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In a recent landmark decision, the Federal Court resolved several critical issues on pre-emptive rights and shareholders’ approval impacting Malaysia’s corporate governance landscape.
In Concrete Parade Sdn. Bhd. v Apex Equity Holdings Berhad & Others, the Federal Court overturned the earlier Court of Appeal decision, and affirmed the High Court decision on the interpretation of sections 85(1) and 223(1) of the Companies 2016 (“CA 2016”). These sections respectively provide for shareholders’ pre-emptive rights and the requirement to procure shareholders’ approval for an acquisition or disposal of a company’s property or undertaking of a substantial value or portion.
The decision provides clarity on the approach to be adopted when there appears to be statutory constraints under the CA 2016 that may limit the operational and expansion capabilities of a company. It highlights the importance of striking a balance between the rights and interests of shareholders, powers of directors and commercial interests of a company. In this article, we will be examining the Federal Court’s decision and its impact on managing the complexities of corporate governance.
Background of the case
Concrete Parade Sdn. Bhd. (“Concrete Parade”), a shareholder of Apex Equity Holdings Berhad (“Apex Equity”), commenced a lawsuit against Apex Equity and 15 other defendants for minority oppression under section 346 of the CA2016. The lawsuit was due to the following transactions:
- share buy-back transactions conducted by Apex Equity between 2005 and 2017; and
- proposed merger of the stockbroking businesses of Mercury Securities Sdn. Bhd. (“Mercury Securities”) and JF Apex Securities Berhad (“JF Apex”), a subsidiary of Apex Equity. The merger involved (i) cash consideration of RM48 million, funded by issuance of new Apex Equity shares through private placement with other defendants (including Mercury Securities), and (ii) non-cash consideration of RM92 million in the form of new Apex Equity shares issued to Mercury Securities (collectively, the “Mercury Transaction”).
Under the Mercury Transaction, Apex Equity, JF Apex and Mercury Securities entered into a business merger agreement (“BMA”) which sets out conditions precedent to be satisfied before the Mercury Transaction can be completed, including obtaining approval of the existing shareholders of Apex Equity for the Mercury Transaction. Such shareholders’ approval was obtained only after the execution of the BMA. The same conditions precedent in the BMA are applicable in the individual share subscription agreements (“SSA”) executed in relation to the private placements.
Prior to the execution of the BMA, Apex Equity and Mercury Securities entered into a heads of agreement (“HOA”), which sets out the salient terms of the BMA, including the condition precedent relating to the approval of the existing shareholders of Apex Equity for the Mercury Transaction. The HOA is expressed to be legally binding.
Concrete Parade claimed the following:
- Contravention of section 85(1) of the CA 2016 – the proposed private placement exercise has dilutive effects on the respective shareholdings of the existing shareholders of Apex Equity. Further, there was no resolution expressly asking such shareholders to waive their pre-emptive rights prior to approving the Mercury Transaction.
- Contravention of Section 223(1) of the CA 2016 – the HOA does not contain shareholders’ approval as a condition precedent. No shareholders’ approval was obtained prior to the execution of the BMA.
Decision by the Federal Court
Section 85(1) of the CA 2016: What constitutes a waiver of pre-emptive rights?
Section 85(1) provides that where a company issues new shares which rank equally to existing shares as to voting or distribution rights, the company must first offer the new shares to the existing shareholders on a pro rata basis, unless otherwise provided in the company’s constitution. This provision safeguards the existing shareholders from a dilution in share ownership, as a result of the company issuing new shares to raise capital.
Under the constitution of Apex Equity, any issuance of new shares or other convertible securities by Apex Equity is subject to any “direction to the contrary” given by the shareholders of Apex Equity. The Federal Court held that the shareholders’ approval for the Mercury Transaction constitutes a valid “direction to the contrary” and hence amounts to waiver of pre-emptive rights.
The court ruled on the grounds that:
- Pre-emptive rights under section 85(1) are not absolute mandatory legal rights. Section 85(1) only grants statutory privilege for the existing shareholders of a company to maintain their proportional ownership in the company. Pre-emptive rights can be waived by the shareholders if the company’s constitution (which represents the contractual position between the shareholders and the company as well as among the shareholders themselves) allows so.
- There is no need for the shareholders’ resolution to expressly set out all requisite information regarding pre-emptive rights under section 85(1) (including what amounts to a waiver of such rights and the consequences of doing so). It is also not necessary for the existing shareholders to expressly stipulate their consent to waive their pre-emptive rights, as the shareholders would have known the dilutive effects of a proposed corporate transaction that involves issuance of new shares when they voted in favour of it.
- It is not practical to offer new shares to the existing shareholders of a company and obtain their approval prior to entering into any agreement that sets out the terms for a corporate transaction which will only be performed and carried into effect upon satisfaction of certain conditions. This would only delay or prolong negotiations and potentially result in abortion of the corporate transaction.
Section 223(1) of the CA 2016: When to obtain shareholders’ approval?
Section 223(1) provides that the directors of a company shall not enter or carry into effect any arrangement or transaction for the acquisition or disposal of an undertaking or property of a substantial value or portion unless:
- the entering into such arrangement or transaction is made subject to the shareholders’ approval by way of resolution; or
- the carrying into effect of such arrangement or transaction has been approved by the shareholders by way of resolution.
This case raises the question on the precise point in time when directors of a company are to obtain shareholders’ approval in relation to the acquisition or disposal of assets within the company.
In reversing the Court of Appeal’s decision, the Federal Court held that shareholders’ approval should not be obtained twice – first, prior to the entry into an agreement for such acquisition or disposal, and second, prior to effecting such acquisition or disposal. This was on the basis that shareholders cannot be giving approval without the full terms of the agreement having been worked out and fair comprehension of the proposed transaction. The need to procure two sets of shareholders’ approval on the same transaction would affect the business efficacy and performance of the company. It is sufficient to just have one set of shareholders’ approval, either by entering into an agreement that contains a condition precedent to obtain shareholders’ approval or by obtaining shareholders’ approval before ownership of asset is effectively acquired or divested.
Concrete Parade claimed that the contravention of section 223(1) was due to the execution of the HOA and the BMA. The Federal Court agreed with the High Court that the HOA is a mere record of the mutual understanding between Apex Equity and Mercury Securities in respect of the Mercury Transaction (including the execution of the BMA). It does not have any effect of creating enforceable obligations on Apex Equity to acquire the shares of Mercury Securities through JF Apex. Hence, the HOA does not need to contain a condition precedent to obtain shareholders’ approval. The Federal Court disagreed with the Court of Appeal that the execution of the BMA was the carrying into effect of the HOA and prior shareholder’s approval should be obtained. According to the Federal Court, the BMA contained a condition precedent to obtain shareholders’ approval and its execution cannot possibly have the effect of carrying into effect of the HOA and the Mercury Transaction. Thus, no shareholders’ approval is required prior to the execution of the BMA.
Commentary
The Federal Court’s decision is significant as it highlights the importance of striking a balance between the rights and interests of shareholders, the powers of directors and the commercial interests of a company. It provides pragmatic guidance to companies navigating the complexities of corporate governance.
From a practical standpoint, it is not feasible for a company to notify its shareholders of any intention to enter into a corporate transaction (including fundraising exercise that involves issuance of new shares and acquisition or disposal of assets) and seek their approval even before negotiations begin. The terms of such transaction are agreed upon in term sheets or similar agreements. Opportunities for growth will slip away if the company delays its expression of interest to partake in a corporate transaction due to any setback in getting votes from shareholders in a short span of time. Further, especially if the company is publicly listed, any early announcement for such intention to enter into a corporate transaction will excite the market even before any agreement is entered into, resulting in share price fluctuation which may adversely affect the bargaining position of parties to the transaction and create deal uncertainty.
If you have any questions or require any additional information, please contact Chan Xian Ai, or the Zaid Ibrahim & Co (in association with KPMG Law) partner you usually deal with. This article was prepared with the assistance of Jean Lee Jia Ying, Senior Associate at Zaid Ibrahim & Co (in association with KPMG Law).
Latest Developments On Pre-Emptive Rights And Shareholders’ Approval Under Companies Act 2016
What’s changed?
Since June 2023, the EU has implemented the European Union Deforestation Regulation (EUDR) aimed at mitigating deforestation and forest degradation associated with certain commodities, including palm oil.
What this means for Malaysian palm oil businesses
Under the new Regulation, Malaysian palm oil businesses that export their commodities covered by the EUDR into the EU market must prove that their products are both deforestation-free and compliant with relevant local laws.
These businesses will have until 30 December 2024 to ensure that their products meet these new requirements, a failure of which will result in a loss of market access in the EU.
Key compliance requirements
- Due diligence statement
Before placing goods into the EU market, the EUDR requires businesses to produce a due diligence statement. This statement needs to expressly confirm, that due diligence has been conducted and no or only a negligible risk of deforestation and incompliance with the legislation of the country of production of the commodities have been identified.
The due diligence statement requires three main steps to be completed:
- Reporting Obligations
Businesses must also report their due diligence systems yearly and keep documentation related to due diligence for at least five years.
Penalties for non-compliance
The EUDR places significant penalties on businesses that fail to comply with the Regulation including having their products confiscated and facing fines of at least 4% of a business’ annual turnover in the EU. More severely, violations of the EUDR can lead to businesses being denied access to the EU market.
How we can help
The required due diligence statement under the EUDR can be a complex and challenging task for palm oil businesses. It requires a comprehensive collection, management and analysis of data and information extending to individual raw material producers, which must be disseminated throughout the entire value chain.
With only six months to go before these requirements are mandatory by law, our team of experts can help your business be fully equipped to meet EUDR obligations and maintain continued success in the EU market.
If you have any questions or require any additional information, please contact Chan Xian Ai, or the Zaid Ibrahim & Co (in association with KPMG Law) partner you usually deal with.
How the New EU Deforestation Regulation Affects Your Palm Oil Business
In the second edition of the KPMG Intellectual Property Newsletter for 2024, our Senior Associate, Stanley Lee, has contributed an article on dealing with employee-generated IP in Malaysia. The article explores key issues pertaining to ownership of IP assets created by employees, including some pointers for employers to consider before entering into a Confidential Information and Invention Assignment Agreement (“CIIAA”) with an employee based in Malaysia.
KPMG Intellectual Property Newsletter Edition 2, 2024
This article highlights predictions from Global KPMG Legal Services leadership from around the world on how data, privacy and cyber security issues will affect the future of legal functions and legal practice. As predictions, they are not intended to guarantee any future outcomes.
Today’s legal teams are challenged by rapid technological innovations. Generative artificial intelligence (gen AI) and other new technologies are being adopted across legal functions and broader businesses at breakneck speed. While productivity is being pushed to new heights, organizations are being exposed to a new range of risks, including data privacy breaches, loss of attorney-client privilege, heightened regulatory scrutiny, ransomware and related reputational damage.
At the same time, new abilities to access, manipulate and analyze huge pools of data are compelling legal professionals, regulators and policy innovators to balance technology’s potential to drive positive social change against the dangers of exposing large swathes of sensitive personal information.
How will these trends reshape the legal functions of the future? Here are KPMG professionals’ top five predictions:
1. As gen AI becomes ever more embedded into legal function processes, legal teams will need to understand how and when to keep humans in the loop to maintain the skills needed to guard against the related risks.
The application of gen AI and other new technologies to legal work will significantly increase efficiency and productivity. These gains will grow as legal professionals get more comfortable with these powerful solutions and continue to develop more constructive ways to employ them.
Dependence on gen AI will grow apace, however, and legal teams will need to stay vigilant about the attendant risks. For example, using gen AI to inform legal advice could lead to data breaches that could affect privilege. And eventually, as gen AI subsumes ever more routine legal activities previously done by junior lawyers and paralegals, there will be fewer people in the organization with the skills to do that type of work.
Legal professionals will need to avoid the tendency to simply accept that a computer’s output is correct without questioning the reasoning behind it. They will need to develop the skills to work backwards from the output to explain how a legal conclusion was derived and independently verify whether it is accurate. Attorneys will also need to be purposeful in determining which processes are a good fit for AI and where they still need to maintain the skills to verify the legitimacy and accuracy of AI output.
2. A raft of new legislation will emerge to address a wide array of AI-related issues.
As new AI legislation is enacted, legal teams will move beyond building AI for their own use cases to advising their businesses on the AI implementation. Legal departments will need to understand all of these different rules so they can establish legal frameworks that enable the organization to innovate and use AI. This use must follow ever-evolving new laws and regulations and must proceed in a safe and trusted way.
Within these frameworks, legal teams need to set business-optimized guardrails so they can make the most of business opportunities while preventing their organizations from incurring risk.
Smart use of technology will be a key to managing these new compliance obligations. gen AI and large language model AI can ingest, decipher, summarize and automate data and regulatory and compliance rules to a much wider degree than any current technology. Legal professionals who learn how to use technology for both improving productivity and policing its use will have a distinct competitive advantage.
3. Privacy laws and approaches to open data innovation will continue to diverge. The more AI is relied on, the more the risks increase, leading to more rigorous requirements aimed at protecting personal data on one hand while enabling its use for productivity gains and positive social change on the other.
Revolutionary AI systems have enormous potential to help solve various societal problems, such as disease and vendor diversity-based discrimination. However, these systems require copious amounts of personal data to create reliable statistical conclusions, raising issues about whether the right permissions and safeguards are in place for processing that data.
Regulatory restrictions on data usage, such as data localization and data sovereignty rules, will continue to increase. However, there will be some push and pull as some jurisdictions, such as the UK, attempt to simplify those rules in order to encourage innovation, sharing of data and open data. For example, the EU Data Act aims to allow public authorities to make public data available for purposes of the wider community via a public data trust.
Legal teams are likely to increase their use of AI-enabled privacy technology to demonstrate compliance as new data protection legislation comes onstream. This technology can also make legal data analysis more efficient and ultimately help make legal decisions more consistent.
4. With gen AI’s ability to create and transform, data sources will become more opaque and harder to trace, leading to more data privacy and intellectual property disputes.
As machine learning, large language models and gen AI continue to advance and collect huge volumes of data, it will become increasingly difficult to trace and verify the sources used to train these technologies. Currently, we have seen disputes over AI’s use of copyrighted texts and artworks in generating new works. The inability to prove who “owns” a source of original data could frustrate attempts to gain intellectual property protection for AI-generated results.
Challenges in tracing data could also cause companies to run afoul of data privacy legislation by hampering their ability to comply with legislated data subject rights, such as access or erasure requests.
In-house privacy teams will need to expand their focus to streamline processes and controls and adapt to AI-related risks and regulations. Legal departments will also need to have the ability to quickly develop internal policies, procedures and controls to keep up with the pace of new usage.
5. Legal departments will be on the front lines of defending against cyber attacks and upholding organizational resilience.
Cyber security threats are likely to multiply in the future as cyber criminals become adept at using gen AI for writing ransomware, bypassing protections, spreading misinformation and other offences. Legal teams will be called on to respond to these risks on a number of fronts by:
- advising companies on consistent policies for responding to and dealing with ransomware attacks
- working with in-house technology or operational teams to implement or adopt appropriate cybersecurity technology to protect the organization’s data (in compliance with stricter data protection/cyber security laws).
- educating people across the company on cyber risks, including the guardrails needed to mitigate those risks and what red flags to watch out for
- ensuring that the people responsible for complying with data security and privacy legislation:
- have the skills to understand the sources of cyber risks and related safeguards
- maintain their human connections within the organization so they can ensure AI uses remain safe and secure.
Governments can also be expected to get involved to ensure businesses in their jurisdiction have appropriate cyber security policies and governance in place. In the near future, we are likely to see legislation enacted to mandate organizational resilience on adopting stronger cyber security technology and efficient response to cyber security breach. Legal professionals will need to help their organizations develop approaches to complying with these rules.
This article is prepared by Usman Wahid, Partner, Head of Technology Law at KPMG Law in the UK; Nadarashnaraj Sargunaraj, Head of Technology, Privacy and Cybersecurity, Zaid Ibrahim & Co. (in association with KPMG Law); and Isabel Simpson, Partner, Data Protection, Technology and Telecommunications Practice Group lead, EMA.
5 predictions: How AI, data privacy and cyber security could transform legal practices
The Companies (Amendment) Act 2024 (“Amendment Act”) brings about a raft of changes to the current Companies Act 2016 (“Companies Act”). The amendments establish the disclosure and reporting framework for beneficial ownership in companies; strengthen the existing provisions in relation to corporate governance, schemes of compromise or arrangement and corporate rescue mechanisms; and introduces a new Division 9 on protection for essential goods and services.
The Amendment Act was gazetted in February 2024 and is expected to come into force in 2024. Companies in Malaysia, in particular foreign companies, will need to familiarise themselves with the new provisions and ensure compliance with the new legal requirements, while also leveraging any opportunities presented by the enhanced corporate governance framework and corporate rescue mechanisms.
Definition of “beneficial owner"
Prior to the Amendment Act, the Companies Act interpreted “beneficial owner” as the ultimate holder of the shares and excludes any nominee of any description.
The new interpretation now distinguishes between the beneficial owner in relation to shares, and beneficial owner in relation to a company. Notably, the existing definition of a beneficial owner in relation to shares remains unaltered.
Beneficial ownership reporting framework
A new Division 8A, encompassing sections 60A to 60E, in relation to beneficial ownership of a company has now been introduced.
The new section 60A(1) specifies that a person is considered as a beneficial owner of a company if he is a natural person who ultimately owns or controls over a company, and includes those who exercises ultimate effective control over a company. Note that reference to a “company” also includes reference to a “foreign company”. Additionally, section 60A(2) grants the Registrar of the Companies Commission of Malaysia ("Registrar") the authority to establish guidelines for the identification of a company's beneficial owner.
Prior to the Amendment Act, the Companies Act was silent on any register of beneficial owners. The new section 60(B) sets out the requirements in relation to the beneficial owners register (“BO Register”) of a company.
In relation to the BO Register, note that:
Non-compliance with these requirements by the company and its officers constitutes an offence. Upon conviction, the company and/or its officers can be fined up to RM20,000, with an additional daily fine of up to RM500 for a continuing offence. Prior to the amendments, while both the Companies Act[1] and the Beneficial Ownership Guidelines[2] outlined this obligation, they did not enforce non-compliance as an offence.
In addition, section 60(B) also:
Company to require disclosure of beneficial owner of company
The new section 60(C) requires any member of the company to inform the company whether they are a beneficial owner of the company. If they are not, they would have to provide particulars sufficient to enable persons to be identified as the beneficial owners of the company and any other information as specified in section 60B(1). An important implication of this change is that a trust company which holds shares on behalf of individuals or entities would be considered as legal owners of the shares, and hence, may be obligated to disclose the beneficial ownership of the trust company itself.
Notices in relation to the identity of beneficial owner
When a company possesses knowledge or reasonable grounds to believe that an individual is a beneficial owner, sections 60C(1)-(3) obliges the company to issue a written notice. Once the information has been provided, they have 14 days from the date when the information was received to record it in the BO register.
Notice must also be given to the beneficial owner of the company with regards to any changes to the particulars of a beneficial owner listed in the register. If the company has reasonable grounds to believe that a change has occurred, it must notify the beneficial owner to confirm the change and provide the relevant details. Similarly, if there are reasonable grounds to suspect inaccuracies in the particulars listed, the company must notify the beneficial owner to confirm or correct the information. This ensures transparency and accountability by compelling companies to actively seek and confirm beneficial ownership information.
In addition, a company and every officer who contravenes sections 60C(1)-(6) commits an offence. Violating any notice under section 60C is an offence, unless they can demonstrate that the company is already in possession of the relevant information or that the request for information was frivolous or vexatious. False statements or recklessly providing false information while purportedly complying with a notice issued is also considered an offense.
Duty of beneficial owner of company to provide information
Any individual who believes they are a beneficial owner of a company must promptly inform the company and provide the required information. Beneficial owners are also obligated to update the company about any changes in their details listed in the BO Register. Furthermore, if a person ceases to be a beneficial owner, they must promptly notify the company, specifying the cessation date and relevant details. Violation of the provisions outlined in section 60D constitutes an offence. However, it is worth noting that the Minister has the authority to exempt certain categories of companies from complying with the new Division 8A. This exemption can be granted through an official order published in the Gazette, with or without conditions, as long as these companies are already subject to similar requirements under other laws.
Beneficial Ownership of foreign company
A new section 573A clarifies that the provisions relating to beneficial ownership in Division 8A is also applicable to all foreign companies. In addition, section 576(2), detailing the content of an annual return for foreign companies, requires beneficial ownership information and address of where the BO Register is maintained if it differs from the foreign company's registered office.
Enhancements on Corporate Rescue Mechanism
In summary, the Amendment Act sets out changes relating to compromise or arrangement provisions under Division 7 - Charges, Arrangement and Reconstructions and Receivership, and Subdivision 2 Arrangements and Reconstruction. Key changes include the following:
Amended provisions on Judicial Management orders
In summary, Division 8 - Corporate Rescue Mechanism, Subdivision 2 Judicial Management of the Companies Act has been amended to include the following:
New protection for essential goods and services provisions
The new Division 9 of the Companies Act introduces protective measures for suppliers of essential goods and services in commercial contracts. The automatic exercise of insolvency-related clauses against companies for the supply of such goods and services is prohibited. Suppliers must notify the company at least 30 days in writing before exercising insolvency-related clauses. This aims to promote communication and potential resolution. The new section 430A(3) ensures that suppliers can still exercise other contractual rights, including payment for essential goods and services. Further, "insolvency-related clauses" are defined comprehensively, encompassing terms that allow automatic termination or modification due to the company's involvement in compromise, arrangement, voluntary arrangement, or judicial management. "Essential goods and services" are specified in the Ninth Schedule, namely the supply of water, electricity or gas, point of sale terminals, computer software and hardware, information, advice and technical assistance in connection with the use of information technology, data storage and processing and website hosting.
Conclusion
With regards to the beneficial ownership framework, the new provisions bring about amore comprehensive beneficial ownership reporting framework under the Companies Act as well as to address the gaps identified by the Financial Action Task Force (FATF) through the Malaysian Mutual Evaluation Report published in 2015 (MER 2015).[3] The new amendments are critical to prepare Malaysia, a member of the FATF and the Asia Pacific Group on Money Laundering for the upcoming Mutual Evaluation exercise starting from 2024 to 2025.[4] To minimise the risks faced by companies in Malaysia against illicit activities, the new provisions relating to the beneficial ownership reporting framework aims to promote corporate transparency through a disclosure regime, in line with the current international standards and best practices.
The separate objectives of the Amendment Act in relation to corporate rescue mechanisms and protection for essential goods and services aim to maintain a balance between the interests of suppliers and companies, offering clear guidelines and stability in crucial supply chains during insolvency-related difficulties. It serves to protect companies in Malaysia by regulating insolvency-related clauses in contracts for the supply of essential goods and services. It is crucial for businesses to comprehend and follow these rules for successful management of commercial partnerships.
If you have any questions or require any additional information, please contact Chan Xian Ai, or the Zaid Ibrahim & Co (in association with KPMG Law) partner you usually deal with. This article was prepared with the assistance of Sarah Menon, an Associate at Zaid Ibrahim & Co (in association with KPMG Law).
This alert is for general information only and is not a substitute for legal advice.
[1] Section 56 of the Companies Act 2016.
[2] Guideline for the Reporting Framework for Beneficial Ownership of Legal Persons.
[3] FATF, ‘Anti-money laundering and counter-terrorist financing measures Malaysia Mutual Evaluation Report’ (Sept 2015) <https://www.fatf-gafi.org/content/dam/fatf-gafi/mer/Mutual-Evaluation-Report-Malaysia-2015.pdf>.
[4] Bank Negara Malaysia, ‘Preparation for Malaysia's Mutual Evaluation 2024-2025’ (7 June 2023) <https://amlcft.bnm.gov.my/documents/6312201/10624487/Preparation+of+Malaysia%27s+MEE+2024-2025.pdf/ea9e1196-17bb-db01-2614-c9902446dc58?t=1686211932154>.
Beneficial ownership reporting framework and other changes to the Companies Act 2016
The Blueprint for Advancing Good Regulatory Practices in the APEC Region was published in November 2023 to propel regulatory practices in the 21st century. Our Partner and Head of the Government Advisory practice, Mohamad Izahar Mohamad Izham will examine and outline the core GRP principles in the Blueprint with commentary on its applicability in the Malaysian context.
From Policy to Practice: Examining APEC’s Good Regulatory Practices Blueprint
In the first edition of the KPMG Intellectual Property Newsletter for 2024, our Senior Associate, Stanley Lee, has contributed an article on measures to curb illegal streaming in Malaysia. The article looks at recent amendments to the Copyright Act 1987 to tackle the growing problem of online piracy of copyrighted media.
KPMG Intellectual Property Newsletter Edition 1, 2024
With the constant evolution of technology, the regulatory landscape has evolved to accommodate the dynamic nature of financial technology. Regulatory bodies are actively engaging in dialogue with industry players to ensure that the sector is up to date and relevant while maintaining the integrity of the financial system.
The regulatory environment in Malaysia reflects a balance between fostering technological advancements and safeguarding the interests of both businesses and consumers in the rapidly evolving fintech ecosystem. In this article Jonathan Lim Hon Kiat, Co-Head Corporate TMT team highlights the key regulatory developments in Malaysia in 2023.