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CORPORATE & COMMERCIAL
Operationalisation of Financial Ombudsman Scheme
As announced by Bank Negara Malaysia (“BNM”) on 28 September 2016, the Ombudsman for Financial Services (“the OFS”) will commence operations as the operator of the Financial Ombudsman Scheme effective from 1 October 2016. The OFS is approved by BNM under the Financial Services Act 2013 and Islamic Financial Services Act 2013 to provide a fair and efficient avenue with minimum formality for financial consumers to resolve disputes with financial service providers.
The OFS services are an alternative to, and not a replacement for, legal actions taken in a court of law. The types of disputes that can be referred to the OFS include disputes involving banks, insurance companies, takaful operators, development financial institutions, designated payment instrument issuers, insurance and takaful brokers and financial advisers. Disputes filed with the OFS must not exceed RM250,000. Lower limits apply for disputes on motor third party property damage insurance claims and unauthorised transactions involving payment instruments and payment channels.
Further information on the eligible disputes and procedures for bringing a dispute to the financial ombudsman scheme is available on the OFS’s website at www.ofs.org.my.
Financial Technology Regulatory Sandbox Framework
On 18 October 2016, BNM issued details of the Financial Technology Regulatory Sandbox Framework (“the Framework”). Following an earlier consultation period, the Framework aims to enable the experimentation of financial technology (“fintech”) solutions in a live environment, subject to appropriate safeguards and regulatory requirements. Additionally, the Framework aims to provide an environment that is conducive for the deployment of fintech to foster innovations in financial services that can contribute to the growth and development of Malaysia’s financial sector.
BNM has expanded the eligibility criteria to clarify the focus of innovations that the Framework aims to support. Innovations should have clear potential to:
- improve the accessibility, efficiency, security and quality of financial services;
- enhance the efficiency and effectiveness of Malaysian financial institutions’ management of risks; or
- address gaps in or open up new opportunities for financing or investments in the Malaysian economy.
Applicants to the Framework should be able to demonstrate that a product, service or solution has been developed to a functional stage and is ready for testing. Further, the applicant must have a good understanding of risks during testing, with adequate resources committed to effectively manage the risks. BNM will inform applicants of their eligibility to participate in the sandbox within 15 working days of receiving a complete application. This will be followed by preparatory engagements between BNM and the applicant prior to testing.
Guidelines on the Framework can be found at www.bnm.gov.my/guidelines/50_others/pd_regulatorysandboxframework_Oct2016.pdf.
SCM Invites public feedback on regulatory framework for trustees and custodians
On 12 October 2016, the Securities Commission Malaysia (“SCM”) published a consultation paper seeking public feedback on a proposed regulatory framework for trustees and custodians in the Malaysian capital market (“Regulatory Framework”).
By virtue of the Regulatory Framework, the SCM aims to streamline entry standards and on-going conduct obligations that will create a level playing field among trustees and custodians. Also, the SCM proposes a one-time registration to enable trustees to provide services for all capital market products instead of the current product-based registration.
The Regulatory Framework is also consistent with the SCM’s efforts to realign its regulatory approach from product-focused to intermediary/activity-focused. Some of the main focuses in the Regulatory Framework include:
- ensuring trustees and custodians prioritise investors in all of their decision-making process;
- emphasising board and management responsibilities by holding them accountable for the conduct of the registered entity and their representatives; and
- enhancing the supervision of trustees and custodians to ensure that these registered entities continue to remain fit and proper when carrying out their obligations and responsibilities in protecting investors’ rights and assets.
The consultation paper can be found at www.sc.com.my/home/consultation-papers-response-papers/.
Interested parties and the public are welcome to submit their comments and feedback by email to feedbackt&c@seccom.com.my or by sending the same to the following address before the closing date of 12 November 2016.
Supervision Department
Securities Commission Malaysia
3 Persiaran Bukit Kiara, Bukit Kiara,
50490 Kuala Lumpur
For further information regarding corporate and commercial law matters, please contact
Datin Grace C G Yeoh
gcgyeoh@shearndelamore.com
Lorraine Cheah
l_cheah@shearndelamore.com
INTELLECTUAL PROPERTY
Three-dimensional trademarks a step closer?
The recent obiter statements made by the High Court Judge in the case of Kraft Foods Schweiz Holding GmBH v Pendaftar Cap Dagangan ("Kraft case") in considering the registrability of Kraft’s 3D prism-shaped “Toblerone Chocolate Teeth” mark seem to suggest that 3D trademarks could become acceptable for registration in Malaysia.
Three-dimensional shape marks are not expressly included within the definition of a mark in Malaysia which has thus far created a lot of uncertainty in terms of the acceptability of such registrations. Under the Malaysian Trade Marks Act 1976 ("TMA"), the definition of a mark under section 3(1) includes "a device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof”. In interpreting the definition of a "mark" in the recent Kraft case, the IP Judge accepted the UK judgement in Smith Kline and French Laboratories Ltd ("Smith Kline") as being applicable on this point. The Malaysian TMA is based on the UK's Trade Mark Act 1938 (repealed) where the definition of a mark mirrors the provisions in the UK Act.
It was held in this UK case that a "mark" is one that can be represented visually and applied to the surface of the goods or incorporated in the structure of the goods. There was also nothing to exclude from the definition of a "trademark" a mark which covers the whole of the visible surface of the goods to which it is applied. Such marks are as capable of indicating a connection in the course of trade between the goods and the proprietor of the mark.
Applying the interpretation of a "mark" in the Smith Kline case, the Malaysian IP Judge took the view that 3D marks in general would also fall within the meaning of a "mark". The Judge in the Kraft case also went on to say that a 3D mark may be a "device" as a 3D mark falls within the English dictionary meaning of a "device" which expressly falls within the definition of a mark under section 3 of the TMA.
Although the Judge in the Kraft case held it was acceptable for 3D marks to fall within the definition of a "mark", Kraft’s 3D prism-shaped mark was, unfortunately, not held to be a trademark as there was nothing in the mark which would indicate a connection in the course of trade between Kraft and its goods.
In short, the less stringent interpretation of 3D shape marks by the High Court in the Kraft case suggests that the acceptability of such marks may be forthcoming. However, it remains to be seen whether in the interim the Trademark Registry will readily accept such 3D marks until express amendments to include non-traditional marks including 3D marks are made to the TMA.
For further information regarding intellectual property law matters, please contact
Karen Abraham
karen@shearndelamore.com
Indran Shanmuganathan
indran@shearndelamore.com
The Real Estate Practice Group and Corporate Practice Group of the Firm were involved in, and advised on, the following transactions that were signed on 13 October 2016:
- the joint-venture between Eco World Development Group Berhad, Retail Investment Two Pte Ltd (a wholly-owned subsidiary of Mitsui Fudosan (Asia) Pte Ltd (“MFA”)), UDA Retail Sdn Bhd (a wholly-owned subsidiary of UDA Holdings Berhad (“UDA”)) and Naungan Sentosa Sdn Bhd (a wholly-owned subsidiary of The Employees Provident Fund) in their investment in the company known as MFBBCC Retail Mall Sdn Bhd (“MFBBCC”); and
- the sale and purchase agreement between MFBBCC as purchaser, BBCC Development Sdn Bhd as developer and UDA as proprietor for the proposed acquisition by MFBBCC of strata space within the development known as “Bukit Bintang City Centre” for a consideration of RM472,482,500, for the construction by MFBBCC of a retail mall with an estimated gross floor area of 1,349,950 square feet together with 2,400 car-park bays.
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