On 27 December 2019, the Central Bank of Malaysia (Bank Negara Malaysia or "BNM") issued an Exposure Draft on the proposed Licensing Framework for Digital Banks in Malaysia ("Exposure Draft").
The Exposure Draft outlines the licensing framework for persons who wish to carry on a "digital banking business" or "Islamic digital banking business". The aforesaid terms are defined as a banking or Islamic banking business (as defined in the Financial Services Act 2013 and Islamic Financial Services Act 2013, or "FSA" and "IFSA", respectively) which is carried on primarily or wholly through digital or electronic means.
Some key points addressed in the Exposure Draft include the following:
- in assessing whether an applicant fulfils the "best interest of Malaysia" criteria (which is one of the factors considered by BNM when assessing an application for a banking licence), the applicant is required to demonstrate a commitment to drive financial inclusion, including ensuring quality access and responsible usage of financial services, particularly to underserved and hard-to-reach segments that may be unserved;
- during the first three to five years of operations ("Foundational Phase"), the licensed digital bank must maintain at all times a minimum amount of capital funds of RM100 million, subject to an asset limit of RM2 billion;
- licensed digital banks will generally be subject to the same regulatory requirements that apply to licensed banks/licensed Islamic banks. However, during the Foundational Phase, the licensed digital bank will enjoy simplified regulatory requirements for the areas identified in the Exposure Draft; and
- to "graduate" from the Foundational Phase, the licensed digital bank may make an application to BNM after the first three years of operations, subject to the fulfilment of the relevant criteria identified in the Exposure Draft.
BNM will accept public feedback on the Exposure Draft until 28 February 2020. Applications for the digital banking licence will open upon issuance of the final Policy Document, whereupon BNM has stated that it intends to issue up to five licences to qualified applicants.
Shortly before the 2018 Malaysian general elections, the Anti-Fake News Act 2018 (“Fake News Act”) was passed in Parliament amidst criticisms that it would be used as a tool by the (then) government to curtail freedom of speech ahead of the general elections. Under the Fake News Act, those found guilty of spreading “fake news” could be jailed for up to six years and subject to a fine of up to RM500,000.
On 19 December 2019, the Anti-Fake News (Repeal) Bill 2018 (“Repeal Bill”) was approved by the Dewan Negara (i.e. the Senate). This is the second time the Repeal Bill has been tabled before the Senate, as when it was initially passed by the Dewan Rakyat (i.e. the House of Representatives) in August 2018, it was rejected by the Senate in September of the same year.
This is in accordance with Article 68 of the Federal Consitution of Malaysia which enables the retabling of a bill that has been rejected by the Senate after a prescribed cooling-off period of one year.
It is not known when the Repeal Bill will be gazetted. However, it should be noted that this Bill expressly provides that: (i) the Repeal Act will not affect any orders and/or any applications for an order made under the Fake News Act prior to the coming into force of the Repeal Act; and (ii) on the coming into force of the Repeal Act, any investigations, prosecution or proceedings in respect of any offence which was pending under the Fake News Act may be continued.
In recognising the need for different frequency ranges to deliver widespread coverage of broadband services in Malaysia, and to meet the requirements of future networks and 5G services, the Malaysian Communications and Multimedia Commission ("MCMC") issued its final report on the allocation of spectrum bands for mobile broadband services in Malaysia ("Report") following a public inquiry process conducted earlier in 2019.
In its Report, the MCMC identified the following bands to be the pioneer spectrum bands in Malaysia for the roll out of 5G:
- 700 MHz;
- 3.4 GHz to 3.6 GHz ("3.5GHz"); and
- 24.9 GHz to 28.1 GHx ("26GHz and 28GHz").
The existing allocation for deployment of current 4G technology, including the existing allocation of the 2300 MHz and 2600 MHz bands, will be maintained until December 2021 pending maturity of these bands for 5G.
According to the Report, assignment for the 700MHz and 3.5GHz bands will be made through a tender process and allocated to a single entity comprising a consortium formed by multiple licensees, instead of allocating these bands to individual licensees.
The said tender process is expected to commence in the first quarter of 2020, where 2x30 MHz of the 700 MHz band and 100 MHz of the 3.5 GHz band will be made available by the MCMC. The remaining frequencies within the 700 MHz and 3.5 GHz bands will be considered for assignment at a future date.
The 26GHz and 28GHz bands will be assigned using different methods depending on the frequency range. In this regard, four blocks of 400 MHz in the frequency range of 24.9 GHz to 26.5 GHz will be assigned through a tender process to licensees on a nationwide basis, whereas the remaining four blocks of 400 MHz in the frequency range of 26.5 GHz to 28.1 GHz will be assigned based on a first-come first-served basis and will be open to any party, including non-licensees, for the purpose of deploying localised and/or private networks.
The tender process for the frequency range of 24.9 GHz to 26.5 GHz is expected to commence during the first quarter of 2020. A successful party in the tender process will not be eligible to apply for the remaining frequency range of 26.5 GHz to 28.1 GHz.
In respect of the roll out for the first two bands of 700 MHz and 3.5 GHz, the MCMC has rationalised the awarding of the spectrum for 5G to a single consortium in order to make the rollout of 5G more cost and resource effective, as it not only reduces redundancies but also translates to more affordable 5G for consumers. The MCMC has committed to continue monitoring costs and what is transferred to the consumer, with the criteria for the corporate structure of 5G consortiums to be revealed in March or April 2020.
In the landmark Federal Court decision in Jack-In Pile (M) Sdn Bhd v Bauer (Malaysia) Sdn Bhd & another appeal [2020] 1 CLJ 299, it was held that the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") applies prospectively and therefore does not apply retrospectively to construction contracts which were entered into before the coming into operation of the CIPAA. The CIPAA came into operation on 15 April 2014, and was enacted for the purpose of facilitating regular and timely payment, to provide a mechanism for speedy dispute resolution through adjudication and to provide remedies for the recovery of payment in the construction industry. Essentially, the Federal Court held that:
- if a legislation is intended to have retrospective effect, it must be clearly stated by express provisions within the Act itself; and
- in the absence of express words to such effect, a statute, whether it is procedural or substantive in nature, cannot be applied retrospectively to impair a substantive right. The CIPAA does not contain any provision suggesting that it has retrospective effect. Furthermore, if the CIPAA were to apply retrospectively, it would affect the substantive right of parties. An illustration of this is section 35 of the CIPAA which prohibits the use of "pay-when-paid" clauses, which were commonly used prior to the CIPAA being enacted. Traditionally, parties had the right to include a "pay-when-paid" clause with the effect that the main contractor was not obliged to make payment to the sub-contractor until the main contractor has received payment from the employer for the related progress payment. With section 35 of the CIPAA, such clauses are now void. If section 35 of the CIPAA has retrospective effect, it would have impaired the parties' substantive right – the right of freedom to contract vis-à-vis the use of the "pay-when-paid" clauses, a right which existed prior to the coming into operation of the CIPAA. Accordingly, the CIPAA should not have retrospective effect.
This appeal concerned the judicial review of a tribunals' decision to award liquidated damages to purchasers of a property for the developer's delay in delivering vacant possession of the property. The Court of Appeal gave effect to the express provision in the sale and purchase agreement ("SPA") of the parties, which stated that time for delivery of vacant possession was 24 months from the date of the SPA.
The effect of this decision is that the Court of Appeal is seen to have departed from two previous Supreme Court decisions in Hoo See Sen & Anor v Public Bank Bhd & Anor [1988] 1 CLJ (Rep) 125 and Faber Union Sdn Bhd v Chew Nyat Shong & Anor [1995] 3 CLJ 797 which held that the time for the delivery of vacant possession starts to run from the date when the purchaser pays the booking fee. The grounds for the Court of Appeal decision include, among other things, the following:
- the provision in the SPA related to the time for the delivery of vacant possession was clear and unambiguous and was in the prescribed form provide in Schedule G to the Housing Development (Control and Licensing) Regulations 1989 ("Schedule G"). The courts therefore need not resort to case law to interpret the time for delivery of vacant possession;
- the role of a tribunal is distinct from a court of law, and as such, it should have applied the provision of the SPA as it was, and should not have referred to judicial interpretation when the meaning of the provision was clear; and
- the two previous Supreme Court decisions were distinguished on the basis that the case of Hoo See Sen (which was followed in Chew Nyat Shong) was prior to the coming into effect of Schedule G.
This decision has been seen to provide clarity to developers and purchasers as to when vacant possession of a property must be delivered. This in turn minimises the exposure of developers to liability in paying liquidated damages as the time for the delivery of vacant possession starts to run from the date of the SPA and not an earlier date such as the date on which the booking fee is paid.
