October

BNM announced the establishment of the KLIBOR Transition Coordination Committee and four working groups under the FMC. These groups comprise diverse representatives and are tasked with the broad objective of supporting an orderly transition from KLIBOR to MYOR / MYOR-i and developing the recommendations through robust consultations.

To further guide market participants, a transition roadmap has also been published. The roadmap outlines key timelines and milestones for the transition from KLIBOR to MYOR / MYOR-i. To accelerate industry-wide adoption of MYOR-i, BNM plans to mandate the use of MYOR-i for Islamic financial products starting from 1 July 2027, in line with the cessation of KLIBOR across all new financial products.^*

A box article "Transition from KLIBOR to MYOR / MYOR-i" has also been published in conjunction with BNM Financial Stability Review (FSR) 1H 2025.

July

FMC members were updated on the progress of establishing the working groups, including the appointment of leads and co-leads, as well as the Terms of Reference (TOR).

April

FMC members deliberated on the key outcomes of the discussion paper on "Proposed Full Transition to MYOR / MYOR-i and Cessation of KLIBOR". The feedback indicated broad support for the proposed transition plans and strategies. In addition, FMC members supported the establishment of dedicated working groups to coordinate the transition.

^* Exceptions may be granted for specific products or purposes (e.g. risk management of existing positions throughout the transition).

September

BNM, in consultation with the FMC, published a discussion paper to solicit public feedback on the proposed transition from KLIBOR to MYOR / MYOR-i. The paper attracted views from a broad spectrum of stakeholders—including banks, development financial institutions, insurance companies, asset managers, corporates, and other financial market participants—on the potential implications, operational challenges, and market readiness for the transition. The findings from this paper also served to inform the development of the transition roadmap.

November

FMC members noted several key observations, including the declining proportion of term tenors in the interbank volume underpinning KLIBOR submissions, which prompted a reassessment of the multiple-rate approach. Members also discussed potential strategies to reinvigorate the development of the MYOR / MYOR-i. It was observed that the continued coexistence of KLIBOR, along with MYOR / MYOR-i, under the multiple-rate approach, may hinder broader adoption of MYOR / MYOR-i. FMC members suggested exploring the publication of an industry transition timeline following a market-wide survey.

April

FMC members acknowledged progress in supporting MYOR derivatives trading, including:

• inclusion of MYOR in the ISDA Interest Rate Derivatives Definitions.
• circulation of recommended conventions by the Financial Market Association Malaysia (FMAM) for derivatives, namely MYOR interest rate swap, MYOR-KLIBOR basis swap and SOFR-MYOR cross currency basis swap, among members.

January

Effective 1 January 2023, the publication of the 2- and 12-month KLIBOR, the least referenced rates in the market for financial contracts, was discontinued.

March

BNM launched MYOR-i, the world’s first transaction-based Islamic benchmark rate, marking a significant milestone in the development of the Islamic financial market. MYOR-i was developed in collaboration with the FMC and the AIBIM-FMAM Islamic Market Technical and Development Committee (IMTDC), replacing the Kuala Lumpur Islamic Reference Rate (KLIRR). KLIRR was discontinued with immediate effect due to its low usage and lack of compliance with global standards for financial benchmarks.

In conjunction with the launch, BNM published the MYOR-i Policy Document, outlining its key features and governance framework.

October

The Shariah Advisory Council (SAC) of BNM, at its 218th meeting, issued a ruling in respect of the new Islamic reference rate i.e. MYOR-i. The SAC ruling clarified the Shariah status of the calculation methodology for MYOR-i under both normal and contingency situations. This ruling took effect in accordance with the MYOR-i policy document issued by BNM.

September

BNM launched MYOR as the new ARR for Malaysia, in line with global benchmark reforms to promote more robust, transaction-based reference rates. The MYOR will run in parallel to KLIBOR (i.e. a multiple-rate approach) with periodic reviews to ensure that the financial benchmark rates remain robust and reflective of an active underlying market.

In conjunction with the launch, BNM published the MYOR Policy Document, which incorporates key features and governance standards developed in collaboration with the FMC following a robust public consultation process.

July - August

FMC members were presented with the results of the public consultation on ARR, KLIBOR and KLIRR. Taking into consideration of public responses, FMC endorsed the key features of ARR and the way forward for KLIBOR and KLIRR.

May

BNM issued a discussion paper outlining the proposed design and features pertaining to the development of an ARR, potential enhancements to KLIBOR and a review of the Kuala Lumpur Islamic Reference Rate (KLIRR).

December

BNM appointed the FMC to oversee the development of transaction-based Alternative Reference Rate (ARR) for Malaysia and to assess the continuity of KLIBOR. Globally, ARRs are being introduced to improve the integrity of financial benchmarks as part of the global financial benchmark reform.

Following the cessation of LIBOR, the SAC has ruled that adopting Alternative Reference Rates (ARR) as a replacement for LIBOR is permissible. SAC also ruled that the compounded methodology is purely arithmetic and does not affect the shariah compliance of the transaction and any uncertainty (gharar) from adoption of average ARR or backward looking term rate is mitigated via proper determination and disclosure of the ceiling price and payment formula.