Malaysia legislation
Section 2
Section 2
The Central Bank of Malaysia Act 2009 [Act 701], which is referred to as the “principal Act” in this Act, is amended in subsection 2(1)—
(a)
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
(b)
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:
(a)
cash or cash equivalents, including negotiable instruments and demand deposits;
(b)
security, a securities account or a right to acquire securities; or
(c)
futures agreement or futures account;’;
(c)
by inserting after the definition of “prescribed” the following definitions:
‘ “qualified financial agreement” means—
(a)
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—
(i)
the transactions referred to in the agreement terminate or may be terminated;
(ii)
the termination values of the transactions under paragraph (a) are calculated or may be calculated; and
(iii)
the termination values of the transactions under paragraph (a) 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 qualified financial agreement
Central Bank of Malaysia (Amendment)
5
only with respect to the transactions that are qualified financial transactions and any permitted enforcement by the parties of their rights under such agreement;
(b)
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
(c)
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)
a derivative, whether to be settled by payment or delivery; or
(b)
a repurchase, reverse repurchase or buy-sell back agreement with respect to securities;’;
(d)
by substituting for the full stop appearing at the end of the definition of “supervisory authority” a semi-colon;
and
(e)
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