Financial Services Act 2013 and Islamic Financial Services Act 2013
The Financial Services Act (FSA) and the Islamic Financial Services Act (IFSA) came into force on 30 June 2013, replacing the repealed Payment System Act 2003 (PSA). The FSA/IFSA incorporates strengthened provisions to regulate payment system operators and payment instrument issuers in order to promote safe, efficient and reliable payment systems and instruments.
- Payment systems that are considered systemically important, where the failure of the systems may cause impact to monetary and financial stability, can be designated by Bank Negara Malaysia under the act. The designation provision provides the power to Bank Negara Malaysia to exercise necessary intervention powers to ensure smooth operation and functioning of the system.
- Operators of systems that enable the transfer of funds from one banking account to another or provide payment instrument network operation will require approval from Bank Negara Malaysia to operate such systems.
- A person wishes to offer merchant acquiring services is required to be registered with Bank Negara Malaysia. These requirements replaced the existing notification regime under the PSA.
- Issuers of designated payment instruments are still required to obtain approval from Bank Negara Malaysia.
The FSA and IFSA contain provisions that enable Bank Negara Malaysia to effectively perform its oversight role. In general, this includes empowering Bank Negara Malaysia to specify standards, as well as, to issue directions, for the purpose of ensuring the safety, integrity, efficiency and reliability of the payment systems and payment instruments