Following feedback on its exposure draft, Bank Negara Malaysia (BNM) has issued a revised policy document on recovery planning that is applicable to the following financial institutions (FIs):
- banks and investments banks licensed under the Financial Services Act 2013;
- Islamic banks licensed under the Islamic Financial Services Act 2013; and
- financial holding companies of the aforementioned licensed entities.
The policy document, which came into effect on 28 July 2021, sets out the regulator's expectations and policy requirements for the development and maintenance of recovery plans for FIs.
Pursuant to the policy document, FIs are required to identify and plan for the execution of a suite of recovery options to restore long-term viability under a range of idiosyncratic and system-wide stress events.
BNM has indicated that resolution planning seeks to facilitate the effective use of available resolution powers by Perbadanan Insurans Deposit Malaysia, the enabling resolution authority, to identify in advance a feasible and credible resolution strategy for each FI and an operational plan for its implementation.
For further information on this topic please contact Pamela Kung at Shearn Delamore & Co by telephone (+60 3 2027 2911) or email ([email protected]). The Shearn Delamore & Co website can be accessed at www.shearndelamore.com.