BANKING AND FINANCE
AUDITS FOR BANKING AND FINANCIAL INSTITUTIONS
Prakas No. B7-017-335 Pror Kor, issued by the National Bank of Cambodia dated 14 November 2017
This Prakas, effective on 14 November 2017, sets out conditions on the accreditation of external audit firms for banks and financial institutions (“Institutions”), and obligations of accredited external audit firms and audited institutions.
This Prakas states that any companies wishing to audit institutions must apply for accreditation from the National Bank of Cambodia (“NBC”) by fulfilling certain conditions.
Any companies approved by the NBC before the issuance of this Prakas are required to re-submit an application for accreditation, in accordance with the provisions of this Prakas within six months of its entry into force.
This Prakas supersedes Circular No. B7-010-002 SRN on the Selection of Independent Auditors for Annual Audit of Banks and Financial Institutions dated 29 December 2010.
GRANTING CERTIFICATES TO RURAL CREDIT INSTITUTIONS
Prakas No. B7-017-326 Pror Kor, issued by the National Bank of Cambodia dated 25 October 2017
In order to enhance the effectiveness of the management and supervision of rural credit institutions providing small-scale credit (“RCIs”), the National Bank of Cambodia (“NBC”) has established certain terms and conditions on granting certificates to RCIs.
Effective on 25 October 2017, this Prakas provides that any person wishing to provide small-scale credit must obtain prior authorization from the NBC, having met its particular terms and conditions. RCIs may not engage in any other financial services apart from providing small-scale credit unless otherwise authorized to do so by the NBC.
Under this Prakas, where an RCI wishes to apply for an operating license to conduct micro-finance institution activities, it must satisfy certain conditions, one of which is that it has conducted rural credit operations for at least three years.
This Prakas replaces Prakas No. B7-02-49 Pror Kor on Registration and Licensing of Microfinance Institutions dated 25 February 2002.
CLIENT COMPLAINT RESOLUTION OF BANKING AND FINANCIAL INSTITUTIONS
Prakas No. B7-017-299 Pror Kor, issued by the National Bank of Cambodia dated 27 September 2017
In force since 27 September 2017, this Prakas establishes mechanisms to settle complaints from clients of banking and financial institutions (“Institutions”) in order to better protect consumers using such financial services and products.
This Prakas stipulates, among others, the client complaint management framework, complaint resolution, obligations of the Institutions to report to the NBC in connection with client complaints, termination of complaints, and the lodging of protests with the NBC. The Prakas also lists penalties that can be imposed should Institutions failing to comply with its provisions.
Institutions must create a complaint management body, operating under a policy and procedural framework, to receive, administer, and resolve client complaints. The Prakas also outlines requirements on record-keeping for client complaints, confidentiality rules, and a code of conduct on the reporting and handling of complaints in terms of conflicts of interest.
CONDITIONS FOR BANKING AND FINANCIAL INSTITUTIONS TO BE LISTED ON CAMBODIA SECURITIES EXCHANGE
Prakas No. B7-017-300 Pror Kor, issued by the National Bank of Cambodia dated 27 September 2017
In force since 27 September 2017, this Prakas aims to enable banking and financial institutions to mobilize and increase funds for business development, by being permitted to list securities on the Cambodia Securities Exchange, so as to more actively participate in the development of the Cambodian Economy.
Any institutions wishing to list securities as mentioned must obtain authorization from the NBC and satisfy certain conditions set out in this Prakas.
LIQUIDITY RISK MANAGEMENT FRAMEWORKS FOR BANKING AND FINANCIAL INSTITUTIONS
Prakas No. B7-017-301 Pror Kor, issued by the National Bank of Cambodia dated 27 September 2017
This Prakas, effective on 27 September 2017, aims to create a liquidity risk management framework for banking and financial institutions to mitigate severe liquidity problems, impacts on the banking system, and to protect depositors and lenders.
This Prakas states, among others, that the institutions must develop strategies, policies and procedures to adequately manage liquidity risk. This requires the active participation of the board of directors and senior management.
The risk liquidity management framework to be approved by the board of directors comprise a number of key elements such as (a) reporting on the risk appetite and the risk tolerance of the institutions; (b) strategies and policies for risk liquidity management; (c) operating standards of the Institutions to determine, measure, monitor, and manage liquidity risk; (d) procedures and methods for liquidity stress test and scenario analysis; and (e) capital source strategy and contingency plans.
The Prakas goes on to state that the institutions must establish leading indicators to aid the daily liquidity risk management process in order to identify, among others, vulnerabilities to the status of liquidity risk, or the Institution’s capital needs.
The institutions are required to conduct liquidity stress tests at least once a year or as often as necessary and also must develop contingency plans including policies, procedures and action plans to deal with severe impacts to their ability to provide funds for their operations in a timely manner and at an appropriate value.
CORPORATE & COMMERCIAL
LOCAL ASSOCIATIONS AND NON-GOVERNMENTAL ORGANIZATIONS
INSTRUCTIONS FOR THE ADMINISTRATION OF THE CAPITAL CITY AND PROVINCES CONCERNING ACTIVITIES OF LOCAL ASSOCIATIONS AND NON-GOVERNMENTAL ORGANIZATIONS UNDER EACH ADMINISTRATION
Notification № 1753 of the Ministry of Interior (“MOI”), dated 2 October 2017.
This Notification aims to instruct the governors on the governors’ board of the capital city and provinces in relation to the activities of local associations and non-governmental organizations (“Local NGOs”) within the administration of the capital city and provinces (“Administration”).
Through this Notification, any Local NGOs intending to conduct activities within the administrative area must notify the MOI or the Administration in writing about opening a branch to conduct certain activities three days prior to commencing such activities, attached with an activity plan. In such event, the Administration is not required to respond in writing to the Local NGOs. The Administration and other relevant authorities are empowered to stop or suspend the activities in certain situations.
THE NATIONAL SOCIAL SECURITY FUND
IMPLEMENTATION OF HEALTH CARE SCHEME THROUGH HEALTH EQUITY FUND SYSTEM FOR INFORMAL WORKERS AND PROVISION OF ADDITIONAL ALLOWANCE FOR FEMALE WORKERS GIVING BIRTH
Prakas № 404, 11 October 2017, issued by the Ministry of Labour and Vocational Training, the Ministry of Economy and Finance, and the Ministry of Health.
Prakas 404 aims to determine the implementation of the health care scheme through a health equity fund system for informal workers and the provision of an additional allowance for both informal and formal female workers upon the birth of their child. These benefits are funded through the state budget and are to be implemented starting from 1 January 2018.
For the purpose of this Prakas, informal workers refer to those that have entered into an employment contract to work for a period not exceeding eight hours per week, and casual workers. The health equity fund system refers to a funding mechanism for social health protection provided to a targeted group of citizens, allowing them to benefit from health care, free of charge, at local public health centres funded by the government.
The National Social Security Fund (“NSSF”) is the governmental agency responsible for supervision and registration of informal workers, and the payment of an additional allowance for informal and formal female workers.
Employers must register their employees with the NSSF regardless of whether they are regular or casual workers. The Prakas further emphasizes the obligation of labour contractors to register their employees with the NSSF in order for them to receive health care benefits and an additional allowance during delivery of the child. In the event of failure to register, the enterprises with whom the labour contractors have contracted must step in and fulfil the obligation to register the employees with the NSSF.
With respect to additional allowances, in order for female employees to receive the additional allowance during delivery of their child, either informal and formal female workers or their authorized representatives must report to the NSSF about the pregnancy of female employees within three months prior to the birth of the child or within one month, at the latest, from the birth of the child in the case of failing to notify the NSSF within the prescribed timeline. Of note, the NSSF subsequently issued Notification № 35/17 dated 10 November 2017 which imposes this reporting obligation on employers.
REGISTRATION OF ENTERPRISES AND THEIR EMPLOYEES WITH THE NATIONAL SOCIAL SECURITY FUND FOR PERSONS GOVERNED UNDER THE LABOUR LAW
Prakas № 448, 10 November 2017, issued by the Ministry of Labour and Vocational Training
Prakas № 448 on the Registration of Enterprises and their employees with the NSSF for persons governed by the Labour Law (“Prakas 448”). All enterprises under the Law on Social Security Schemes for Persons governed by the Labour Law (“Law on Social Security Schemes”) must immediately register themselves and their employees with the NSSF for the occupational risk scheme (covering work‐related accidents and occupational disease insurance) and healthcare scheme.
Enterprises already in operation but that have yet to register with the NSSF must do so by 10 December 2017.
Enterprises established subsequent to the issuing of Prakas 448, must register with the NSSF within 30 days from commencing commercial operations.
Additionally, enterprises must register their employees with the NSSF no more than three days after the commencement of their employment. This, however, does not include employees that already hold a valid NSSF membership card.
DETERMINATION OF RATES, FORMS, AND PROCEDURES TO CONTRIBUTE TO THE NATIONAL SOCIAL SECURITY FUND FOR THE OCCUPATIONAL RISK SCHEME AND HEALTH CARE SCHEME
Prakas № 449, 10 November 2017, issued by Ministry of Labour and Vocational Training
Prakas № 449 on the Determination of Rates, Forms, and Procedures to Contribute to NSSF for Occupational Risk Scheme and Health Care Scheme for Persons governed by the Labour Law, dated 10 November 2017 (“Prakas 449”). All enterprise must contribute payments to the NSSF within 30 days from the date of obtaining a certificate from the NSSF. As previously noted, employers must make simultaneous monthly contributions to both the occupational risk scheme and healthcare scheme no later than the 15th of the following month.
Once registered, the enterprise must pay monthly contributions to the NSSF for the occupational risk scheme. Employers must further contribute to the healthcare scheme.
Under Prakas 449, from 1 January 2018 onwards, contributions to the occupational risk scheme and the healthcare scheme for employees governed by the Cambodian Labour Law will be solely made by employers.
DETERMINATION OF MINIMUM WAGES FOR EMPLOYEES IN THE TEXTILE, GARMENT AND FOOTWEAR MANUFACTURING SECTORS FOR 2018
Prakas № 396, 5 October 2017 issued by Ministry of Labour and Vocational Training
The USD 165 per month wage level will apply to newly-hired employees during their probationary period. Upon completion of the probationary period, the employees will then be entitled to USD 170 per month. These minimum levels of wages will be effective from 1 January 2018.
Employees receiving wages based on the quantity of the products they produce (piece-workers) are entitled to wages based on the results they achieve. If the work produced exceeds the minimum wage level, the employee must receive an additional amount reflecting this. If the work produced is lower than the minimum wage level, the employer must increase the wages to meet the minimum threshold.
*The information provided is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situation.
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