Section 40 — DEVELOPMENT FINANCIAL INSTITUTIONS ACT 2002

(2)

For the purpose of subsection (1), the minimum amount of assets to be held in Malaysia shall be expressed as a percentage of all or such of the liabilities of the prescribed institution as the Bank may specify.

(3)

Any prescribed institution that contravenes subsection (1)

commits an offence and shall on conviction be liable to a fine not exceeding fifty million ringgit.

(4)

For the purpose of subsection (1), the Bank may specify a period of not less than seven days within which the prescribed institution shall comply with the specification.

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Power of Bank to specify other prudential requirements

*41. (1) The Bank may specify standards for other prudential matters to promote—

(a)

the sound financial position of a prescribed institution; or

(b)

integrity, professionalism and expertise in the conduct of the business, affairs and activities of a prescribed institution.

(2)

Without prejudice to the generality of subsection (1), standards specified under that subsection may include standards relating to—

(a)

corporate governance;

(b)

risk management; and

(c)

prevention of a prescribed institution from being used, intentionally or unintentionally, for criminal activities.

(3)

The Bank may, in the interest of the prescribed institution, specify standards on prudential matters under this section to a subsidiary of a prescribed institution.

(4)

Every prescribed institution and a subsidiary of a prescribed institution shall at all times—

(a)

comply with the standards as may be specified by the Bank under this section;

(b)

ensure that its internal policies and procedures are consistent with the standards as may be specified by the

Bank under this section; and

(c)

whether or not standards have been specified by the Bank under this section, manage its business, affairs and activities

*NOTE—General savings–see subsections 111(2) and (3) of the Development Financial Institutions

(Amendment) Act 2015 [Act A1502] which comes into operation on 31 January 2016.

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in a manner consistent with sound risk management and governance practices which are effective, accountable and transparent.

(5)

Every director and officer of a prescribed institution and a subsidiary of a prescribed institution shall at all times comply with the internal policies and procedures adopted by such institution or subsidiary including internal policies and procedures to implement the standards as may be specified by the Bank under this section.

Amendment of constituent documents