Parliament makes MMA licence mandatory for money exchange businesses

Parliament on Wednesday passed an amendment to the Foreign Exchange Act requiring businesses to obtain a licence from the Maldives Monetary Authority (MMA) before conducting money exchange operations in the country.

The amendment was among three changes proposed by Funadhoo MP Mohamed Mamdooh of the ruling People’s National Congress (PNC) to the committee report on amendments to the Foreign Exchange Act.

Under the provision approved by Parliament, a business may conduct money exchange operations only after obtaining a licence from the MMA in accordance with regulations issued by the central bank.

Parliament also approved provisions requiring regulations to be formulated under the Act for the operation and supervision of money exchange businesses.

The regulations will set out which entities are eligible for licences and the conditions and criteria they must meet.

They will also determine the amount money exchange operators must maintain as a deposit with the MMA as a condition of operating in the sector.

The regulations must further establish penalties and procedures for taking action against businesses operating without a licence or in breach of the rules.

The amendment was passed with 47 MPs voting in favour and 12 voting against.

Foreign currency exchange businesses are already required to obtain authorisation from the MMA under the Money Changing Business Regulations. According to information published by the central bank, 58 businesses are authorised to conduct money exchange operations in the Maldives.

The amendment follows comments by Minister of Homeland Security and Technology Ali Ihusaan on Monday that authorities had identified a number of businesses conducting foreign exchange transactions without licences.

Ihusaan said investigations into seven such operations found that they had traded USD 76 million through the parallel market over the past nine months.

Parliament on Wednesday also passed other amendments to the Foreign Exchange Act, including provisions imposing fines of up to MVR 1 million for specified offences involving foreign currency transactions at rates outside those authorised by the MMA.

The amendments also introduce penalties for specified activities involving the publication, promotion or dissemination of information on foreign exchange transactions conducted outside rates set by the central bank.