What bothers a compliance officer when dealing with BNM, SC?

One major issue is the over-burdening of FIs with compliance reporting

by HABHAJAN SINGH / TMR file pix

There is new-found vigour and excitement for compliance folks in the local financial institutions (FIs). This is only to be expected with the advent of what is being called the “New Malaysia”.

At the same time, there is also desperation as the fraternity tries to juggle their day-to-day challenges in the face of what some deem as an overkill in the area of regulatory compliance.

Compliance-related officials who spoke to The Malaysian Reserve are urging the regulators, primarily Bank Negara Malaysia (BNM) and the Securities Commission Malaysia (SC), to re-examine some of their approaches when dealing with banks and other institutions under their surveillance.

One major issue that cropped up was the over-burdening of FIs with compliance reporting. Compliance officials also raised the question on the level of industry knowledge and competency of officers from the regulatory bodies. On the talent front, the sector is facing scarcity that is further exacerbated by continuous attrition due to increasing work pressure.

“No one doubts the role of the regulator, but I think we need a fresh approach,” a compliance officer, who declined to be named, said ahead of a two-day major gathering of the fraternity in Kuala Lumpur.

The International Conference on Financial Crime and Terrorism Financing (IFCTF) 2018, organised by the Asian Institute of Finance and Compliance Officers Networking Group Malaysia, begins today.

Carrying the theme “The Rising Voice of Compliance: Towards Greater Governance And Transparency”, this will be the first big gathering of compliance-related officials after the fall of Barisan Nasional in the May 2018 general election. When IFCTF 2017 took place about the same time last year, Datuk Seri Mohd Najib Razak was the prime minister and Tan Sri Muhammad Ibrahim was the governor of BNM.

Datuk Nor Shamsiah Mohd Yunus, who assumed the top job at BNM effective July 1, will present a keynote address titled, “Reshaping Malaysia’s Future: Setting the Goal for Greater Governance and Transparency”.

When asked what were the stress points of their job when it comes to regulation, a number of compliancerelated officials said there were some overlaps in audit between BNM and SC.

“They are supposed to work together in some areas, but it looks like it’s not happening as much as we would like it to be,” the official said.

The two regulators have, in the past, announced initiatives to work together. In 2012, for example, BNM and the SC signed a new memorandum of understanding (MoU) for an enhanced scope of collaboration and cooperation, focusing on common areas of interests which are important to promote the financial sector and capital market stability.

The MoU was supposed to build on and further strengthen earlier such agreements signed between the two institutions in 2002 and 2007, according to a previous statement from the SC.

In this particular MoU, the statement said the areas covered include formulation of legislation and policies, regulation and supervision of entities which come under the joint regulatory oversight of BNM and the SC, supervision of payment system, mutual recognition of financial planners and financial advisors, and the conduct of investigation and enforcement actions.

On competency, some compliance officials claimed that regulators at times dispatch officers who may not have full and proper grasp of the matter at hand.

“On a particular matter, they may send a junior staff. It takes a lot of time and resources on our part, sometimes, to bring them up to speed. And you pray they frame the report correctly,” a compliance-related official said.

At the IFCTF 2018, participants are expected to discuss various issues, including international bribery and corruption, ultimate beneficial ownership, the Dark and Deep Web, cryptocurrencies and terrorism threats.