Act 758 Financial Services Act 2013

1 LAWS OF MALAYSIA Act 758 Financial Services Act 2013 Date of Royal Assent18 Mar 2013 Date of publication in the Gazette22 Mar 2013An 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 and Schedule 9.] PU(B) 276/2013. ARRANGEMENT OF SECTIONS PART I PRELIMINARY 1. Short title and commencement 2.

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 6. Regulatory objectives 7. Powers and functions of Bank PART III AUTHORIZATION AND REGISTRATION Division 1 Page 1 of 180 Authorized business 8. Authorized business to be carried on by authorized person 9. Application for authorization 10.

3 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 Division 2 Restriction on dealings of authorized persons 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 Division 3 Registered business 17. Registered business to be carried on by registered person 18.

4 Registered person to comply with standards Division 4 Representative office 19. Requirements for representative office Division 5 Revocation, deregistration, surrender or cessation of business or operations 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 Division 6 General matters 24. Form of establishment 25.

5 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 Page 2 of 180 PAYMENT SYSTEMS Division 1 Designation of payment systems and payment instruments 30. Designation and revocation of designation of payment systems 31. Designation of payment instruments Division 2 Requirements for operation of payment systems and issuance of designated payment instruments 32.

6 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 Division 3 Finality of payment and netting arrangement 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.

7 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 46. Interpretation Division 1 Standards on prudential matters 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.

8 Maintenance of assets in Malaysia by licensed person Division 2 Corporate governance Page 3 of 18053. 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 Division 3 Transparency requirements 63.

9 Interpretation 64. Maintenance of accounting records and information 65. Compliance with approved accounting standards 66. Publication of Financial statements Division 4 Auditors 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 Division 5 Appointed actuaries 74. Appointment of actuary by licensed insurer 75.

10 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 Division 6 Insurance funds Page 4 of 18081. Establishment and maintenance of insurance funds 82. Requirements relating to insurance funds 83. Withdrawal from insurance funds 84. Assumption of risk Division 7 Subsidiaries 85. Establishment or acquisition of subsidiaries and acquisition or holding of material interest in corporation PART VI OWNERSHIP, CONTROL AND TRANSFER OF BUSINESS 86.