Bank Negara Malaysia (BNM) had, on 11 July 2024, imposed Administrative Monetary Penalties (AMP)^[1] on four financial institutions^[2] (Table 1) for non-compliance with sections 143(3)(b) and 143(4) of the Financial Services Act 2013 (FSA) and/or sections 155(3)(b) and 155(4) of the Islamic Financial Services Act 2013 (IFSA) regarding the submission of information to BNM, read together with the requirements under the following Policy Documents (PD):

1. STATsmart Reporting – Financial, Compliance and Industry Specific Data (STATsmart PD) issued on 1 June 2022;
2. External Sector Statistics (ESS) System – Submission of International Transactions and External Position Information Policy Document (ESS PD) issued on 31 January 2022 and revised on 1 November 2022; and
3. Central Credit Reference Information System (CCRIS) – Requirements on the Submission, Usage and Protection of Credit Information (CCRIS PD) issued on 29 January 2021.

Under these requirements, the financial institutions are required to submit timely^[3], accurate and complete^[4] data, as specified in the policy documents.

Timely, accurate and complete statistical data submitted by financial institutions is important to support BNM’s surveillance and policy formulation to safeguard monetary and financial stability. The data is also relied upon for key monetary and financial statistics published by BNM. As such, financial institutions must ensure that their internal systems and operational procedures are sufficiently robust for timely and accurate statistical reporting to BNM, effectively resolve data issues at source and maintain adequate resources to manage financial institutions’ reporting obligations.

The financial institutions committed non-compliances associated with late, incomplete and/or inaccurate submissions of critical data related to financial and payments, external assets and liabilities, cash balance of payments and borrower’s credit information, which may impact analysis, decision-making and publications by BNM. Common root causes of these non-compliances include unresolved issues affecting financial institutions’ internal IT systems, incorrect application of statistical requirements and inadequate operating procedures. The financial institutions have taken remedial steps to address these issues, including system enhancements, strengthened processes for validating submissions and providing additional staff training. Erroneous submissions have been fully rectified and did not affect releases of aggregate data by BNM for the relevant reporting periods.

The AMP amounts were determined by considering relevant aggravating and mitigating factors as well as the representations made by the financial institutions, which include:

1. Past compliance records; and
2. Post-misconduct behaviour, such as timely rectification of non-compliance and remedial measures taken by the financial institutions.

The financial institutions paid the respective AMP amounts imposed by BNM, as listed in Table 1.

Table 1: List of the Four Financial Institutions

The enforcement actions taken align with the approach and processes outlined in the Enforcement Approach document.

^[1] BNM imposed the AMP pursuant to subparagraph 24(3)(b)(i) of the FSA and subparagraph 245(3)(b)(i) of the IFSA.

^[2] The enforcement actions taken against these 4 financial institutions are arising from the same reporting cycle as the enforcement action published on 6 May 2024 against 14 other financial institutions.

^[3] All data submitted to BNM shall be submitted within the specified timeline and frequency as required under subsection 143(4) of the FSA and subsection 155(4) of the IFSA read together with the following provisions of the respective policy documents:

1. Paragraphs 9.1, 17.1, 17.2, 17.10, 23.1, 28 and Table 1 of Part D of STATsmart PD;
2. Paragraphs 3.2 and 3.3 of Part I (External Assets and Liabilities (EAL)) and paragraph 3.3, Table 1 and paragraph 3.6 of Part C (Cash Balance of Payments (Cash BOP)) of the ESS PD; and
3. Paragraphs 21.1, 21.5 and 21.6 of the CCRIS PD.

^[4] All data submitted to BNM shall be accurate and complete as required under paragraph 143(3)(b) of the FSA and paragraph 155(3)(b) of the IFSA read together with the following provisions of the respective policy documents:

1. Paragraphs 9.1, 23.3, 27.1 and Table 1 of Part D of STATsmart PD;
2. Paragraph 3.2 of Part I (EAL) and paragraph 3.3, Table 1 and paragraph 3.4 of Part C (Cash BOP) of the ESS PD; and
3. Paragraphs 21.1, 21.2 and 21.5 of the CCRIS PD