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Cambodia: Move to unify non-banking finance regulators
A new non-banking financial services draft law designed to combine all non-banking regulators has been sent for legislative approval by Prime Minister Hun Sen during his most recent council of ministers meeting.
The Governor of the National Bank of Cambodia (NBC) Chea Chanto confirmed the legal move had been conducted in cooperation with the Ministry of Economy and Finance (MEF) and hoped it would deliver stronger economic promises for the public and private financial sector.
Director-General of the Securities and Exchange Commission (SECC) Sou Socheat said: “We have the SECC as the regulator for the security sector and the Ministry of Economy and Finance as a regulator of the real estate sector, insurance sector and trust sector.
He said that the draft law is intended to bring all regulators together under the new Non-Banking Financial Service Authority. Therefore, all regulators will be operating together inside the SECC’s new building. It has been submitted to parliament, Socheat said.
“It’s not a new regulator, nor a bank, but one authority that combines all the regulators together,” he noted.
The Non-Banking Financial Service Authority will be independent and tasked to perform duties by integrating management and control on non-banking financial sectors, involving insurance and private pensions, securities, social security, administration, accounting and auditing, real estate, mortgages and guarantees.
The aim of the draft law is to strengthen and increase the effectiveness of management, control and development of the non-banking financial sector as well as promote financial technology in the Kingdom.
Youk Chamroeunrith, Forte Insurance managing director, welcomed the move. He said that the non-banking financial sector plays an important role in the economy.
Chamroeunrith said the authority will become an independent regulator, thereby ensuring that regulation over the entire sector is performed with accuracy and consistency. “We welcomed the move. It will be of help to the other sectors,” he added.
“I believe the non-banking financial sector has developed remarkably and it is time for the government to establish this authority. If we take a look at the insurance sector, real estate and the securities sector, they are also growing year-on-year, so it is time to have one authority to manage this non-banking financial sector,” Chamroeunrith said.
“When there is a single centralised authority to manage the sector, it will grow fast which will subsequently increase the state’s revenue and allow the government to collect more taxes in return and make the sector consistent,” he added.
PPCBank’s President Chang Moo Shin viewed the draft law as an initiative to strengthen institutional mechanisms that “respond to the evolution of the non-banking financial sector”.
He said that it is an indicator that demonstrates the overall development of the financial sector, especially when financial institutions provide financial services to other financial sectors. Therefore, it ensures consistency and reduces regulatory arbitrage.
“It also reduces expenses by taking advantage of the synergy of placement in the regulatory institution under a single regulation, which strengthens the effectiveness of corporations in each sector. Under a single institution, information can be shared and can facilitate the issuance of cross-sector regulations,” he said.
MEF’s spokesman Meas Soksensan stated that the draft law will enable rapid sharing of information and better coordination to form a precursor for quick decision-making in “complex systems”.
When asked how this will improve the system, he said: “Transparency, accountability and more efficiency in terms of coordination framework. The system is built to ensure smooth functioning. Effectiveness and efficiency in operations are the objectives of its outcome.” He clarified that efficiency was in relation to time and costs.
According to the NBC, the non-banking service providers act as a third-party processor. This is an institution entrusted by an agreement with a bank and licensed by the NBC to facilitate one or more parts of an authorised bank’s services.
Source: https://www.khmertimeskh.com/50763856/move-to-unify-non-banking-finance-regulators/