CENTRAL BANK OF MALAYSIA (AMENDMENT) ACT 2013

This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette.

Amendment of section 2

by substituting for the definition of “derivatives” the following definition:

‘ “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, profit rates or exchange rates)

or indices;’;

Central bank of malaysia (amendment)

Act 2013

by inserting after the definition of “director” the following definition:

‘ “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:

cash or cash equivalents, including negotiable instruments and demand deposits;

security, a securities account or a right to acquire securities; or

futures agreement or futures account;’;

by inserting after the definition of “prescribed” the following definitions:

‘ “qualified financial agreement” means—

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—

the transactions referred to in the agreement terminate or may be terminated;

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 paragraph (a); or

any other agreement in respect of a financial transaction that may be entered into by parties in the financial markets that is prescribed as a qualified financial agreement by the

Bank, other than a standardized derivative or an agreement in respect of securities transactions entered into under the rules of a stock exchange and approved clearing house as defined in subsection 2(1) of the

Capital Markets and Services Act 2007

[Act 671];

“qualified financial transaction” means—

a derivative, whether to be settled by payment or delivery; or

a repurchase, reverse repurchase or buy-sell back agreement with respect to securities;’;

by substituting for the full stop appearing at the end of the definition of “supervisory authority” a semi-colon;

and

by inserting after the definition of “supervisory authority”

the following definition:

‘ “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;’.

Amendment of section 15

by deleting the word “and” appearing at the end of paragraph (1)(d);

by inserting after paragraph (1)(d) the following paragraph:

“(da) establish a body corporate or acquire or hold shares of a body corporate, wholly or partly, for the purposes of carrying out the functions of a bridge institution under any written law enforced by the Bank; and”; and

in subsection (5), by substituting for the words

“paragraph (1)(d)” the words “paragraphs 1(d) and (da).”.

Amendment of section 77

transactions between residents, non-residents or residents and non-residents, in ringgit or foreign

Central Bank of Malaysia (Amendment)

9

currency, or involving gold, other precious metals, securities or other financial instruments including derivatives; or

the receipt, surrender or retention of foreign currency, gold or other precious metals:

Provided that any direction given or requirement imposed shall not affect the enforcement by the parties of their rights under a qualified financial agreement.”.

Amendment of section 82

in subparagraph (5), by substituting for the words

“A vesting order” the words “Subject to subsection 32(1a), a vesting order”; and

by inserting after subparagraph (5) the following subparagraphs:

“(5a) Where a vesting order is made and a qualified financial agreement is transferred pursuant to such order, the transferee shall assume all rights and obligations under any qualified financial agreement of the transferor from whom such agreement was transferred.

Where the qualified financial agreement is transferred to a transferee, the enforcement by the parties of their rights under such qualified financial agreement shall be in accordance with the terms of such agreement as if the transferee had always been a party to such agreement.

Where the qualified financial agreement of the transferor is transferred to a transferee and where a person is a counterparty to two or more qualified financial transactions under a qualified financial agreement with the transferor, all or none of such qualified financial transactions shall be transferred to the transferee.

Where a qualified financial agreement relating to financial collateral that applies to any property of the transferor is transferred, that property shall be transferred to the transferee.”.

KUALA LUMPUR