and capable of validly passing title to the land to a subsequent purchaser in good faith and for valuable consideration within the meaning of the proviso to Section 340(3) of the National Land Code. The Apex Court ruled that the land title would be void ab initio (from the beginning) if and only if the land registry had issued the title in the name of a third party (not the original owner). In acknowledging that the Torrens system of land registration (as applied in Peninsular Malaysia) is predominantly a purchaser's system, the Apex Court emphasised that the law favours the subsequent purchaser in good faith and for valuable consideration, as in all other countries applying the Torrens system.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Christopher & Lee Ong
Level 22, Axiata Tower ,
No. 9 Jalan Stesen Sentral 5
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50470 Kuala Lumpur, Malaysia
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Contacts: Yon See TingPartnerD +603 2278 8311F +603 2278 8322see.ting.yon@christopherleeong.comLee Hock ChyeManaging PartnerD +603 2273 1919F +603 2273 8310hock.chye.lee@christopherleeong.comFiona SequerahPartnerD +603 7958 8310F +603 7958 8311fiona.sequerah@christopherleeong.comLim Wee HannPartnerD +65 62320606wee.hann.lim@rajahtann.comYau Yee MingPartnerD +603 2278 8311F +603 2273 8322yee.ming.yau@christopherleeong.comKuok Yew ChenPartnerD +603 7958 8310F +603 7958 8311yew.chen.kuok@christopherleeong.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
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