Central Bank of Malaysia Act 2009 · Updated to 1 Nov 2020 · Chapter 1
32. Power for averting or reducing risk to financial stability
Feedback & supportWithout prejudice to section 31, the Bank may, for the purpose of averting or reducing any risk to financial stability—
Bank
“Bank” means Bank Negara Malaysia or in English, the “Central Bank of Malaysia”;
provide liquidity assistance to any financial institution;
enter into arrangements with other central banks to provide liquidity assistance to subsidiaries or branches outside Malaysia of any financial institution established in
Malaysia; or
in the case of any financial institution which has ceased to be viable or which the Bank considers likely to become non-viable—
purchase or subscribe to the shares or other capital instruments issued by such financial institution;
provide financing to any other financial institution or a body corporate established by the Bank under paragraph 48(1)(d) to purchase the whole or part of the business, assets, liabilities, shares or other capital instruments of such financial institution; or
subject to subsection 38(2), by order published in the Gazette, vest in the Bank, a body corporate established by the Bank under paragraph 48(1)(d), another financial institution or any other person the whole or part of the business, assets or liabilities of, or all or any of the shares or other capital instruments issued by, such financial institution.
The enforcement by the parties of their rights under a qualified financial agreement shall not be affected by the making of an order for the vesting of, the whole or part of the business, assets or liabilities of, or all or any of the shares or other capital instruments issued by, a financial institution pursuant to subparagraph (1)(c)(iii).
qualified financial agreement
“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 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;
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Notwithstanding the definition of “financial institution” in subsection 2(1), the financial institution for purposes of paragraph 1(a)
financial institution
“financial institution” means a person carrying on a financial business regulated under the laws enforced by the Bank and in addition includes any— (a) person who operates any payment system or issues any payment instrument; and (b) person carrying on any other financial business as the Minister may prescribe;
shall include any financial institution which is under the supervision or oversight of any other supervisory authority or is not under the supervision or oversight of the Bank or any other supervisory authority.