Submission Requirements Attachment

1 Submission Requirements for Application for Approval to Operate a Payment System or to Issue a Designated Payment Instrument or to be Registered to Provide Merchant Acquiring Services A. BACKGROUND With the enactment of the Financial Services Act 2013 (FSA) and the Islamic Financial Services Act 2013 (IFSA), which came into force on 30 June 2013, any person who intends to operate a payment system (as set out in Division 1 of Part 1 of Schedule 1 of the FSA or Part 1 of Schedule 1 of the IFSA) or issue a designated payment instrument is required to obtain prior approval of Bank Negara Malaysia (BNM)

2 Pursuant to section 11 of the FSA or section 11 of the IFSA, as the case may be, while any person who intends to provide merchant acquiring services is required to register with BNM pursuant to section 17 of the FSA. As set out in Division 1 of Part 1 of Schedule 1 of the FSA or Part 1 of Schedule 1 of the IFSA, approval is required for the operation of a payment system which: Division 1 of Part 1 of Schedule 1 of FSA Part 1 of Schedule 1 of IFSA (a) enables the transfer of funds from one banking account to another, which includes any debit transfer, credit transfer or standing instructions, but does not include the operation of a remittance system approved under section 40 of the Money Services Business Act 2011.

3 Or (b) provides payment instrument network operation which enables (a) enables the transfer of funds from one Islamic banking account to another, which includes any debit transfer, credit transfer or standing instructions, but does not include the operation of a remittance system approved under section 40 of the Money Services Business Act 2011; or (b) provides Islamic payment instrument network operation 2 Division 1 of Part 1 of Schedule 1 of FSA Part 1 of Schedule 1 of IFSA payments to be made through the use of a payment instrument.

4 Which enables payments to be made through the use of an Islamic payment instrument. The following payment instruments have been prescribed as designated payment instruments or designated Islamic payment instruments: Financial Services (Designated Payment Instruments) Order 2013 Islamic Financial Services (Designated Islamic Payment Instruments) Order 2013 (a) charge card - a payment instrument which indicates a line of credit granted by the issuer to the user and any amount of the credit utilised by the user must be settled in full on or before a specified date, without any extended credit.

5 (b) credit card - a payment instrument which indicates a line of credit or financing granted by the issuer to the user and, where any amount of the credit utilised by the user has not been settled in full on or before a specified date, the unsettled amount may be subject to interest, profit or other charges; (c) debit card - a payment instrument that is linked to a deposit account at a financial institution that can be (a) charge card-i - an Islamic payment instrument which indicates a line of credit or financing based on Shariah principles granted by the issuer to the user and any amount of the credit or financing utilized by the user must be settled in full on or before a specified date, without any extended credit or financing.

6 (b) credit card-i - an Islamic payment instrument which indicates a line of credit or financing based on Shariah principles granted by the issuer to the user and where any amount of the credit or financing utilized by the user has not been settled in full on or before a specified date, the unsettled amount may be subjected to a lesser rebate (ibra ) by the issuer: 3 Financial Services (Designated Payment Instruments) Order 2013 Islamic Financial Services (Designated Islamic Payment Instruments) Order 2013 used: (i) to pay for goods and services; (ii) to withdraw cash from automated teller machines or withdraw cash at participating retail outlets through debit card usage by debiting the user s account.

7 Or (iii) for the purposes of subsubparagraphs (i) and (ii); (d) electronic money - any payment instrument, whether tangible or intangible, that: (i) stores funds electronically in exchange of funds paid to the issuer; and (ii) is able to be used as a means of making payment to any person other than the issuer; and (e) any combination of the payment instruments prescribed in subparagraphs (a) to (d).

8 (c) debit card-i - an Islamic payment instrument based on Shariah principles that is linked to a deposit account at a financial institution that can be used: (i) to pay for goods and services; (ii) to withdraw cash from automated teller machines or withdraw cash at participating retail outlets through debit card-i usage by debiting the user s account; or (iii) for the purposes of subsubparagraphs (i) and (ii); (d) electronic money - any Islamic payment instrument, whether tangible or intangible, that: (i) stores funds electronically in exchange of funds paid to the issuer; and (ii) is able to be used as a means of making payment to any person other than the issuer.

9 And (e) any combination of the Islamic payment instruments prescribed in 4 Financial Services (Designated Payment Instruments) Order 2013 Islamic Financial Services (Designated Islamic Payment Instruments) Order 2013 subparagraphs (a) to (d). B. Submission OF DOCUMENTS OR INFORMATION Operation of a payment system as set out in Division 1 of Part 1 of Schedule 1 of the FSA or Part 1 of Schedule 1 of the IFSA Pursuant to section 9 of the FSA and section 9 of the IFSA, applicants are required to submit an application in writing to BNM together with a covering letter and the following documents and information1: Part 1 1.

10 A certified true copy of its memorandum and articles of association or other constituent documents under which it is established. 2. A certified true copy of its certificate of incorporation or business registration. 3. Certified true copy of its latest audited financial statements or, in the case of a new company which has yet to complete its first financial year cycle, the following documents may be submitted in lieu of the latest audited financial statements: (a) Form 24 (return on allotment of shares) under the Companies Act 1965; (b) Latest bank statement; (c) Latest unaudited management account; and (d) Latest audited financial statements of holding company.