Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 ACT 758

Incorporating all amendments up to 8 January 2015

FINANCIAL SERVICES ACT 2013
ACT 758

Part I PRELIMINARY

SECTION

1.Short title and commencement

2.Interpretation

3.Prescription by Minister of additional business or activity

4.Prescription by Bank of additional agreement, dealing, transaction or person

5.Classification of, and construction of references to, insurance business

Part II REGULATORY OBJECTIVES AND POWERS AND FUNCTIONS OF BANK

SECTION

6.Regulatory objectives

7.Powers and functions of Bank

Part III AUTHORIZATION AND REGISTRATION

Division 1 Authorized business

SECTION

8.Authorized business to be carried on by authorized person

9.Application for authorization

10.Grant of licence by Minister

11.Approval by Bank

12.Requirements on minimum capital funds or surplus of assets over liabilities

13.Additional conditions of licence or approval

Part III AUTHORIZATION AND REGISTRATION

Division 2 Restriction on dealings of authorized persons

SECTION

14.Authorized person to carry on authorized business only

15.Authorized person and operator of designated payment system permitted to carry on certain Islamic financial business

16.Licensed insurer to carry on life or general business

Part III AUTHORIZATION AND REGISTRATION

Division 3 Registered business

SECTION

17.Registered business to be carried on by registered person

18.Registered person to comply with standards

Part III AUTHORIZATION AND REGISTRATION

Division 4 Representative office

SECTION

19.Requirements for representative office

Part III AUTHORIZATION AND REGISTRATION

Division 5 Revocation, deregistration, surrender or cessation of business or operations

SECTION

20.Grounds for revocation of authorization

21.Grounds for deregistration

22.Surrender of licence or notification on cessation of business or operations

23.Effect of revocation, deregistration, surrender, notification on cessation of business or operations, and expiry

Part III AUTHORIZATION AND REGISTRATION

Division 6 General matters

SECTION

24.Form of establishment

25.Establishment or relocation of office of authorized persons

26.Fees

27.Publication of names of authorized persons and registered persons

28.Holding out as authorized person or registered person

29.Acting on behalf of unlicensed person

Part IV PAYMENT SYSTEMS

Division 1 Designation of payment systems and payment instruments

SECTION

30.Designation and revocation of designation of payment systems

31.Designation of payment instruments

Part IV PAYMENT SYSTEMS

Division 2 Requirements for operation of payment systems and issuance of designated payment instruments

SECTION

32.Application of this Act on payment systems

33.Power of Bank to specify standards for payment systems

34.Direction to participants of designated payment system

35.Operational arrangements

36.Power of Bank to inspect

Part IV PAYMENT SYSTEMS

Division 3 Finality of payment and netting arrangement

SECTION

37.Interpretation

38.Power of Bank to issue certificate of finality

39.Revocation of certificate of finality

40.Application of this Division

41.Transfer order made after appointment of insolvency administrator

42.Finality of payment and netting arrangement

43.Preservation of rights

44.Non-recognition of insolvency order by foreign court

45.Requirement to notify in event of insolvency, etc.

Part V PRUDENTIAL REQUIREMENTS

SECTION

46.Interpretation

Part V PRUDENTIAL REQUIREMENTS

Division 1 Standards on prudential matters

SECTION

47.Power of Bank to specify standards on prudential matters

48.Institution, director and officer to comply with standards

49.Registered operator of payment system to comply with standards

50.Single counterparty exposure limit for licensed person

51.Restriction on payment of dividend by licensed person

52.Maintenance of assets in Malaysia by licensed person

Part V PRUDENTIAL REQUIREMENTS

Division 2 Corporate governance

SECTION

53.Interpretation

54.Chairman, directors and chief executive officer of institution

55.Requirements to be chairman, director, chief executive officer or senior officer

56.Functions and duties of board of directors

57.Duties of directors

58.Duty to disclose interests in material transaction or material arrangement

59.Disqualifications

60.Fit and proper requirements

61.Cessation from office

62.Notice of cessation from office

Part V PRUDENTIAL REQUIREMENTS

Division 3 Transparency requirements

SECTION

63.Interpretation

64.Maintenance of accounting records and information

65.Compliance with approved accounting standards

66.Publication of financial statements

Part V PRUDENTIAL REQUIREMENTS

Division 4 Auditors

SECTION

67.Appointment of auditor by institution

68.Appointment of auditor by Bank

69.Duties of auditor

70.Notice of cessation as auditor

71.Information to be provided to auditor

72.Reporting obligations of auditor

73.Qualified privilege and duty of confidentiality

Part V PRUDENTIAL REQUIREMENTS

Division 5 Appointed actuaries

SECTION

74.Appointment of actuary by licensed insurer

75.Appointment of actuary by Bank

76.Duties of appointed actuary

77.Cessation as appointed actuary

78.Notice of cessation as appointed actuary

79.Information to be provided to appointed actuary

80.Qualified privilege and duty of confidentiality

Part V PRUDENTIAL REQUIREMENTS

Division 6 Insurance funds

SECTION

81.Establishment and maintenance of insurance funds

82.Requirements relating to insurance funds

83.Withdrawal from insurance funds

84.Assumption of risk

Part V PRUDENTIAL REQUIREMENTS

Division 7 Subsidiaries

SECTION

85.Establishment or acquisition of subsidiaries and acquisition or holding of material interest in corporation

Part VI OWNERSHIP, CONTROL AND TRANSFER OF BUSINESS

SECTION

86.Application and non-application

Part VI OWNERSHIP, CONTROL AND TRANSFER OF BUSINESS

Division 1 Interest in shares of licensed person

SECTION

87.Acquisition of interest in shares requiring approval

88.Control over licensed person prohibited in some cases

89.Disposal of interest in shares requiring approval

90.Application procedures for section 87, 88 or 89

91.Power of Bank to specify standards on shareholder suitability

92.Maximum permissible holdings

93.Notification on acquisition or disposal of interest in shares of licensed person

Part VI OWNERSHIP, CONTROL AND TRANSFER OF BUSINESS

Division 2 Action by Bank in event of breach

SECTION

94.Order against defaulting persons

95.Additional provisions relating to order under subparagraph 94(2)(a)(v)

Part VI OWNERSHIP, CONTROL AND TRANSFER OF BUSINESS

Division 3 Interest in shares of approved person

SECTION

96.Interpretation

97.Acquisition of interest in shares of approved person

Part VI OWNERSHIP, CONTROL AND TRANSFER OF BUSINESS

Division 4 Transfer of business, reconstruction or amalgamation of licensed person

SECTION

98.Interpretation

99.Approval required for reconstruction or amalgamation of licensed person

100.Approval required for business transfer scheme

101.Notification of business transfer scheme

102.Application to High Court for confirmation of business transfer scheme

103.Bank to be party to proceedings

104.Orders sought by transferor and transferee

105.Publication of court order under section 102

106.Reimbursement of Bank's expenses

107.Prohibition of payment out of insurance fund

Part VII FINANCIAL GROUPS

SECTION

108.Purpose of this Part

109.Disapplication of sections 110 and 111 to licensed persons

110.Application to be financial holding company

111.Power of Bank to require submission of application

112.Approval of application as financial holding company under section 110 or 111

113.Bank may approve more than one financial holding company

114.Business of financial holding company

115.Prudential requirements on financial holding company and subsidiaries

116.Power to issue directions to financial holding company and subsidiaries

117.General provisions dealing with directions

118.Consequences of failing to comply with directions

119.Additional provisions relating to paragraph 116(3)(e)

120.Power to remove director or chief executive officer of financial holding company

Part VIII BUSINESS CONDUCT AND CONSUMER PROTECTION

Division 1 Interpretation

SECTION

121.Interpretation

Part VIII BUSINESS CONDUCT AND CONSUMER PROTECTION

Division 2 Business conduct, complaints, disputes, etc.

SECTION

122.Application

123.Standards on business conduct

124.Prohibited business conduct

125.Approved insurance broker, approved financial adviser and approved issuer of designated payment instrument to establish customer account

126.Financial ombudsman scheme

Part VIII BUSINESS CONDUCT AND CONSUMER PROTECTION

Division 3 Insurance issues

SECTION

127.Obtaining insurance outside Malaysia

128.Provisions relating to policies

129.Pre-contractual disclosure and representations, and remedies for misrepresentations

130.Payment of policy moneys under life policy and personal accident policy

Part VIII BUSINESS CONDUCT AND CONSUMER PROTECTION

Division 4 Information and secrecy

SECTION

131.Interpretation

132.Restriction on inquiring specifically into affairs of particular customer

133.Secrecy

134.Permitted disclosures

Part VIII BUSINESS CONDUCT AND CONSUMER PROTECTION

Division 5 Restrictions relating to consumer protection

SECTION

135.Application of this Division

136.Deposit

137.Restriction on accepting deposits

138.Advertisements for deposits

139.Restriction on use of certain words

Part IX MONEY MARKET AND FOREIGN EXCHANGE MARKET

SECTION

140.Power of Bank to specify standards or issue codes

141.Prohibited conduct in money market and foreign exchange market

142.Arrangement with relevant supervisory authority

Part X SUBMISSION OF DOCUMENT OR INFORMATION

SECTION

143.Submission of document or information to Bank

144.Submission of statistical information, etc.

145.Secrecy requirements under sections 143 and 144 not to apply

Part XI EXAMINATION

SECTION

146.Examination of authorized person, etc.

147.Duty to provide access to, and produce documents, information, etc.

148.Examination of other persons

149.Appearance before Bank

150.Examination or assessment by auditor or actuary

151.Confidential information

152.Examination by relevant overseas supervisory authority

153.Disclosure of information by Bank to relevant overseas supervisory authority

Part XII DIRECTIONS OF COMPLIANCE

SECTION

154.Interpretation

155.Circumstances for exercising power to issue directions

156.Power to issue directions to institution

157.General provisions dealing with directions

158.Consequences of failing to comply with directions

159.Additional provisions relating to paragraph 156(2)(b)

Part XIII INTERVENTION AND REMEDIAL ACTION

SECTION

160.Application of this Part to member institution

Part XIII INTERVENTION AND REMEDIAL ACTION

Division 1 Removal of director, chief executive officer or senior officer

SECTION

161.Interpretation

162.Power to remove director, chief executive officer or senior officer

163.Provisions relating to removal

Part XIII INTERVENTION AND REMEDIAL ACTION

Division 2 Power to take intervention and remedial action

Subdivision 1 Circumstances for exercising intervention and remedial action

SECTION

164.Interpretation

165.Circumstances for exercise of Bank's power

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 2 Assumption of control

SECTION

166.Interpretation

167.Power to assume control

168.Effect of assumption of control

169.Information and facilities

170.Additional provisions relating to assumption of control

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 3 Power to appoint receiver and manager

SECTION

171.Interpretation

172.Appointment of receiver and manager by Bank

173.Appointment of receiver and manager by persons other than Bank

174.Provisions in relation to appointment of receiver and manager

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 4 Compulsory transfer of business, assets or liabilities

SECTION

175.Interpretation

176.Order for compulsory transfer of business, assets or liabilities

177.Additional provisions relating to compulsory transfer

178.Continuity obligations

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 5 Provisions relating to bridge institution

SECTION

179.Designation of bridge institution

180.Publication of notice

181.Bridge institution authorized to carry on business

182.Bridge institution not liable for past obligations in respect of officers

183.Stay in respect of bridge institution

184.Financial assistance to bridge institution

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 6 Restructuring of share capital

SECTION

185.Interpretation

186.Power to reduce share capital of institution

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 7 Financial assistance

SECTION

187.Interpretation

188.Liquidity or financial assistance to institution

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 8 Moratorium

SECTION

189.Interpretation

190.Application for moratorium

Part XIII INTERVENTION AND REMEDIAL ACTION

Division 3 Winding up

Subdivision 1 General provisions on winding up

SECTION

191.Interpretation

192.Application of Companies Act 1965 in relation to winding up of institution

193.Bank to apply for winding up

194.Restriction on voluntary winding up

195.Winding up by High Court on application by persons other than Bank

196.Appointment and remuneration of liquidator

197.Control of liquidator

198.Statement of affairs

199.Offences by officers of institution

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 2 Provisions specific to licensed insurers

SECTION

200.Valuation of assets and liabilities

201.Termination of insurance policy

202.Waiver of strict proof of debt

203.Prohibition against issuance of policy

204.Continuation of life business

Part XIII INTERVENTION AND REMEDIAL ACTION

Subdivision 3 Priority of payments in winding up

SECTION

205.Priority of payments in winding up of licensed investment bank

206.Priority of payments in winding up of licensed investment bank carrying on Islamic banking business

207.Application of insurance fund in winding up

Part XIII INTERVENTION AND REMEDIAL ACTION

Division 4 General provisions in relation to actions taken by Bank

SECTION

208.Power of Bank to take action under this Part

209.Qualified financial agreement

210.Assessor Committee

Part XIV OTHER POWERS OF BANK

Division 1 Regulation of prescribed financial institutions

SECTION

211.Interpretation

212.Power of Minister to prescribe financial institutions

Part XIV OTHER POWERS OF BANK

Division 2 International and domestic transactions

SECTION

213.Interpretation

214.Measures relating to international and domestic transactions

215.Power of Bank to impose levies or charges

216.Power of Bank, with approval of Minister, to issue directions

Part XIV OTHER POWERS OF BANK

Division 3 Holiday for licensed person

SECTION

217.Power of Minister to declare holiday for licensed person

Part XV ENFORCEMENT AND PENALTIES

Division 1 Investigation powers

SECTION

218.Investigation by Bank

219.Appointment of investigating officer

220.Powers of investigating officer

221.Powers of entry, search and seizure with warrant

222.Powers of entry, search and seizure without warrant

223.List of seized property, etc.

224.Release of seized property, etc.

225.Search of person

226.Obstruction to exercise of powers by investigating officer

227.Requirement to provide translation

228.Power to examine persons

229.Service of orders or notices generally, etc.

230.Surrender of travel documents

231.Agent provocateur

232.Assistance to police or other public officer

233.Investigating officer deemed to be public servant and public officer

Part XV ENFORCEMENT AND PENALTIES

Division 2 Administrative actions

SECTION

234.Power of Bank to take action

235.Lodgment of amount not distributed with Registrar of Unclaimed Moneys

236.Power of Bank to prescribe monetary penalty

237.Application for appeal of decisions

238.Monetary Penalty Review Committee

Part XV ENFORCEMENT AND PENALTIES

Division 3 Civil actions

SECTION

239.Civil action by Bank

240.Orders by court

241.Civil action to seek compensation

242.Interim orders

243.Contravention of court order

244.No undertaking as to damages

245.Other actions

246.Evidence obtained in investigations may be used in civil proceedings

Part XV ENFORCEMENT AND PENALTIES

Division 4 Criminal offences

SECTION

247.Imprisonment

248.Offences in relation to entries in documents

249.Offence committed by any person acting in official capacity

250.Offence by employees, etc.

251.Seizable offence

252.Duty of investigating officer to make over arrested person to police

253.Power to compound

254.Attempts, abetments and conspiracies

255.Prosecution

Part XV ENFORCEMENT AND PENALTIES

Division 5 General matters

SECTION

256.Protection in relation to disclosure of information to Bank

257.Evidential provision

258.Power of Bank to publish information

Part XVI GENERAL PROVISIONS

SECTION

259.Enforceable undertakings

260.Regulations

261.Provisions relating to approvals, consents, standards, codes, specifications, notices, requirements, directions or measures

262.Opportunity to make representations

263.Exemptions

264.Power of Minister to amend Schedule

265.Decision of Minister to be final

266.Power of Bank to issue guidance

267.Protection against suits and legal proceedings

268.Application of Companies Act 1965

269.Application of certain provisions of Act to Labuan entities

270.Breach or contravention not to affect contract, agreement or arrangement

Part XVII REPEAL, SAVINGS AND TRANSITIONAL

SECTION

271.Repeal

272.Savings and transitional

273.Savings in respect of licences granted under repealed Acts

274.Savings in respect of Islamic financial business

275.Savings and transitional provision in respect of specific provisions of repealed Insurance Act 1996

276.Conversion to single insurance business

277.Designated payment systems deemed certified

278.Savings in respect of approvals granted, notification given and prescription made under repealed Payment Systems Act 2003

279.Savings in respect of interest in shares

280.Savings in respect of financial holding company

281.Savings in respect of deposits accepted by co-operative societies

Schedule 1

Schedule 2

Schedule 3

Schedule 4

Schedule 5

Schedule 6

Schedule 7

Schedule 8

Schedule 9

Schedule 10

Schedule 11

Schedule 12

Schedule 13

Schedule 14

Schedule 15

Schedule 16

An Act to provide for the regulation and supervision of financial institutions, payment systems and other relevant entities and the oversight of the money market and foreign exchange market to promote financial stability and for related, consequential or incidental matters.

[30 June 2013 except section 129 and Schedule 9 [P.U.(B) 276/2013]; 1 January 2015 as the date on which section 129 and schedule 9 come into operation [P.U.(B) 552/2014]]

ENACTED by the Parliament of Malaysia as follows:

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758/1.Short title and commencement

Part I PRELIMINARY

1. Short title and commencement

(1) This Act may be cited as the Financial Services Act 2013.

(2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different parts or different provisions of this Act.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/2.Interpretation

2. Interpretation

(1) In this Act, unless the context otherwise requires--

"adjuster"

means a person who carries on adjusting business;

"adjusting business"

means the business of investigating the cause and circumstances of a loss and ascertaining the quantum of the loss in relation to insurance or takaful claims;

"advertisement"

means the disseminating or conveying of information, invitation or solicitation by any means or in any form including oral and written communication by means of print, electronic and any other media;

"agreement"

means an agreement whether formal or informal, oral or written, express or implied;

"annuity"

means the right to a series of periodical payments at intervals of one year or less under a contract with a life insurer;

"annuity certain"

means an annuity where the duration of periodic payments is pre-determined and does not depend on the death or survival of the policy owner;

"applicant"

means--

(a) in Part III and Schedule 5, the person who submits, on its own behalf or through an advocate, a secretarial firm or other duly authorized representative, the application for authorization under section 9;

(b) in Part VI and Schedule 6, the person who submits, on its own behalf or through an advocate, a secretarial firm or other duly authorized representative, the application for approval under that Part; or

(c) in Part VII, the person who submits the application to be a financial holding company or proposes another company to be a financial holding company; 

"appointed actuary"

means an actuary appointed by a licensed insurer under subsection 74(1) or by the Bank under section 75;

"appointed date"

in respect of any provision under this Act, means the date appointed by the Minister under subsection 1(2) as the date for the coming into operation of that provision;

"approved business"

means any business set out in Division 1 of Part 1 of Schedule 1;

"approved financial adviser"

means a person approved under section 11 to carry on financial advisory business;

"approved insurance broker"

means a person approved under section 11 to carry on insurance broking business;

"approved issuer of a designated payment instrument"

means a person approved under section 11 to issue a designated payment instrument;

"approved money-broker"

means a person approved under section 11 to carry on money-broking business;

"approved operator of a payment system"

means a person approved under section 11 to operate a payment system set out in paragraph 1 of Division 1 of Part 1 of Schedule 1;

"approved person"

means a person approved under section 11 to carry on an approved business;

"approved representative office"

means a representative office in Malaysia of a foreign institution approved by the Bank under subsection 19(4);

"arrangement"

means an arrangement whether formal or informal, oral or written, express or implied;

"associate corporation"

means a corporation in which not less than twenty per cent but not more than fifty per cent of the voting shares of that corporation are held by another corporation, where the first-mentioned corporation is an associate corporation of the other corporation;

"authorization"

means the grant of a licence under section 10 or the grant of an approval under section 11;

"authorized business"

means a licensed business or an approved business;

"authorized person"

means a person licensed under section 10 or approved under section 11 to carry on an authorized business;

"Bank"

has the same meaning as defined in subsection 2(1) of the Central Bank of Malaysia Act 2009 [Act 701];

"banking business"

means--

(a) the business of--

(i) accepting deposits on current account, deposit account, savings account or other similar account;

(ii) paying or collecting cheques drawn by or paid in by customers; and

(iii) provision of finance; and

(b) such other business as prescribed under section 3; 

"books"

has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965 [Act 125];

"bridge institution"

means a body corporate established or acquired by the Bank, and designated as a bridge institution under subsection 176(1);

"business transfer scheme"

means a scheme of transfer for banking business, investment banking business or insurance business;

"chief executive officer",

in relation to--

(a) a body corporate or unincorporate, means an individual, however styled, who, either individually or jointly with one or more other persons, is responsible under the authority of the directors, for the conduct of the business and the administration of such body; or

(b) an authorized person which is established as a branch in Malaysia, means an officer principally responsible for the business of the branch in Malaysia; 

"child"

includes an illegitimate child, a step-child and a child adopted under any written law of Malaysia or of any place outside Malaysia, or under a custom recognized by a class, category or description of persons in or outside Malaysia;

"company"

has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965;

"computer"

has the same meaning assigned to it in section 3 of the Evidence Act 1950 [Act 56];

"computer output"

means a statement or representation, whether in written, printed, pictorial, film, graphical, acoustic or other form--

(a) produced by a computer;

(b) displayed on the screen of a computer; or

(c) accurately translated from a statement or representation so produced; 

"constituent document"

has the same meaning assigned to it in subsection 2(1) of the Central Bank of Malaysia Act 2009;

"corporate group"

means a group of corporations which are related to each other;

"corporation"

has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965;

"co-operative society"

has the same meaning assigned to it in section 2 of the Co-operative Societies Act 1993 [Act 502];

"credit facility"

means--

(a) the giving of any advance, loan or other facility in whatever form or by whatever name called;

(b) the giving of a guarantee; or

(c) any other dealing or transaction as prescribed under section 4; 

"deposit"

means a sum of money accepted or paid on terms under which it will be repaid in full, with or without interest or any other consideration in money or money's worth, either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person accepting it, but excludes money paid bona fide--

(a) by way of an advance or a part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services are not in fact sold, hired or otherwise provided;

(b) by way of security for the performance of a contract or by way of security in respect of any loss which may result from the non-performance of a contract;

(c) without limiting paragraph (b), by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise; and

(d) in such other circumstances, or to or by such other person, as set out in Schedule 2; 

"depositor"

means a person entitled to the repayment of a deposit, whether the deposit was made by him or any other person;

"derivative"

means any agreement, including an option, a swap, futures or forward contract, whose market price, value, delivery or payment obligations is derived from, referenced to or based on, but not limited to, securities, commodities, assets, rates (including interest rates or exchange rates) or indices;

"designated payment instrument"

means a payment instrument prescribed as a designated payment instrument under section 31;

"designated payment system"

means a payment system prescribed as a designated payment system under subsection 30(1);

"director"

includes any person who occupies the position of a director, however styled, of a body corporate or unincorporate, and includes--

(a) a person in accordance with whose directions or instructions the directors or officers of the body are accustomed to act;

(b) an alternate or substitute director; or

(c) in particular, without limiting the foregoing, in the case of--

(i) a corporation, has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965;

(ii) a co-operative society, means a member of the board, or other governing body howsoever called, of the co-operative society;

(iii) a statutory body, means a member of the board, committee, council or other governing body howsoever called, of the statutory body;

(iv) a partnership, means a partner;

(v) a sole proprietorship, means the sole proprietor; and

(vi) any other body, association or group of persons, whether corporate or unincorporate, means any person having the direction and control of the management of its affairs or business;

"document"

has the same meaning assigned to it in section 3 of the Evidence Act 1950 and includes books;

"electronic money"

means any payment instrument, whether tangible or intangible, that--

(a) stores funds electronically in exchange of funds paid to the issuer; and

(b) is able to be used as a means of making payment to any person other than the issuer; 

"electronic terminal"

means an electronic device, operated by or on behalf of an authorized person or a registered person, through which a person may initiate an electronic fund transfer, and includes a point-of-sale terminal, automated teller machine or cash or cheque deposit machine;

"factoring business"

means--

(a) the business of acquiring debts due to any person; and

(b) such other business as prescribed under section 3; 

"financial adviser's representative"

means an individual, however styled, in the direct employment of, acting for or by arrangement with an approved financial adviser, who performs for the financial adviser any services relating to financial advisory business;

"financial advisory business"

means any of the following:

(a) analyzing the financial planning needs of a person relating to an insurance product;

(b) recommending an appropriate insurance product to a person;

(c) sourcing an insurance product from a licensed insurer for a person;

(d) arranging of a contract in respect of an insurance product for a person; or

(e) such other business, service or activity in relation to a financial service as prescribed under section 3; 

"financial group"

means a financial holding company and a group of related corporations under such financial holding company primarily engaged in financial services or in other services in connection with or for the purposes of such financial services which includes at least one licensed person;

"financial holding company"

means a company which--

(a) holds an aggregate of more than fifty per cent of interest in shares of a licensed person, or has an aggregate interest in shares of fifty per cent or less but has control over a licensed person; and

(b) has obtained the approval of the Bank pursuant to subsection 112(3) to be a financial holding company of such licensed person; 

"financial year"

has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965;

"foreign company"

has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965;

"foreign currency"

means any currency other than ringgit;

"foreign institution"

means a foreign company, not being an authorized person or a registered person, which carries on any business outside Malaysia which corresponds, or is similar, to the business of any authorized person or registered person, whether or not such person has an approved representative office;

"foreign insurer"

means an insurer incorporated outside Malaysia;

"Governor" and "Deputy Governor"

have the same meaning assigned to them in subsection 2(1) of the Central Bank of Malaysia Act 2009;

"holding company"

has the same meaning assigned to it in section 5 of the Companies Act 1965;

"individual"

means a natural person;

"insurance"

includes reinsurance;

"insurance agent"

means a person who does all or any of the following:

(a) solicits or obtains a proposal for insurance on behalf of an insurer;

(b) offers or assumes to act on behalf of an insurer in negotiating a policy; or

(c) does any other act on behalf of an insurer in relation to the issuance, renewal or continuance of a policy; 

"insurance broker"

means a person who, as an independent contractor, carries on insurance broking business and includes a reinsurance broker;

"insurance broking business"

means the business of soliciting, negotiating or procuring a policy with an insurer, or the renewal or continuance of the policy by a person, for a policy owner other than for himself and includes reinsurance broking for an insurer;

"insurance claim"

means a demand for payment of an amount due under a policy;

"insurance fund"

means an insurance fund established and maintained under section 81;

"insurer"

includes a professional reinsurer;

"interest in shares"

shall be construed as set out in Schedule 3;

"investment account"

has the same meaning assigned to it in subsection 2(1) of the Islamic Financial Services Act 2013 [Act 759];

"investment banking business"

means--

(a) the business of--

(i) accepting deposits on deposit account; and

(ii) provision of finance;

(b) any regulated activity carried on pursuant to a Capital Markets Services Licence under the Capital Markets and Services Act 2007 [Act 671]; and

(c) such other business as prescribed under section 3; 

"investment company"

has the same meaning assigned to it in subsection 319(1) of the Companies Act 1965;

"investment-linked policy"

means a contract of insurance on human life or an annuity where the benefits are, wholly or partly, to be determined by reference to units, the value of which is related to--

(a) the income from property of any description; or

(b) the market value of such property; 

"issuer"

means any person, acting alone or under an arrangement with another person, who undertakes to be responsible for the payment obligation in respect of a payment instrument resulting from a user being issued with or using the payment instrument;

"leasing business"

means--

(a) the business of letting or sub-letting movable property on hire for the purpose of the use of such property by the hirer or any other person in any business, trade, profession or occupation or in any commercial, industrial, agricultural or other economic enterprise whatsoever and, where the lessor is the owner of the property, regardless whether the letting is with or without an option to purchase the property, but excludes the business of hire-purchase which is subject to the Hire-Purchase Act 1967 [Act 212] and for the purpose of this definition, "movable property" includes any plant, machinery, equipment or other chattel attached or to be attached to the earth or fastened or to be fastened, permanently or otherwise, to any thing attached to the earth; and

(b) such other business as prescribed under section 3; 

"liabilities"

includes debts or obligations of every kind, whether present or future, or whether vested or contingent;

"licence"

means a licence granted under section 10;

"licensed bank"

means a person licensed under section 10 to carry on banking business;

"licensed business"

means banking business, insurance business or investment banking business;

"licensed insurer"

means a person licensed under section 10 to carry on insurance business;

"licensed investment bank"

means a person licensed under section 10 to carry on investment banking business;

"licensed person"

means a person licensed under section 10 to carry on a licensed business;

"life business"

means the business of undertaking liability under a life policy;

"life policy"

means a policy by which payment of policy moneys is insured on death or survival, including extensions of cover for personal accident, disease or sickness and includes an annuity but excludes a personal accident policy;

"Malaysia Deposit Insurance Corporation"

means the Malaysia Deposit Insurance Corporation referred to in the Malaysia Deposit Insurance Corporation Act 2011 [Act 720];

"Malaysian policy"

means a policy which is issued in Malaysia by a licensed insurer and is--

(a) a life policy where the policy owner's address, as specified in the policy or any other address subsequently notified in writing by the policy owner to the insurer, is or was an address in Malaysia;

(b) a general policy which relates to risks arising in Malaysia, or where the policy owner is a resident of, or a permanent establishment in, Malaysia within the meaning of the Income Tax Act 1967 [Act 53]; or

(c) a reinsurance contract with another licensed insurer; 

"market participant"

means any person who--

(a) issues, sells, purchases, repurchases, borrows, lends or otherwise deals with currencies or other financial instruments traded in the money market or foreign exchange market including over-the-counter derivatives whose price, value or payment obligations are derived from, referenced to or based on interest rates or exchange rates; or

(b) arranges transactions in the money market or foreign exchange market as an intermediary, whether acting as a principal or an agent, and includes any other persons as prescribed under section 4;

"member",

in relation to a body corporate or unincorporate which is--

(a) a corporation, means a shareholder;

(b) a co-operative society, means a member of the co-operative society;

(c) a partnership, means a partner;

(d) any other body corporate having a membership, means a member of the body; and

(e) a society registered under the Societies Act 1966 [Act 335], means a member of the society; 

"merchant acquiring services"

means a business of an operator of a payment system that enters into a contract with a merchant for the purpose of accepting payment instruments for payment of goods or services;

"Minister"

means the Minister for the time being charged with the responsibility for finance;

"money-broking business"

means the business of arranging transactions between buyers and sellers in the money market or foreign exchange market as an intermediary in consideration of brokerage fees paid or to be paid, but excludes the buying or selling of Malaysian currency or foreign currencies as a principal in such markets;

"office"

refers to a place where or at which any business of any person is carried out, including the head office in Malaysia, or any other office, a branch, an agency (except for an insurance agency in the case of a licensed insurer), a mobile place of business, a place of business set up and maintained for a limited period only or an electronic terminal;

"officer",

in relation to a body corporate or unincorporate, includes any employee or the chief executive officer of the body corporate or unincorporate;

"operator"

means any person, acting alone or under an arrangement with another person, responsible for the rules, procedures and operations of a payment system;

"operator of a designated payment system"

means any person who operates a designated payment system;

"participant"

means any person who is permitted by the rules governing a payment system to send payment instructions or settlement instructions to the payment system and who is bound by the rules governing the payment system;

"participating life policy"

means a life policy conferring a right to the policy owner to participate in allocations, of which the amount or timing is at the discretion of the insurer, from the assets of an insurance fund under subsection 81(2);

"payment instruction"

or "settlement instruction", in relation to a payment system, includes an instruction to transfer, clear or settle transactions in funds or securities, as the case may be;

"payment instrument"

means any instrument, whether tangible or intangible, that enables a person to obtain money, goods or services or to make any payment;

"payment system"

means any system or arrangement for the transfer, clearing or settlement of funds or securities;

"person"

includes an individual, any corporation, statutory body, local authority, society, trade union, co-operative society, partnership and any other body, organization, association or group of persons, whether corporate or unincorporate;

"personal accident policy"

means a policy providing fixed pecuniary benefits or benefits in the nature of indemnity, or both, against risks of the person insured sustaining injury or dying as the result of an accident or becoming incapacitated in consequence of disease;

"policy"

means an insurance policy and includes a cover note or a contract of insurance, whether or not embodied in or evidenced by an instrument in the form of an insurance policy, and references to--

(a) issuing a policy shall be construed as entering into a contract of insurance, whether or not a formal contract has been issued; and

(b) a policy of an insurer includes a policy or a bond in respect of which the insurer is under any liability, whether the policy was issued by the insurer or the liability was transferred to the insurer from another insurer; 

"policy moneys"

includes any benefit, whether pecuniary or not, which is secured by a policy;

"policy owner"

means the person who has legal title to a policy and includes--

(a) where a policy has been assigned, the assignee;

(b) where a personal representative of a deceased policy owner is entitled as against the insurer to the benefit of a policy, the personal representative;

(c) in relation to a policy providing for the payment of annuity, an annuitant; and

(d) where under a policy, moneys are due or payable, whether periodically or otherwise, the person to whom the moneys are due or payable; 

"premises"

includes any land, building, structure or place;

"premium"

means the amount payable to an insurer under a policy as consideration for the obligations assumed by the insurer;

"prescribe"

means to prescribe by an order published in the Gazette, and a power to prescribe includes the power to prescribe differently for different persons, payment systems or payment instruments or different classes, categories or descriptions of persons, payment systems or payment instruments;

"professional reinsurer"

means a reinsurer which is licensed to carry on solely reinsurance business;

"property"

means any movable or immovable property, whether tangible or intangible and includes--

(a) any right, interest, title, claim, chose in action, power or privilege, whether present or future, or whether vested or contingent, in relation to any property, or which is otherwise of value;

(b) any conveyance executed for conveying, assigning, appointing, surrendering, or otherwise transferring or disposing of immovable property of which the person executing the conveyance is the proprietor or has possession or in which he is entitled to a contingent right, either for the whole interest or for any less interest;

(c) any security, including any stock, share, debenture and fund;

(d) any negotiable instrument, including any bank note, bearer note, Treasury bill, dividend warrant, bill of exchange, promissory note, cheque and negotiable certificate of deposit; or

(e) any mortgage or charge, whether legal or equitable, guarantee, lien or pledge, whether actual or constructive, letter of hypothecation, trust receipt, indemnity, undertaking or other means of securing payment or discharge of a debt or liability, whether present or future, or whether vested or contingent; 

"provision of finance"

includes--

(a) lending of money;

(b) leasing business;

(c) factoring business;

(d) purchase of bills of exchange, promissory notes, certificates of deposit, debentures or other negotiable instruments; and

(e) the acceptance or guarantee of any liability, obligation or duty of any person; 

"public company"

has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965;

"registered adjuster"

means a registered person carrying on adjusting business;

"registered business"

means any business set out in Part 2 of Schedule 1;

"registered operator of a payment system"

means a registered person operating a payment system set out in paragraph 9 of Part 2 of Schedule 1;

"registered person"

means a registered person under subsection 18(1);

"reinsurance"

means insurance cover effected by an insurer with a second insurer on the risks, wholly or partly, it has accepted and includes any similar arrangement by a branch of the insurer in Malaysia with its branch outside Malaysia (the head office of the insurer being, for this purpose, treated as a branch);

"related",

in relation to a corporation, means related within the meaning of section 6 of the Companies Act 1965;

"relative",

in relation to an individual, subject to subsection (2), means--

(a) the spouse of the individual;

(b) the brother or sister of the individual, or of the spouse of the individual;

(c) any lineal ascendant or descendant of the individual, or of the spouse of the individual;

(d) the spouse of any individual referred to in paragraph (b) or (c);

(e) any lineal descendant of an individual referred to in paragraph (b) or (d);

(f) any uncle, aunt or cousin of the individual, or of the spouse of the individual; or

(g) any spouse, or any lineal ascendant or descendant, of an individual referred to in paragraph (f); 

"repealed Acts"

means the Banking and Financial Institutions Act 1989 [Act 372], the Exchange Control Act 1953 [Act 17], the Insurance Act 1996 [Act 553] and the Payment Systems Act 2003 [Act 627];

"risk to financial stability"

has the same meaning assigned to it in section 29 of the Central Bank of Malaysia Act 2009;

"senior officer"

means a person, other than the chief executive officer or a director, having authority and responsibility for planning, directing or controlling the activities of an authorized person, operator of a designated payment system or a financial holding company including the chief operating officer, members of decision-making committees and other persons performing key functions such as risk management, compliance, internal audit or other functions as may be specified by the Bank under section 47;

"share",

in relation to a corporation, means an issued share of the corporation and includes stock except where a distinction between stock and share is expressed or implied;

"specify"

means to specify in writing by way of standards or any other forms, and a power to specify includes the power to specify differently for different persons, payment systems or payment instruments or different classes, categories or descriptions of persons, payment systems or payment instruments;

"standards"

includes any obligation or requirement as specified by the Bank under this Act and such standards may contain any interpretative, incidental, supplemental, consequential and transitional provisions as the Bank considers appropriate;

"statutory body"

means any authority or body, whether corporate or unincorporate, established, appointed or constituted by any written law, but excludes any local authority;

"subsidiary"

has the same meaning assigned to it in section 5 of the Companies Act 1965;

"systemic risk"

in relation to a designated payment system, means--

(a) a risk that the failure of a participant or operator to meet his payment or settlement obligations will cause another participant to be unable to meet his payment or settlement obligations when due; or

(b) a risk that the failure of a participant or operator to meet his payment or settlement obligations may cause significant liquidity or credit problems that might threaten the stability of the financial system; 

"takaful claim"

has the same meaning assigned to it in subsection 2(1) of the Islamic Financial Services Act 2012;

"user"

means any person to whom a designated payment instrument has been issued or any person who uses a designated payment instrument to obtain money, goods or services or to make any payment;

"voting share"

has the same meaning assigned to it in subsection 4(1) of the Companies Act 1965.

(2)

Relative

For the purpose of the definition of "relative" in subsection (1)--

(a) the adoption of any person by another under any written law of Malaysia or any country, territory or place outside Malaysia, or under any custom recognized by any class of persons in Malaysia or in any country, territory or place outside Malaysia, shall be treated as creating between the adopter and the adopted person the same natural relationship as the adoptive relationship, and other relationships in relation to it shall be determined accordingly; and

(b) references therein to a relationship include, where relevant, a relationship by half-blood. 

(3)

Control

For the purposes of this Act, a person shall be presumed to have control over a licensed person or corporation if such person--

(a) has an interest of more than fifty per cent of the shares in the licensed person or corporation; or

(b) unless proven otherwise--

(i) has the power to elect, appoint, remove or prevent from election, appointment or removal, or cause to be elected, appointed, removed or prevented from being elected, appointed or removed, a majority of the directors of the licensed person or corporation;

(ii) has the power to make or cause to be made decisions in respect of the business or administration of the licensed person or corporation, and to give effect to such decisions or cause them to be given effect to; or

(iii) is a person in accordance with whose directions, instructions or wishes the directors, chief executive officer or senior officers of the licensed person or corporation are accustomed or under obligation, whether formal or informal, to act, and the phrase "controlled" or "controller" shall be construed accordingly.

(4) Acting in concert

For the purposes of this Act--

(a) "persons acting in concert" means persons who, pursuant to an agreement, arrangement or understanding, co-operate to--

(i) acquire jointly or severally interests in the shares of a corporation for the purpose of obtaining or consolidating control of that corporation; or

(ii) act jointly for the purpose of exercising control over a corporation; and

(b) without limiting the generality of paragraph (a), the following persons shall be presumed to be persons acting in concert, unless proven otherwise:

(i) a corporation and its related and associate corporations;

(ii) a corporation and any of its directors, or the parent, child, brother or sister of any of its directors, or the spouse of any such director or of any such relative, or any related trusts;

(iii) a corporation and any pension fund established by it;

(iv)ma person and any investment company, unit trust fund or any other fund whose investments such person manages on a discretionary basis;

(v) a person and his client which is a corporation, where the person manages on a discretionary basis the client's funds and has ten per cent or more interest in shares of the client; or

(vi) a person who owns or controls twenty per cent or more of the voting shares of a corporation falling within subparagraph (i) and any parent, child, brother or sister of such person, or the spouse of such person or any such relative, or any related trusts together with one or more persons falling within subparagraph (i).

(5)

Qualified financial agreements

For the purposes of this Act--

(a) "qualified financial agreement" means--

(i) a master agreement in respect of one or more qualified financial transactions under which if certain events specified by the parties to the agreement occur--

(A) the transactions referred to in the agreement terminate or may be terminated;

(B) the termination values of the transactions under subparagraph (i) are calculated or may be calculated; and

(C) the termination values of the transactions under subparagraph (i) are netted or may be netted, so that a net amount is payable, and where an agreement is also in respect of one or more transactions that are not qualified financial transactions, the agreement shall be deemed to be a qualified financial agreement only with respect to the transactions that are qualified financial transactions and any permitted enforcement by the parties of their rights under such agreement;

(ii) an agreement relating to financial collateral, including a title transfer credit support agreement, with respect to one or more qualified financial transactions under a master agreement referred to in subparagraph (i); or

(iii) any other agreement as prescribed under section 4;

(b) "qualified financial transaction" means--

(i) a derivative, whether to be settled by payment or delivery; or

(ii) a repurchase, reverse repurchase or buy-sell back agreement with respect to securities;

(c) "financial collateral" means any of the following that is subject to an interest or a right that secures payment or performance of an obligation in respect of a qualified financial agreement or that is subject to a title transfer credit support agreement:

(i) cash or cash equivalents, including negotiable instruments and demand deposits;

(ii) security, a securities account or a right to acquire securities; or

(iii) futures agreement or futures account;

(d) "title transfer credit support agreement" means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of a qualified financial agreement. 

(6) Any reference in this Act to "this Act", the "Islamic Financial Services Act 2013" or the "Central Bank of Malaysia Act 2009" shall, unless otherwise expressly stated, be deemed to include a reference to any rule, regulation, order, notification or other subsidiary legislation made under this Act, the Islamic Financial Services Act 2013 or the Central Bank of Malaysia Act 2009, as the case may be.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/3.Prescription by Minister of additional business or activity

3. Prescription by Minister of additional business or activity

The Minister may, on the recommendation of the Bank, prescribe--

(a) any business or activity as an addition to the definition of--

(i) "banking business";

(ii) "investment banking business";

(iii) "financial intermediation activities";

(iv) "factoring business"; or

(v) "leasing business", and upon such prescription, the definition as added to shall be deemed to be an integral part of this Act as from the date of commencement of such prescription, or from such later date as may be specified in the order; and

(b) any business, service or activity in relation to a financial service as a financial advisory business for the purposes of the definition of "financial advisory business" under subsection 2(1). 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/4.Prescription by Bank of additional agreement, dealing, transaction or person

4. Prescription by Bank of additional agreement, dealing, transaction or person

The Bank may, with the concurrence of the Minister, prescribe--

(a) any agreement in respect of a financial transaction that may be entered into by parties in the financial markets, other than a standardized derivative or an agreement in respect of securities transactions entered into under the rules of a stock exchange and approved clearing house as defined in subsection 2(1) of the Capital Markets and Services Act 2007 as a qualified financial agreement for the purposes of the definition of "qualified financial agreement" in subsection 2(5);

(b) any dealing or transaction as a credit facility for the purposes of the definition of "credit facility" in subsection 2(1); and

(c) any other person as a market participant for the purposes of the definition of "market participant" in subsection 2(1). 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/5.Classification of, and construction of references to, insurance business

5. Classification of, and construction of references to, insurance business

(1) For the purposes of this Act, insurance business shall be divided into two classes--

(a) life business, which in addition to all insurance business concerned with life policies shall include any type of insurance business carried on as incidental only to the life insurer's business; and

(b) general business, which means all insurance business which is not life business. 

(2) For the purposes of this Act, the reinsurance of liabilities under insurance policies shall be treated as belonging to the same class and description as the insurance policies being reinsured.

(3) Notwithstanding anything in subsection (1) or the determination of a policy to a particular insurance fund by a licensed insurer, if the Bank is satisfied that any part of the licensed insurer's business which belongs to a particular class or description of insurance business ought in that licensed insurer's case to be treated as belonging to another class or description, the Bank may direct that it shall be so treated for the purposes of this Act.

(4) For the purposes of this Act--

(a) the activity of--

(i) effecting a contract of insurance; or

(ii) carrying out a contract of insurance, by way of business shall constitute the carrying on of insurance business;   

(b) a person is deemed to effect, or carry out, a contract of insurance by way of business if he--

(i) engages in such activity in a manner which in itself constitutes the carrying on of a business;

(ii) holds himself out as willing and able to engage in such activity; or

(iii) regularly solicits other persons to engage with him in transactions constituting such activity; and

(c) a reference to carrying on insurance business includes carrying it on through an agent, or as an agent, but "insurer" does not include an insurance agent as such nor in the case of a person who is both insurer and insurance agent, any business done by that person as an insurance agent. 

(5) For the purposes of this Act--

(a) the Minister may, on the recommendation of the Bank, prescribe any business or activity as insurance business;

(b) the Bank may determine such business or activity to belong to a particular class referred to in subsection (1) or description, of insurance business; and

(c) the businesses set out in Schedule 4 shall not be treated as insurance business. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/6.Regulatory objectives

Part II REGULATORY OBJECTIVES AND POWERS AND FUNCTIONS OF BANK

6. Regulatory objectives

The principal regulatory objective of this Act is to promote financial stability and in pursuing this objective, the Bank shall--

(a) foster--

(i) the safety and soundness of financial institutions;

(ii) the integrity and orderly functioning of the money market and foreign exchange market;

(iii) safe, efficient and reliable payment systems and payment instruments; and

(iv) fair, responsible and professional business conduct of financial institutions; and

(b) strive to protect the rights and interests of consumers of financial services and products. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/7.Powers and functions of Bank

7. Powers and functions of Bank

(1) The Bank shall exercise the powers and perform the functions under this Act in a way which it considers most appropriate for the purpose of meeting the regulatory objectives of this Act and the Governor shall exercise such powers and perform such functions of the Bank on its behalf.

(2) The powers and functions of the Bank under this Act are in addition to, and not in derogation of, the powers and functions of the Bank under the Central Bank of Malaysia Act 2009.

(3) The Bank shall, from time to time, keep the Minister informed on matters relating to the exercise of its powers and performance of its functions under this Act.

(4) The Bank may authorize a Deputy Governor or an officer of the Bank to exercise any of its powers or perform any of its functions under this Act.

(5) The Bank may establish and authorize a committee consisting of members as the Bank may determine for the purpose of exercising any of the powers or performing any of the functions of the Bank under this Act.

(6) The Bank may, either generally or in a particular case, appoint a person, whether in or outside Malaysia, who is not an officer of the Bank--

(a) to render such assistance in the exercise of any of its powers or performance of any of its functions under this Act; or

(b) to exercise any of its powers or perform any of its functions on behalf of and in the name of the Bank, as may be specified by the Bank.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/8.Authorized business to be carried on by authorized person

Part III AUTHORIZATION AND REGISTRATION

Division 1 Authorized business

8. Authorized business to be carried on by authorized person

(1) No person shall carry on any authorized business unless it is--

(a) licensed by the Minister, on the recommendation of the Bank, under section 10 to carry on banking business, insurance business or investment banking business; or

(b) approved by the Bank under section 11 to carry on any of the businesses set out in Division 1 of Part 1 of Schedule 1. 

(2) Paragraph (1)(b) shall not apply, in respect of financial advisory business, to persons set out in Division 2 of Part 1 of Schedule 1.

(3) Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/9.Application for authorization

9. Application for authorization

An applicant for a licence under section 10 or an approval under section 11 to carry on an authorized business shall submit the application in writing to the Bank together with such documents or information as may be specified by the Bank.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/10.Grant of licence by Minister

10. Grant of licence by Minister

(1) In assessing an application duly made under section 9 to carry on any licensed business, the Bank shall have regard to all the factors set out in Part 1 and Part 2 of Schedule 5 and such other matters that the Bank considers relevant.

(2) Upon making an assessment under subsection (1) and where the Bank is satisfied that such applicant may be granted a licence, the Bank shall make a recommendation to the Minister to grant a licence under subsection (4) with or without conditions.

(3) The Bank shall notify the applicant in writing if the Bank does not make a recommendation to the Minister under subsection (2).

(4) Where the Bank makes a recommendation pursuant to subsection (2), the Minister may grant a licence to the applicant to carry on banking business, insurance business or investment banking business, with or without conditions.

(5) The Bank shall notify the applicant in writing of the decision of the Minister under subsection (4).

(6) Where the Minister grants a licence under subsection (4), a licensed person shall commence its licensed business within a period or such further period as may be specified by the Minister, on the recommendation of the Bank.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/11.Approval by Bank

11. Approval by Bank

(1) In assessing an application duly made under section 9 to carry on any approved business, the Bank shall have regard to all the factors set out in Part 1 of Schedule 5 and such other matters that the Bank considers relevant.

(2) The Bank may--

(a) approve an application to carry on any approved business, with or without conditions, or for such period as stated in the approval; or

(b) reject the application. 

(3) A person approved under paragraph (2)(a) to carry on insurance broking business or financial advisory business shall at all times have in force a professional indemnity insurance or takaful of such amount as may be specified by the Bank.

(4) The Bank shall notify the applicant in writing of its decision under subsection (2).

(5) Where the Bank approves an application under paragraph (2)(a), an approved person shall commence its approved business within a period or such further period as may be specified by the Bank.

(6) Any person who contravenes subsection (3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/12.Requirements on minimum capital funds or surplus of assets over liabilities

12. Requirements on minimum capital funds or surplus of assets over liabilities

(1) No person shall be granted a licence under section 10 or an approval under section 11 if--

(a) in the case of a company, its capital funds; or

(b) in the case of a branch established in Malaysia by a foreign institution, its surplus of assets over liabilities, is less than the minimum amount as may be prescribed by the Minister in the case of a licensed person, or the Bank in the case of an approved person.

(2) Every authorized person shall, in carrying on its authorized business, maintain at all times such minimum amount applicable to it.

(3) Notwithstanding subsections (1) and (2), the Minister may grant a licence under section 10 to a person subject to the condition that the person meets the minimum amount in the manner and within the period which are specified by the Bank with the approval of the Minister.

(4) For the purposes of this section, "capital funds" means paid-up capital and any reserves as may be specified by the Bank.

(5) Any authorized person who contravenes subsection (2) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/13.Additional conditions of licence or approval

13. Additional conditions of licence or approval

(1) The Minister, upon the recommendation of the Bank, in the case of a licence granted under section 10, or the Bank in the case of an approval granted under section 11, may at any time in writing amend or revoke any existing condition of an authorization or impose any new conditions thereto.

(2) Any authorized person who fails to comply with any of the conditions imposed by the Minister or the Bank, as the case may be, under subsection (1) or 10(4), paragraph 11(2)(a) or subsection 12(3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/14.Authorized person to carry on authorized business only

Part III AUTHORIZATION AND REGISTRATION

Division 2 Restriction on dealings of authorized persons

14. Authorized person to carry on authorized business only

(1) Unless the Bank otherwise specifies, an authorized person shall not carry on any business or activity in or outside Malaysia except in connection with or for the purposes of its authorized business or as provided in section 15.

(2) Notwithstanding subsection (1) and subject to paragraphs 15(1)(d) and (e), an approved operator of a payment system or approved issuer of a designated payment instrument which is not a licensed person may carry on any business or activity which is not in connection with or for the purposes of its approved business.

(3) Except with the prior written approval of the Bank--

(a) a licensed insurer shall not carry on annuity certain business, financial guarantee insurance business or credit guarantee insurance business; and

(b) a licensed investment bank shall not accept money on deposit which is repayable on demand by cheques, drafts, orders or any other instrument drawn by a depositor on such licensed investment bank. 

(4) Any authorized person who contravenes subsection (1) or (3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/15.Authorized person and operator of designated payment system permitted to carry on certain Islamic financial business

15. Authorized person and operator of designated payment system permitted to carry on certain Islamic financial business

(1) Upon an application to the Bank and where the Bank has granted its written approval--

(a) a licensed bank or licensed investment bank may carry on Islamic banking business;

(b) an approved insurance broker may carry on takaful broking business;

(c) an approved financial adviser may carry on Islamic financial advisory business;

(d) an operator of a designated payment system or approved operator of a payment system may facilitate participants engaged in Islamic financial business to transfer, clear or settle funds or securities; or

(e) an approved issuer of a designated payment instrument may issue a designated Islamic payment instrument. 

(2) A person approved under subsection (1) shall be subject to--

(a) the provisions of the Islamic Financial Services Act 2013, in particular the provisions of Parts IV, VI, IX, X and XIII of the Act, in so far as those provisions relate to the business such person is approved to carry on under that subsection; and

(b) any standards, notices, directions, conditions, specifications or requirements specified or made under that Act relating to the business such person is approved to carry on under that subsection. 

(3) Without limiting the generality of subsection (2), a licensed bank or licensed investment bank approved under subsection (1) shall, for the purposes of carrying on Islamic banking business--

(a) establish and maintain at all times an Islamic banking fund with such minimum amount as may be specified by the Bank to fund the operations of its Islamic banking business; and

(b) keep all assets and liabilities of its Islamic banking business separate from its other assets and liabilities in such manner as may be specified by the Bank. 

(4) The Islamic banking fund established under paragraph (3)(a) shall--

(a) be funded from the capital funds of the licensed bank or licensed investment bank and other sources of funds as may be specified by the Bank; and

(b) be segregated from the capital funds of the licensed bank or licensed investment bank for the operations of its licensed business under this Act. 

(5) Unless otherwise specified by the Bank, the assets of a licensed bank or licensed investment bank in relation to its Islamic banking business shall not be--

(a) used to fund the operations of its licensed business under this Act; and

(b) subject to the debts or other obligations of the licensed bank or licensed investment bank in relation to its licensed business under this Act. 

(6) An operator of a designated payment system or approved operator of a payment system who has obtained the approval of the Bank under subsection (1) shall--

(a) put in place operational arrangements of the payment system, including liquidity facilities which are; or

(b) ensure its business conduct is, not contrary to Shariah in so far as the operational arrangements and the business conduct relate to the business which such operator is approved to carry on under subsection (1).

(7) The board of directors of--

(a) a licensed bank or licensed investment bank; or

(b) an approved person or operator of a designated payment system which is required by the Bank under subsection 30(3) of the Islamic Financial Services Act 2013 to establish a Shariah committee, shall, without prejudice to section 56, have due regard to the advice of its Shariah committee in respect of the Islamic financial business carried on by the person.

(8) For the purposes of this section--

"designated Islamic payment instrument", "Islamic banking business", "Islamic financial advisory business", "Shariah committee"

and "takaful broking business" have the same meaning as defined in subsection 2(1) of the Islamic Financial Services Act 2013;

"Islamic financial business"

has the same meaning as defined in subsection 2(1) of the Central Bank of Malaysia Act 2009.

(9) Any person who fails to obtain the approval of the Bank to carry on any business referred to under subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/16.Licensed insurer to carry on life or general business

16. Licensed insurer to carry on life or general business

(1) A licensed insurer, other than a licensed professional reinsurer, shall not carry on both life business and general business.

(2) Notwithstanding subsection (1), a licensed life insurer may carry on the business of insuring solely against disease or sickness or solely against medical expenses subject to such requirements and conditions as may be specified by the Bank.

(3) Any licensed insurer who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/17.Registered business to be carried on by registered person

Part III AUTHORIZATION AND REGISTRATION

Division 3 Registered business

17. Registered business to be carried on by registered person

(1) No person shall carry on registered business unless it has--

(a) fulfilled such requirements and submitted such documents or information as may be prescribed by the Bank; and

(b) notified the Bank in writing of the date of commencement of its business. 

(2) Subsection (1) shall not apply in respect of adjusting business to--

(a) an advocate, solicitor or a member of any other profession who acts or assists in adjusting insurance or takaful claims incidental to his practice and who does not hold himself out as an adjuster;

(b) an adjuster of aviation or maritime losses; or

(c) an employee of a licensed insurer or licensed takaful operator under the Islamic Financial Services Act 2013, who in the course of his employment, acts or assists in adjusting insurance or takaful claims and who does not hold himself out as an adjuster. 

(3) Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/18.Registered person to comply with standards

18. Registered person to comply with standards

(1) A person is a registered person if such person has complied with subsection 17(1) and has commenced its registered business.

(2) The Bank may specify standards for registered persons and a registered person shall at all times comply with such standards.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/19.Requirements for representative office

Part III AUTHORIZATION AND REGISTRATION

Division 4 Representative office

19. Requirements for representative office

(1) No foreign institution shall--

(a) establish a representative office in Malaysia unless it has obtained the prior written approval of the Bank; or

(b) through its approved representative office, carry on any authorized or registered business in Malaysia. 

(2) Subject to the prohibition under paragraph (1)(b), a foreign institution may carry on, through its approved representative office, only such activities as may be specified by the Bank.

(3) An application to establish a representative office shall be made in writing to the Bank together with such documents or information as may be specified by the Bank.

(4) The Bank may on an application having been duly made in accordance with subsection (3) approve the application, with or without conditions, or reject the application.

(5) The Bank may at any time in writing amend or revoke any existing conditions of an approval granted under subsection (4) or impose any new condition thereto.

(6) The Bank may revoke an approval granted under subsection (4) if--

(a) the approved representative office has--

(i) breached or contravened any provision of this Act or the Central Bank of Malaysia Act 2009; or

(ii) failed to comply with any condition imposed pursuant to the approval, regardless that there has been no prosecution or other action in respect of such breach, contravention or non-compliance;

(b) the approved representative office has contravened any law in or outside Malaysia; or

(c) it is in the interest of consumers of financial services and products in Malaysia to do so. 

(7) The Bank may, with the approval of the Minister, revoke an approval granted under subsection (4) if it is in the national interest to do so.

(8) Any person who contravenes subsection (1) or (2) or fails to comply with any condition imposed under subsection (4) or (5) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/20.Grounds for revocation of authorization

Part III AUTHORIZATION AND REGISTRATION

Division 5 Revocation, deregistration, surrender or cessation of business or operations

20. Grounds for revocation of authorization

(1) The Minister may, on the recommendation of the Bank, revoke the licence of a licensed person, and the Bank may revoke the approval of an approved person, on the grounds that--

(a) the Bank has, in connection with the application under section 9, been provided with false, misleading, inaccurate or incomplete information;

(b) the person has not commenced the business in respect of which it is licensed or approved within the period specified by the Minister under subsection 10(6) or by the Bank under subsection 11(5);

(c) the person has ceased to carry on business for which it is licensed or approved;

(d) the person has--

(i) breached or contravened any provision of this Act or the Central Bank of Malaysia Act 2009;

(ii) failed to comply with any condition of its licence or approval; or

(iii) failed to comply with any direction issued by the Bank under section 156 or an order under the Central Bank of Malaysia Act 2009, regardless that there has been no prosecution or other action in respect of such breach, contravention or non-compliance;

(e) the person has ceased to be viable in the opinion of the Bank;

(f) the Bank, pursuant to the exercise of its powers under Part XIII relating to such person, has substantially completed all the transfer of business, assets or liabilities of the person;

(g) the person has been wound-up or otherwise dissolved; or

(h) it is in the interest of consumers of financial services and products to do so. 

(2) The Minister may, on the recommendation of the Bank, revoke the licence of a licensed person, and the Bank may with the concurrence of the Minister revoke an approval of an approved person, if it is in the interest of the public to do so.

(3) In addition to subsections (1) and (2), the Bank may revoke the approval of an approved person on the grounds that--

(a) in the opinion of the Bank the person is committing or is about to commit an act, or is pursuing or is about to pursue any course of conduct, that is unsafe or unsound or has failed to commit an act or pursue a course of conduct that is necessary to maintain the safety and soundness of the person;

(b) in the opinion of the Bank, the person is carrying on business in a manner detrimental to the interests of its customers, creditors, participants, users or the public generally;

(c) a receiver or manager of the property of the person has been appointed; or

(d) possession of the property of the person has been taken by or on behalf of a debenture holder pursuant to a charge on the property. 

(4) The Bank--

(a) shall publish in the Gazette, as soon as practicable, a notice of a revocation of a licence under subsection (1) or (2); or

(b) may publish a notice of a revocation of an approval under subsection (1), (2) or (3) in such form as the Bank deems appropriate. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/21.Grounds for deregistration

21. Grounds for deregistration

The Bank may deregister a registered person if--

(a) the person has provided the Bank with false, misleading, inaccurate or incomplete information for the purposes of subsection 17(1);

(b) the person has ceased to carry on business for which it is registered;

(c) the person has--

(i) breached or contravened any provision of this Act or the Central Bank of Malaysia Act 2009; or

(ii) failed to comply with any specification or standards under this Act, regardless that there has been no prosecution or other action in respect of such breach, contravention or non-compliance;

(d) the shareholder, director or any person concerned with the operation or management of the registered person has been convicted of an offence under this Act or an offence involving fraud or dishonesty under any other written law; or

(e) the person has been wound-up or otherwise dissolved or a receiver or manager of the property of the person has been appointed. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/22.Surrender of licence or notification on cessation of business or operations

22. Surrender of licence or notification on cessation of business or operations

(1) A licensed person may surrender its licence to the Bank and upon surrendering, the licensed person shall provide a written notice of its surrender to the Bank.

(2) An approved person or a registered person, as the case may be, shall submit a written notice to the Bank if it ceases to carry on its business.

(3) An approved representative office shall submit a written notice to the Bank if it ceases operations.

(4) The surrender under subsection (1) or the notification under subsection (2) or (3) shall take effect on the date the Bank receives such notice or where a later date is specified in the notice, on that date.

(5) The Bank--

(a) shall publish in the Gazette, as soon as practicable, a notice of a surrender of a licence under subsection (1); or

(b) may publish a notice of cessation of business under subsection (2) or cessation of operations under subsection (3) in such form as the Bank deems appropriate. 

(6) Any person who contravenes subsection (1), (2) or (3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding one year or to a fine not exceeding five million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/23.Effect of revocation, deregistration, surrender, notification on cessation of business or operations, and expiry

23. Effect of revocation, deregistration, surrender, notification on cessation of business or operations, and expiry

(1) Where--

(a) the Minister revokes a licence of a licensed person under section 20;

(b) the Bank--

(i) revokes an approval of an approved representative office under subsection 19(6) or (7) or an approved person under section 20; or

(ii) deregisters a registered person under section 21;

(c) a surrender of a licence by a licensed person or notification by an approved person or registered person on the cessation of its business or an approved representative office on the cessation of its operations has taken effect under subsection 22(4); or

(d) an approval granted to an approved person under section 11 has expired, such person or representative office shall immediately cease to carry on its business or operations, as the case may be.

(2) Notwithstanding the revocation, deregistration, surrender, notification on the cessation of business or operations, or expiry referred to in subsection (1), the person or representative office referred to in subsection (1) shall continue--

(a) to be subject to this Act to the same extent as an authorized person, a registered person or an approved representative office, as the case may be; and

(b) to discharge its obligations, until the Bank is satisfied that the person or representative office has discharged its obligations, or that adequate arrangements have been made to discharge its obligations, which remain undischarged at the time of revocation, deregistration, surrender, notification on the cessation of business or operations or expiry, as the case may be.

(3) A revocation, deregistration, surrender, notification on the cessation of business or operations or expiry referred to in subsection (1) shall not operate so as to--

(a) avoid or affect any agreement, arrangement or transaction entered into by the person or representative office referred to in subsection (1) with any person; or

(b) affect any right, obligation or liability arising under any such agreement, arrangement or transaction. 

(4) Any person who contravenes subsection (1) or fails to discharge its obligations under subsection (2) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/24.Form of establishment

Part III AUTHORIZATION AND REGISTRATION

Division 6 General matters

24. Form of establishment

(1) A person who is to be licensed under section 10 to carry on banking business, insurance business (other than a person who is to be a professional reinsurer) or investment banking business shall be a public company.

(2) The Bank may specify the form of establishment of--

(a) a person who is to be licensed as a professional reinsurer; or

(b) a person who is to be approved under section 11 to carry on an approved business. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/25.Establishment or relocation of office of authorized persons

25. Establishment or relocation of office of authorized persons

(1) Unless otherwise specified by the Bank, no licensed person shall establish or relocate an office in or outside Malaysia without the prior written approval of the Bank.

(2) Where an approved person establishes or relocates an office in or outside Malaysia, such approved person shall notify the Bank in writing within such period as may be specified by the Bank.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/26.Fees

26. Fees

(1) Regulations may be made under section 260 to prescribe--

(a) any fee to be paid by an authorized person or a registered person in respect of its authorization or registration, establishment of any office or the annual fee; and

(b) a processing fee to be paid by an applicant for authorization under section 9 or a person who has complied with paragraph 17(1)(a), of such amount, or calculated at such rate or in such manner as set out in the regulations.

(2) Any fee paid to the Bank under this section shall be paid into and form part of the Federal Consolidated Fund.

(3) Any unpaid fees may be sued for and recovered as a civil debt due to the Government and in addition, the court may order for a payment of a penalty for late payment up to an amount equivalent to twice the amount of the fees unpaid and costs of recovering the amount including but not limited to costs of legal proceedings.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/27.Publication of names of authorized persons and registered persons

27. Publication of names of authorized persons and registered persons

(1) The Bank shall, from time to time, publish in the Gazette a list of all licensed persons and any additions to or deletions from the list.

(2) The Bank shall, from time to time, publish a list of approved persons and registered persons in such form as the Bank deems appropriate.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/28.Holding out as authorized person or registered person

28. Holding out as authorized person or registered person

(1) No person shall hold himself out to be--

(a) an authorized person unless he is authorized; or

(b) a registered person unless he is registered, under this Act. 

(2) Any person who contravenes paragraph (1)(a) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.

(3) Any person who contravenes paragraph (1)(b) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/29.Acting on behalf of unlicensed person

29. Acting on behalf of unlicensed person

(1) No person shall act on behalf of a foreign institution or any person who is not licensed under this Act in relation to carrying on banking business, investment banking business, insurance business or accepting deposits in Malaysia unless approved in writing by the Bank.

(2) Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/30.Designation and revocation of designation of payment systems

Part IV PAYMENT SYSTEMS

Division 1 Designation of payment systems and payment instruments

30. Designation and revocation of designation of payment systems

(1) Where the Bank is of the opinion that a disruption in the operations of the payment system could affect public confidence in the overall payment systems of Malaysia or impact the monetary or financial stability of Malaysia--

(a) in the case of an operator of a payment system who is subject to the supervision or oversight of another supervisory authority in Malaysia, the Minister on the recommendation of the Bank and such supervisory authority; or

(b) in any other case, the Bank with the concurrence of the Minister, may, by an order published in the Gazette, designate such payment system as a designated payment system.

(2) In the case of an operator of a payment system who is subject to the supervision or oversight of another supervisory authority in Malaysia, the Bank shall consult with such supervisory authority in forming an opinion under subsection (1).

(3) If the circumstances in subsection (1) no longer apply, the designation of a payment system may be revoked--

(a) in the case of an operator of a payment system who is subject to the supervision or oversight of another supervisory authority in Malaysia, by the Minister, on the joint recommendation of the Bank and such supervisory authority; or

(b) in any other case, by the Bank, by an order published in the Gazette.

(4) The Bank and the supervisory authority shall regularly review the status of the payment system designated under paragraph (1)(a), to determine whether the circumstances under subsection (1), no longer applies for purposes of making the joint recommendation under paragraph (3)(a).

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/31.Designation of payment instruments

31. Designation of payment instruments

Where the Bank is of the opinion that--

(a) a payment instrument may be of widespread use as a means of making payment and may affect the payment systems in Malaysia; and

(b) it is necessary to maintain the integrity, efficiency and reliability of the payment instrument, the Bank may, with the concurrence of the Minister, by an order published in the Gazette, designate such payment instrument as a designated payment instrument.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/32.Application of this Act on payment systems

Part IV PAYMENT SYSTEMS

Division 2 Requirements for operation of payment systems and issuance of designated payment instruments

32. Application of this Act on payment systems

Unless otherwise prescribed by the Bank, this Act shall apply to a person outside Malaysia who is an operator of a payment system which accepts payment instructions or settlement instructions from participants in Malaysia.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/33.Power of Bank to specify standards for payment systems

33. Power of Bank to specify standards for payment systems

(1) The Bank may specify standards for payment systems--

(a) for promoting safety, integrity, efficiency or reliability of the designated payment system, the payment system set out in Division 1 of Part 1 of Schedule 1, the payment system set out in paragraph 9 of Part 2 of Schedule 1 or the designated payment instrument including facilitating interoperability, technical specifications and security standards; or

(b) in the interest of current or prospective participants of the designated payment system, the payment system set out in Division 1 of Part 1 of Schedule 1 or the payment system set out in paragraph 9 of Part 2 of Schedule 1 or users. 

(2) An operator of a designated payment system, an approved operator of a payment system, a registered operator of a payment system or an approved issuer of a designated payment instrument shall at all times comply with the standards specified by the Bank under subsection (1) which are applicable to such operator or issuer

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/34.Direction to participants of designated payment system

34. Direction to participants of designated payment system

The Bank may issue directions in writing to any participant of a designated payment system if the Bank is of the opinion that it is necessary for ensuring the integrity and proper management of the designated payment system or it is in the interest of the public to do so.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/35.Operational arrangements

35. Operational arrangements

(1) An operator of a designated payment system, approved operator of a payment system or approved issuer of a designated payment instrument shall establish the following operational arrangements:

(a) rules, procedures and requirements setting out the rights, liabilities or any other obligations of--

(i) the operator and participants of the designated payment system;

(ii) the approved operator of a payment system and its participants; and

(iii) the approved issuer of a designated payment instrument and its users, including the risks that such participants or users may incur; and

(b) measures to ensure the safety, security and operational reliability of the designated payment system, payment system set out in Division 1 of Part 1 of Schedule 1 or the designated payment instrument including contingency arrangements. 

(2) In addition to the operational arrangements under subsection (1), an operator of a designated payment system or approved operator of a payment system shall establish the following operational arrangements:

(a) procedures, controls and measures for the management of credit, liquidity or settlement risk, including rules determining the time when a transfer order is final in the case of payment systems that have been issued a certificate of finality by the Bank under section 38; and

(b) criteria for participation in the designated payment system or payment system set out in Division 1 of Part 1 of Schedule 1. 

(3) Without limiting the generality of subsection (1), the approved issuer of a designated payment instrument shall establish measures to ensure prudent management of funds collected from the users, including measures to ensure that such funds are always available for repayment to the users of the designated payment instrument.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/36.Power of Bank to inspect

36. Power of Bank to inspect

The Bank may, in considering whether--

(a) to designate or recommend to the Minister to designate a payment system under section 30;

(b) to designate a payment instrument under section 31;

(c) to recommend to the Minister to include an operation of a payment system into Division 1 of Part 1 of Schedule 1 under section 264; or

(d) to recommend to the Minister to include an operation of a payment system into Part 2 of Schedule 1 under section 264, inspect the premises, apparatus, equipment, machinery, documents and transactions relating to the payment system or payment instrument, upon giving a written notice to the operator or issuer.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/37.Interpretation

Part IV PAYMENT SYSTEMS

Division 3 Finality of payment and netting arrangement

37. Interpretation

For the purposes of this Division--

"certificate of finality"

means a certificate issued by the Bank to any designated payment system under section 38;

"certified designated payment system"

means a designated payment system that has been issued a certificate of finality by the Bank which may include a payment system operated by the Bank, or by any body corporate established or acquired by the Bank under the Central Bank of Malaysia Act 2009 or by any person authorized by the Bank;

"insolvency administrator"

includes a receiver, manager, receiver and manager, liquidator, provisional liquidator, judicial manager, curator, special administrator or any other person, however styled, authorized under any law in or outside Malaysia to take control of a person's property for the benefit of that person's creditors in the event that the person is, or is likely to become, insolvent;

"netting arrangement"

means an arrangement in writing to convert several claims or obligations into one net claim or one net obligation;

"transfer order"

means--

(a) an instruction by a participant of a designated payment system to place at the disposal of a recipient an amount of money by means of account book-entry;

(b) an instruction which, when settled, results in the assumption or discharge of a payment obligation as defined by the rules of a designated payment system; or

(c) an instruction by a participant of a designated payment system either to settle an obligation for the transfer of book-entry securities or for the transfer of such securities. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/38.Power of Bank to issue certificate of finality

38. Power of Bank to issue certificate of finality

The Bank may, with the concurrence of the Minister, by an order published in the Gazette, issue a certificate of finality to a designated payment system where the following criteria are met:

(a) the payment system poses or is likely to pose a systemic risk;

(b) the settlement of transfer order is effected within the designated payment system itself; and

(c) the operator of the payment system has complied with the requirements as may be specified by the Bank. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/39.Revocation of certificate of finality

39. Revocation of certificate of finality

The Bank may, with the concurrence of the Minister, by an order published in the Gazette, revoke a certificate of finality if the Bank is of the opinion that--

(a) any of the criteria specified in section 38 is no longer met; or

(b) the operator of the certified designated payment system has breached or contravened any provision of this Act. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/40.Application of this Division

40. Application of this Division

(1) The provisions of this Division shall apply to--

(a) any transfer order sent through a certified designated payment system; and

(b) any netting arrangement, in respect of claims or obligations arising from a transfer order that is final under subsection 42(1), entered into between an operator and a participant or between participants only in respect of a certified designated payment system. 

(2) Any written law relating to bankruptcy and insolvency shall continue to apply, but where there is any conflict or inconsistency between the provisions of this Division and the written law relating to bankruptcy and insolvency, the provisions of this Division shall prevail.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/41.Transfer order made after appointment of insolvency administrator

41. Transfer order made after appointment of insolvency administrator

This Division shall not apply in relation to any transfer order which is sent through a certified designated payment system after the expiry of the day on which an insolvency administrator is appointed in respect of an operator or a participant of a certified designated payment system.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/42.Finality of payment and netting arrangement

42. Finality of payment and netting arrangement

(1) A transfer order shall be valid and enforceable by and against an operator or a participant of a certified designated payment system and shall be final and shall not be revoked, reversed or set aside by any person from the time the transfer order is determined to be final under the rules of the certified designated payment system required to be established under paragraph 35(2)(a) and no order shall be made by any court for the rectification or stay of such transfer order.

(2) A netting arrangement shall be valid and enforceable and an operator or a participant of a certified designated payment system shall do whatever is permitted or required under the netting arrangement in order to give effect to the netting arrangement.

(3) Any payment or settlement obligations owed to an operator or a participant of a certified designated payment system under the netting arrangement that has not been discharged--

(a) is provable in insolvency proceedings; and

(b) may be recovered for the benefit of creditors. 

(4) Without limiting the generality of subsection 40(2), any transfer order that is final and irrevocable under subsection (1) and any netting arrangement that is valid and enforceable under subsections (2) and (3), shall be given effect notwithstanding anything to the contrary contained in--

(a) sections 223 and 224 of the Companies Act 1965 in relation to the avoidance of dispositions of property;

(b) section 296 of the Companies Act 1965, section 59 of the Bankruptcy Act 1967 [Act 360] or subsection 40(1) of the Pengurusan Danaharta Nasional Berhad Act 1998 [Act 587] in relation to the disclaiming of an onerous property;

(c) section 219 of the Companies Act 1965 and section 47 of the Bankruptcy Act 1967 in relation to the time of commencement of insolvency;

(d) section 293 of the Companies Act 1965 and section 53 of the Bankruptcy Act 1967 in relation to undue preference; and

(e) section 222 of the Companies Act 1965 and section 10 of the Bankruptcy Act 1967 in relation to the power to stay or restrain proceedings. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/43.Preservation of rights

43. Preservation of rights

For the avoidance of doubt, the provisions of this Division shall not restrict or preclude any person from enforcing his rights under the law in so far as it does not affect the finality of the transfer order or the validity and enforceability of a netting arrangement under this Division.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/44.Non-recognition of insolvency order by foreign court

44. Non-recognition of insolvency order by foreign court

Notwithstanding any other written law, a court shall not recognize or give effect to an order of a foreign court exercising jurisdiction under any law of insolvency outside Malaysia in so far as the making of the order would be inconsistent with or contrary to the provisions of this Division.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/45.Requirement to notify in event of insolvency, etc.

45. Requirement to notify in event of insolvency, etc.

(1) Where an operator of a certified designated payment system--

(a) is insolvent or is likely to become insolvent;

(b) has become or is likely to become unable to meet any or all of its obligations; or

(c) has suspended payments or compounded with its creditors, such operator shall immediately notify the participants of the certified designated payment system.

(2) Where a participant of a certified designated payment system--

(a) is insolvent or is likely to become insolvent;

(b) has become or is likely to become unable to meet any or all of its obligations; or

(c) has suspended payments or compounded with its creditors, such participant shall immediately notify the operator who shall notify the other participants of the certified designated payment system.

(3) Any person who contravenes subsection (1) or (2) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/46.Interpretation

Part V PRUDENTIAL REQUIREMENTS

46. Interpretation

For the purposes of Divisions 1, 2, 3 and 4, "institution" refers to an authorized person or operator of a designated payment system.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/47.Power of Bank to specify standards on prudential matters

Part V PRUDENTIAL REQUIREMENTS

Division 1 Standards on prudential matters

47. Power of Bank to specify standards on prudential matters

(1) The Bank may specify standards on prudential matters to promote--

(a) the sound financial position of an institution; or

(b) integrity, professionalism and expertise in the conduct of the business, affairs and activities of an institution. 

(2) Without limiting the generality of subsection (1), standards specified under that subsection may include standards relating to--

(a) capital adequacy;

(b) liquidity;

(c) corporate governance;

(d) risk management;

(e) related party transactions;

(f) maintenance of reserve funds;

(g) insurance funds; and

(h) prevention of an institution from being used, intentionally or unintentionally, for criminal activities. 

(3) For purposes of paragraph (2)(e), "related party transactions" means transactions with an institution involving--

(a) a director, officer or shareholder of the institution;

(b) any person in a position to influence or control the institution or affect the decisions of the institution;

(c) a relative or dependent of any person referred to in paragraph (a) or (b); or

(d) any other person as may be specified by the Bank, which in the opinion of the Bank may cause the institution to be in a conflict of interest situation. 

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/48.Institution, director and officer to comply with standards

48. Institution, director and officer to comply with standards

(1) Every institution shall at all times--

(a) comply with the standards as may be specified by the Bank under subsection 47(1) which are applicable to such institution;

(b) ensure that its internal policies and procedures are consistent with the standards as may be specified by the Bank under subsection 47(1); and

(c) whether or not standards have been specified by the Bank under subsection 47(1), manage its business, affairs and activities in a manner consistent with sound risk management and governance practices which are effective, accountable and transparent. 

(2) Every director and officer of an institution shall at all times comply with the internal policies and procedures adopted by such institution including internal policies and procedures to implement the standards as may be specified by the Bank under subsection 47(1).

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/49.Registered operator of payment system to comply with standards

49. Registered operator of payment system to comply with standards

The Bank may require a registered operator of a payment system to comply with all or any standards as may be specified by the Bank under subsection 47(1), or any part of such standards, with such amendments as the Bank deems necessary, if the Bank is of the opinion that it is necessary to promote public confidence in, or for the safety, reliability and efficiency of, the payment systems of Malaysia.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/50.Single counterparty exposure limit for licensed person

50. Single counterparty exposure limit for licensed person

(1) No licensed person shall have an exposure to a single counterparty which exceeds the limit as may be specified by the Bank under subsection 47(1).

(2) An exposure to a single counterparty referred to in subsection (1) shall include an exposure to any group of persons connected to such single counterparty but shall not include any exposure to, and any exposure explicitly guaranteed by, the Bank or the Government.

(3) For the purposes of this section, the Bank may specify what constitutes "connected", "counterparty" or "exposure".

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/51.Restriction on payment of dividend by licensed person

51. Restriction on payment of dividend by licensed person

(1) No licensed person shall declare or pay any dividend on its shares except with the prior written approval of the Bank or where the Bank has specified standards permitting the declaration of payments of any dividend under subsection 47(1).

(2) Where there is an application made by a licensed person for approval under subsection (1) in respect of the proposed amount of dividend to be declared, the Bank shall, in considering whether or not to grant an approval on the proposed amount or approve a reduced amount of dividend payment, have regard to the prevailing and prospective financial condition of the licensed person including its ability to comply with any standards as may be specified by the Bank under paragraph 47(2)(a).

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/52.Maintenance of assets in Malaysia by licensed person

52. Maintenance of assets in Malaysia by licensed person

The Bank may require a licensed person to hold at all times all or such part of its assets, as may be specified by the Bank, in Malaysia.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/53.Interpretation

Part V PRUDENTIAL REQUIREMENTS

Division 2 Corporate governance

53. Interpretation

For the purposes of this Division, "chairman" means chairman of the board of directors.

Unannotated Statutes of Malaysia - Principal Acts/FINANCIAL SERVICES ACT 2013 Act 758/FINANCIAL SERVICES ACT 2013 Act 758,,/54.Chairman, directors and chief executive officer of institution