Law Reform and Government Advisory

As 2025 starts off with major geopolitical changes in the world and Malaysia takes the Chair for ASEAN, there are exciting developments in Malaysia that will impact businesses and FDI. We would like to update our clients on the major legislative updates to look out for particularly in the tax and energy space, as well as new opportunities in the state of Johor through the Johor-Singapore Special Economic Zone, a recap on the National Semiconductor Strategy and the focus on private equity.

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The Malaysia Competition Commission (MyCC) is conducting an online public consultation to obtain feedback on the proposed integration of Competition Impact Assessment (CIA) into Regulatory Impact Analysis (RIA). The aim of the consultation is to oversee the integration of CIA into RIA and its importance to the rule making process. This ensures that new regulations issued (or review of existing regulations) comply with competition law and are in line with Good Regulatory Practice (GRP). The consultation is to allow stakeholders to understand the framework of CIA and obtain feedback to better understand the needs, concerns and perspectives of regulators.  

The “Consultation Session for the Proposed Integration of Competition Impact Assessment (CIA) into Regulatory Impact Analysis (RIA)” is available both in English and Bahasa Malaysia.  

In addition to submitting general feedback, there is also a survey titled “Survey for Consultation Session for the Proposed Integration of Competition Impact Assessment (CIA) into Regulatory Impact Analysis (RIA)” available both in English and Bahasa Malaysia.

What is Regulatory Impact Analysis (RIA)?

Regulatory Impact Analysis or “RIA” is the process of systematically analysing and communicating the impacts of proposed regulations or review of existing regulations. The essential characteristic of RIA is its informed and evidence-based decision-making for regulatory intervention through analysis of problems and solution options, stakeholder consultation, a cost-benefit analysis, and implementation strategy.

What is Competition Impact Assessment (CIA)?

Competition Impact Assessment or “CIA” is the process of examining the competition effects of laws and regulations to ensure that they are pro-competitive. This integration process intends to show the regulators the methodology that can be adopted to examine the laws and regulations.

CIA is important to ensure that the laws and regulations do not bring unnecessary restraints to competition and help find alternatives that could still achieve the same objectives the regulators had intended to gain.

CIA Integration into RIA

It is important to note that CIA is already an existing component under the RIA framework as provided under the National Policy on Good Regulatory Practice (NPGRP). It is only a matter of putting into effect this requirement after over a decade of Good Regulatory Practice (GRP) implementation in Malaysia.

To support the integration, MyCC has developed a comprehensive toolkit comprising three main components:

• Part I: CIA Framework;
• Part II: CIA Checklist (for the initial screening process); and
• Part III: CIA Guideline (to assist regulators in preparing CIA).

Part I: CIA Framework

The current RIA process currently entails three stages:

• Stage 1: Digital Regulatory Notification (DRN)
• Stage 2: Initial Assessment Stage
• Stage 3: Final Assessment Stage

To incorporate CIA, the current three-stage process will remain but there will be some changes in each stage, as illustrated below.

Source:  Consultation for the Proposed Integration of Competition Impact Assessment (CIA) intoRegulatory Impact Analysis (RIA)

Part II: CIA Checklist

The CIA Checklist is a set of four main questions each with sub-questions to assist regulators in identifying potential competition concerns early in the policy development process i.e. during Stage 1: Digital Regulatory Notification (DRN).  

In the event that the CIA Checklist is triggered i.e. the questions are answered in the affirmative, further investigation of the anti-competitive practices would be required in Stage 2: Initial Assessment Stage.

Part III: CIA Guideline

The CIA Guideline is a detailed technical document on competition assessment which contains key questions to be considered when performing CIA. The CIA Guideline includes requirements that needs to be fulfilled by regulators when the CIA Checklist is triggered.

These requirements are to be undertaken during Stage 2: Initial Assessment Stage and specifically apply for Element 3: Options and Element 4:Impact Analysis of the RIA process.

The consultation is open from 13 June 2023 until 21 July 2023.

For more details on the consultation document, including the survey and feedback submission, please visit Malaysia Productivity Corporation’s Unified Public Consultation (UPC) portal here.

Recently, there has been a shift from traditional regulatory reform (which focuses on reviewing existing legislation and improving them by way of amendments or new laws) towards non-regulatory solutions (such as using behavioural sciences to revise policy framework). This is a global widespread phenomenon where even ASEAN countries are not oblivious to its impact.

In this article, our Partner and Head of the Corporate & Government Advisory practice, Mohamad Izahar Mohamad Izham and Associate Amiza binti Ahmad Murad will uncover among others, the application of Behavioural Insights among the ASEAN countries, and lessons learned from Behavioural Insights projects in select countries.