Section 2
Interpretation
of Financial Services Act 2013
In this Act, unless the context otherwise requires—
24 Laws of Malaysia
“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;
Financial Services 25
“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
26 Laws of Malaysia 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);
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
Financial Services 27
“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;
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
28 Laws of Malaysia
“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;
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
Financial Services 29
(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—
30 Laws of Malaysia
(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
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
Financial Services 31
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—
32 Laws of Malaysia
(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;
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
Financial Services 33
“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
34 Laws of Malaysia
(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
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
Financial Services 35
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
36 Laws of Malaysia 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;
Financial Services 37
(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;
*NOTE—the Societies Act 1966 [Act 335] has been superseded by the Societies Act 1966
(Revised–2021) [Act 832] w.e.f. 1 December 2021.
38 Laws of Malaysia
“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
Financial Services 39
(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;
40 Laws of Malaysia
“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
Financial Services 41
(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;
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
42 Laws of Malaysia
(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,
Financial Services 43
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 2013;
“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.
*NOTE―The Companies Act 1965 [Act 125] has been repealed by the Companies Act 2016 [Act 777]
which comes into operation on 31 January 2017―see subsection 620(1) of Act 777.
44 Laws of Malaysia
Relative
(2)
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.
Control
(3)
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
Financial Services 45
(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.
Acting in concert
(4)
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;
46 Laws of Malaysia
(iv)
a 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).
Qualified financial agreements
(5)
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
Financial Services 47
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.
48 Laws of Malaysia
(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.