Malaysia legislation
Section 3
of MALAYSIA DEPOSIT INSURANCE CORPORATION (AMENDMENT) ACT 2016
Section 3
Amendment of section 2
(a)
in subsection (1)—
(i)
by substituting for the definition of “deposit-taking member” the following definition:
‘ “deposit-taking member” means a member institution that is an Islamic bank or a licensed bank;’;
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(ii)
by inserting after the definition of “liabilities”
the following definition:
‘ “licensed bank” has the same meaning as defined under subsection 2(1) of the Financial
Services Act 2013;’;
(iii)
by inserting after the definition of “insurer member”
the following definition:
‘ “Islamic bank” means a bank licensed under the Islamic Financial Services Act 2013, other than a licensed international Islamic bank;’;
(iv)
by deleting the definition of “Islamic asset”;
(v)
by deleting the definition of “conventional asset”;
(vi)
in the definition of “Islamic deposit”, by deleting the words “on any basis including custody or profit sharing”;
(vii)
in the definition of “conventional deposit”, in paragraph (b), by inserting after the words
“giving of security” the words “unless the sum of money is provided or given as collateral or security for the repayment of any loan made by or debt owing to the deposit-taking member”;
(viii)
in the definition of “member institution”, by substituting for the word “corporation” the word
“person”;
(ix)
by substituting for the definition of “financial institution” the following definition:
‘ “financial institution” means a licensed bank, an Islamic bank, an insurance company or a takaful operator;’;
Malaysia Deposit Insurance Corporation (Amendment)
(x)
by substituting for the definition of “Islamic financing facility” the following definition:
‘ “Islamic financing facility” has the same meaning assigned to the definition of “financing facility” under subsection 2(1) of the Islamic
Financial Services Act 2013;’;
(xi)
by inserting after the definition of “life policy”
the following definition:
‘ “liquidator” includes a provisional liquidator, where applicable;’;
(xii)
in the national language text, by deleting the existing definition of “pengendali takaful”;
(xiii)
by substituting for the definition of “takaful operator” the following definition:
‘ “takaful operator” means a takaful operator licensed to carry on takaful business under the Islamic Financial Services Act 2013, other than a takaful operator licensed to carry on solely retakaful business and an international takaful operator.’;
(xiv)
by deleting the definition of “qualified financial agreement”;
(xv)
by deleting the definition of “Islamic financial business”;
(xvi)
by substituting for the definition of “Islamic banking business” the following definition:
‘ “Islamic banking business” has the same meaning as defined under subsection 2(1) of the Islamic Financial Services Act 2013;’;
(xvii)
by substituting for the definition of “general policy” the following definition:
‘ “general policy” means a policy issued by an insurance company licensed under the
Financial Services Act 2013 to carry on the business of general insurance;’;
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(xviii)
by inserting after the definition of “participating life” the following definition:
‘ “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 insurance company, from the assets of an insurance fund under the Financial Services
Act 2013;’;
(xix)
by inserting after the definition of “Islamic financing facility” the following definition:
‘ “Islamic securities” means securities which are in accordance with Shariah;’;
(xx)
by substituting for the definition of “general takaful certificate” the following definition:
‘ “general takaful certificate” means a takaful certificate issued by a takaful operator licensed under the Islamic Financial Services
Act 2013 to carry on the business of general takaful;’;
(xxi)
by substituting for the definition of “capital instruments” the following definition:
‘ “capital instruments” means preference shares, loan stocks, subordinated term debts or other instruments approved by Bank Negara
Malaysia as being eligible to be capital for the purposes of the Financial Services Act 2013
[Act 758] or the Islamic Financial Services
Act 2013 [Act 759];’;
(xxii)
by substituting for the definition of “insurance company” the following definition:
‘ “insurance company” means an insurer licensed to carry on insurance business under the Financial Services Act 2013, other than an insurer licensed to carry on solely reinsurance business and Danajamin Nasional Berhad;’;
Malaysia Deposit Insurance Corporation (Amendment)
(xxiii)
in the definition of “assessment year”, by inserting after the word “premiums” the words “and levies”;
(xxiv)
in the definition of “takaful”, by substituting for the words “Takaful Act 1984” the words “Islamic
Financial Services Act 2013”; and
(xxv)
by substituting for the definition of “family solidarity takaful” the following definition:
‘ “family takaful” means takaful under a family takaful certificate;’;
(b)
by inserting after subsection (1) the following subsection:
“Qualified financial agreements
(1a)
For the purposes of this Act—
(a)
“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, Islamic security, a securities account, an Islamic securities account, or a right to acquire securities or Islamic securities; or
(iii)
a futures agreement or a futures account;
(b)
“derivative” means any agreement, including an option, a swap, futures contract or forward contract, whose market price, value, delivery or payment obligations is derived from, referenced to or based on,
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but not limited to, securities, commodities, assets, rates (including interest rates or exchange rates) or indices;
(c)
“Islamic derivative” means any agreement, including an option, a swap, futures contract or forward contract, made in accordance with Shariah, whose market price, value, delivery or payment obligations is derived from, referenced to or based on, but not limited to, Islamic securities, commodities, assets, rates (including profit rates or exchange rates) or indices;
(d)
“financial intermediary” means—
(i)
a clearing agency; or
(ii)
a person, including a broker, bank or trust company, that in the ordinary course of business maintains securities accounts,
Islamic securities accounts or futures accounts for others;
(e)
“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,
Malaysia Deposit Insurance Corporation (Amendment)
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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;
(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);
(iii)
an agreement to borrow or lend securities or commodities, including an agreement to transfer securities or commodities under which the borrower may repay the loan with other securities or commodities, cash or cash equivalents; or
(iv)
any other agreement as prescribed by Bank Negara Malaysia under the
Financial Services Act 2013 or the
Islamic Financial Services Act 2013;
(f)
“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; and
(g)
“qualified financial transaction” means—
(i)
a derivative or an Islamic derivative, whether to be settled by payment or delivery; or
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(ii)
a repurchase, a reverse repurchase or a buy-sell back agreement with respect to securities or Islamic securities.”; and
(c)
in subsection (2), by inserting after the words “notifications,”
the words “directives,”.
Amendment of section 10