Section 86

the purchase of immovable property;

the construction, reconstruction or renovation of any building or other structure, for residential, commercial or industrial purposes;

“capital funds” means paid-up capital and reserves;

“commodity derivative instrument” includes, to the extent such instrument is not a derivative financial instrument, commodity futures, commodity forward, commodity swap, commodity option or other commodity instruments with similar characteristics, that are reasonably possible to be settled in cash or with securities or other derivative instruments;

“credit facilities” means—

any advance, loan or other facility in whatever form or by whatever name called, by the giving of which the person to whom the same is given has access, directly or indirectly, to the funds of the person giving the same; or

any liability whatsoever incurred on behalf of any person;

“credit token business” means any business where a token, being a cheque, card, voucher, stamps, booklet, coupon, form or other document or thing is given or issued to a person, referred to as “customer”, by the person carrying on the business, referred to as “issuer”, whereby such issuer undertakes—

that on the production of the token, whether or not some other action is also required, the issuer will supply cash, goods or services on credit; or

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that where, on the production of the token to a third party, whether or not any other action is also required, the third party supplies cash, goods or services, the issuer will pay the third party for them, whether or not deducting any discount or commission, in return for payment to be made thereafter to the issuer by the customer, and for the purposes of this definition, the use of a token to operate a machine provided by the issuer or by a third party shall be regarded as the production of the token to the person providing the machine;

“deposit” means a sum of money received or paid on terms—

under which it will be repaid, with or without interest or at a premium or discount;

under which it is repayable, either wholly or in part, with any consideration in money or money’s worth, and such repayment being either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it, regardless whether the transaction is described as a loan, an advance, an investment, a saving, a sale or a sale and repurchase, but does not include money paid bona fide—

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 is not or are not in fact sold, hired or otherwise provided;

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;

without prejudice to 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

in such other circumstances, or to or by such other person, as the Authority may specify;

Act 704

“derivative financial instrument” means futures, forward, swap, or option contract, or other financial instrument with similar characteristics but does not include—

all on-balance-sheet receivables and payables, including those that derive their values or contractually require cash flows from the price of some other security or index, such as mortgage-backed securities, interest-only and principal-only obligations, and indexed debt instruments;

and

option features that are embedded within an on-balance-sheet receivable or payable, such as the conversion feature and call provisions embedded in convertible bonds;

“derivative instrument” means an instrument the value of which depends upon the value of underlying indices or assets such as currencies, securities, commodities or other derivative instruments and includes a derivative financial instrument and a commodity derivative instrument;

“development finance business” means the business of providing capital or other credit facility on terms which would require the same to be utilized for industrial, agricultural, commercial or other economic development; and for the purposes of this definition, “development” includes the commencement of any new industrial, agricultural, commercial or other economic venture or the expansion or improvement of any such existing venture;

“factoring business” means the business of acquiring debts due to any person;

“Labuan banking business” means—

the business of receiving deposits on current account, deposit account, savings account or any other account as may be specified by the Authority;

Labuan investment banking business;

Labuan financial business;

Labuan Islamic banking business;

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such other business as the Authority, with the approval of the Minister, may specify, in any currency (including ringgit where permitted by the *Exchange

Control Act 1953 or such other relevant law in force);

“Labuan financial business” means—

building credit business;

credit token business;

development finance business;

leasing business;

factoring business;

money-broking business;

Labuan Islamic financial business; or

such other business as the Authority, with the approval of the Minister, may specify, in any currency (including ringgit where permitted by the *Exchange

Control Act 1953 or such other relevant law in force);

“Labuan investment banking business” means—

the business of providing credit facilities;

the business of providing consultancy and advisory services relating to corporate and investment matters, including dealing in securities, or making and managing investments on behalf of any person;

the business of undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities;

Labuan Islamic investment banking business;

*NOTE—The Exchange Control Act 1953 [Act 17] has since been repealed by the Financial

Services Act 2013 [Act 758] which comes into operation on 30 June 2013—see sections 271

and 272 of Act 758.

Act 704

Labuan financial business; or

such other business as the Authority, with the approval of the Minister, may specify, in any currency (including ringgit where permitted by the *Exchange

Control Act 1953 or such other relevant law in force);

“Labuan Islamic banking business” means Islamic banking business carried on by a person licensed to do so under Part VI of the Labuan Islamic Financial Services and Securities Act 2010;

“Labuan Islamic financial business” means Islamic financial business carried on by a person licensed to do so under Part VI of the Labuan Islamic Financial Services and Securities Act 2010;

“Labuan Islamic investment banking business” means Islamic investment banking business carried on by a person licensed under

Part VI of the Labuan Islamic Financial Services and Securities

Act 2010;

“leasing business” means the business of letting or sub-letting property on hire for the purpose of the use of such property by the hirer regardless whether the letting is with or without an option to purchase the property, including charters of ships, and for the purpose of this definition, “property” includes any plant, machinery, equipment or other chattel attached or to be attached to the earth and “charters of ships” means bareboat charters only and does not include the transportation of passengers or cargo by sea or the charter of ships on a voyage or time charter;

“Malaysian bank” means a licensed as bank defined in the **Banking and Financial Institutions Act 1989 [Act 372] or an Islamic bank as defined in the ***Islamic Banking Act 1983

[Act 276];

*NOTE—The Exchange Control Act 1953 [Act 17] has since been repealed by the Financial

Services Act 2013 [Act 758] which comes into operation on 30 June 2013—see sections 271

and 272 of Act 758.

**NOTE—The Banking and Financial Institutions Act 1989 [Act 372] has since been repealed by the Financial Services Act 2013 [Act 758] which comes into operation on 30 June 2013—see sections 271 and 272 of Act 758.

***NOTE—The Islamic Banking Act 1983 [Act 276] has since been repealed by the Islamic

Financial Services Act 2013 [Act 759] which comes into operation on 30 June 2013—see sections 282 and 283 of Act 759.

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“money-broking business” means the business of arranging transactions between buyers and sellers in the money or foreign exchange markets as an intermediary in consideration of brokerage fees paid or to be paid, but does not include the buying or selling of ringgit or foreign currencies as a principal in such markets;

“payment system” means any system or arrangement for the transfer, clearing or settlement of funds or securities, but excludes—

a payment system established or operated by the Central

Bank or operated on behalf of the Central Bank, under the Central Bank of Malaysia Act 2009 [Act 701];

a clearing house as defined under the Capital Markets and Services Act 2007;

an in-house payment system operated by a person solely for his own administrative purposes that does not transfer, clear or settle funds or securities for third parties; and

a system that solely facilitates the initiation of payment instructions;

“paid-up capital”, in relation to an applicant under sections 88, 89 and 90 or a bank licensee, means the amount of money contributed by its participants for it to carry on business but does not include credit facilities granted to it by its participants.