under section 11 to carry on an authorized business shall submit the application in writing to the Bank together with such documents or information as may be specified by the Bank.
Grant of licence by Minister
10. (1) in assessing an application duly made under section 9
to carry on any licensed business, the Bank shall have regard to all the factors set out in part 1 and part 2 of schedule 5 and such other matters that the Bank considers relevant.
(2) Upon making an assessment under subsection (1) and where the Bank is satisfied that such applicant may be granted a licence, the Bank shall make a recommendation to the Minister to grant a licence under subsection (4) with or without conditions. (3) The Bank shall notify the applicant in writing if the Bank does not make a recommendation to the Minister under subsection (2). (4) Where the Bank makes a recommendation pursuant to subsection (2), the Minister may grant a licence to the applicant to carry on banking business, insurance business or investment banking business, with or without conditions.
(5) The Bank shall notify the applicant in writing of the decision of the Minister under subsection (4).
(6) Where the Minister grants a licence under subsection (4), a licensed person shall commence its licensed business within a period or such further period as may be specified by the Minister, on the recommendation of the Bank.
approval by bank
11. (1) in assessing an application duly made under section 9
to carry on any approved business, the Bank shall have regard to all the factors set out in part 1 of schedule 5 and such other matters that the Bank considers relevant.
(2) The Bank may—
(a) approve an application to carry on any approved business, with or without conditions, or for such period as stated in the approval; or
(b) reject the application.
(3) A person approved under paragraph (2)(a) to carry on insurance broking business or financial advisory business shall at all times have in force a professional indemnity insurance or takaful of such amount as may be specified by the Bank.
(4) The Bank shall notify the applicant in writing of its decision under subsection (2).
(5) Where the Bank approves an application under paragraph (2)(a), an approved person shall commence its approved business within a period or such further period as may be specified by the Bank. (6) Any person who contravenes subsection (3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million ringgit or to both.
requirements on minimum capital funds or surplus of assets over liabilities
12. (1) No person shall be granted a licence under section 10
or an approval under section 11 if—
(a) in the case of a company, its capital funds; or
(b) in the case of a branch established in Malaysia by a foreign institution, its surplus of assets over liabilities,
is less than the minimum amount as may be prescribed by the Minister in the case of a licensed person, or the Bank in the case of an approved person.
(2) Every authorized person shall, in carrying on its authorized business, maintain at all times such minimum amount applicable to it.
(3) Notwithstanding subsections (1) and (2), the Minister may grant a licence under section 10 to a person subject to the condition that the person meets the minimum amount in the manner and within the period which are specified by the Bank with the approval of the Minister.
(4) For the purposes of this section, “capital funds” means paid-up capital and any reserves as may be specified by the Bank.
(5) Any authorized person who contravenes subsection (2) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.
additional conditions of licence or approval
13. (1) The Minister, upon the recommendation of the Bank,
in the case of a licence granted under section 10, or the Bank in the case of an approval granted under section 11, may at any time in writing amend or revoke any existing condition of an authorization or impose any new conditions thereto.
(2) Any authorized person who fails to comply with any of the conditions imposed by the Minister or the Bank, as the case may be, under subsection (1) or 10(4), paragraph 11(2)(a) or subsection 12(3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million ringgit or to both.
Division 2
Restriction on dealings of authorized persons
authorized person to carry on authorized business only 14. (1) Unless the Bank otherwise specifies, an authorized person
shall not carry on any business or activity in or outside Malaysia except in connection with or for the purposes of its authorized business or as provided in section 15.
(2) Notwithstanding subsection (1) and subject to paragraphs 15(1)(d) and (e), an approved operator of a payment system or approved issuer of a designated payment instrument which is not a licensed person may carry on any business or activity which is not in connection with or for the purposes of its approved business.
(3) Except with the prior written approval of the Bank— (a) a licensed insurer shall not carry on annuity certain
business, financial guarantee insurance business or credit guarantee insurance business; and
(b) a licensed investment bank shall not accept money on deposit which is repayable on demand by cheques, drafts, orders or any other instrument drawn by a depositor on such licensed investment bank.
(4) Any authorized person who contravenes subsection (1) or (3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.
authorized person and operator of designated payment system permitted to carry on certain Islamic financial business 15. (1) Upon an application to the Bank and where the Bank
has granted its written approval—
(a) a licensed bank or licensed investment bank may carry on islamic banking business;
(b) an approved insurance broker may carry on takaful broking business;
(c) an approved financial adviser may carry on islamic financial advisory business;
(d) an operator of a designated payment system or approved operator of a payment system may facilitate participants engaged in islamic financial business to transfer, clear or settle funds or securities; or
(e) an approved issuer of a designated payment instrument may issue a designated islamic payment instrument. (2) A person approved under subsection (1) shall be subject to—
(a) the provisions of the islamic Financial services Act 2013, in particular the provisions of parts iV, Vi, iX, X and Xiii of the Act, in so far as those provisions relate to the business such person is approved to carry on under that subsection; and
(b) any standards, notices, directions, conditions, specifications or requirements specified or made under that Act relating to the business such person is approved to carry on under that subsection.
(3) Without limiting the generality of subsection (2), a licensed bank or licensed investment bank approved under subsection (1) shall, for the purposes of carrying on islamic banking business—
(a) establish and maintain at all times an islamic banking fund with such minimum amount as may be specified by the Bank to fund the operations of its islamic banking business; and
(b) keep all assets and liabilities of its islamic banking business separate from its other assets and liabilities in such manner as may be specified by the Bank.
(4) The islamic banking fund established under paragraph (3)(a) shall—
(a) be funded from the capital funds of the licensed bank or licensed investment bank and other sources of funds as may be specified by the Bank; and
(b) be segregated from the capital funds of the licensed bank or licensed investment bank for the operations of its licensed business under this Act.
(5) Unless otherwise specified by the Bank, the assets of a licensed bank or licensed investment bank in relation to its islamic banking business shall not be—
(a) used to fund the operations of its licensed business under this Act; and
(b) subject to the debts or other obligations of the licensed bank or licensed investment bank in relation to its licensed business under this Act.
(6) An operator of a designated payment system or approved operator of a payment system who has obtained the approval of the Bank under subsection (1) shall—
(a) put in place operational arrangements of the payment system, including liquidity facilities which are; or (b) ensure its business conduct is,
not contrary to shariah in so far as the operational arrangements and the business conduct relate to the business which such operator is approved to carry on under subsection (1).
(7) The board of directors of—
(b) an approved person or operator of a designated payment system which is required by the Bank under subsection 30(3) of the islamic Financial services Act 2013 to establish a shariah committee,
shall, without prejudice to section 56, have due regard to the advice of its shariah committee in respect of the islamic financial business carried on by the person.
(8) For the purposes of this section—
“designated islamic payment instrument”, “islamic banking business”, “islamic financial advisory business”, “shariah committee” and “takaful broking business” have the same meaning as defined in subsection 2(1) of the islamic Financial services Act 2013; “islamic financial business” has the same meaning as defined in subsection 2(1) of the central Bank of Malaysia Act 2009. (9) Any person who fails to obtain the approval of the Bank to carry on any business referred to under subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.
licensed insurer to carry on life or general business
16. (1) A licensed insurer, other than a licensed professional
reinsurer, shall not carry on both life business and general business.
(2) Notwithstanding subsection (1), a licensed life insurer may carry on the business of insuring solely against disease or sickness or solely against medical expenses subject to such requirements and conditions as may be specified by the Bank.
(3) Any licensed insurer who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.
Division 3 Registered business
registered business to be carried on by registered person 17. (1) No person shall carry on registered business unless it
has—
(a) fulfilled such requirements and submitted such documents or information as may be prescribed by the Bank; and (b) notified the Bank in writing of the date of commencement
of its business.
(2) subsection (1) shall not apply in respect of adjusting business to—
(a) an advocate, solicitor or a member of any other profession who acts or assists in adjusting insurance or takaful claims incidental to his practice and who does not hold himself out as an adjuster;
(b) an adjuster of aviation or maritime losses; or
(c) an employee of a licensed insurer or licensed takaful operator under the islamic Financial services Act 2013, who in the course of his employment, acts or assists in adjusting insurance or takaful claims and who does not hold himself out as an adjuster.
(3) Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.
registered person to comply with standards
18. (1) A person is a registered person if such person has
complied with subsection 17(1) and has commenced its registered business.
(2) The Bank may specify standards for registered persons and a registered person shall at all times comply with such standards.
Division 4 Representative office
requirements for representative office 19. (1) No foreign institution shall—
(a) establish a representative office in Malaysia unless it has obtained the prior written approval of the Bank; or (b) through its approved representative office, carry on any
authorized or registered business in Malaysia.
(2) subject to the prohibition under paragraph (1)(b), a foreign institution may carry on, through its approved representative office, only such activities as may be specified by the Bank. (3) An application to establish a representative office shall be made in writing to the Bank together with such documents or information as may be specified by the Bank.
(4) The Bank may on an application having been duly made in accordance with subsection (3) approve the application, with or without conditions, or reject the application.
(5) The Bank may at any time in writing amend or revoke any existing conditions of an approval granted under subsection (4) or impose any new condition thereto.
(6) The Bank may revoke an approval granted under subsection (4) if—
(a) the approved representative office has—
(i) breached or contravened any provision of this Act or the central Bank of Malaysia Act 2009; or
(ii) failed to comply with any condition imposed pursuant to the approval,
regardless that there has been no prosecution or other action in respect of such breach, contravention or non-compliance;
(b) the approved representative office has contravened any law in or outside Malaysia; or
(c) it is in the interest of consumers of financial services and products in Malaysia to do so.
(7) The Bank may, with the approval of the Minister, revoke an approval granted under subsection (4) if it is in the national interest to do so.
(8) Any person who contravenes subsection (1) or (2) or fails to comply with any condition imposed under subsection (4) or (5) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.
Division 5
Revocation, deregistration, surrender or cessation of business or operations
Grounds for revocation of authorization
20. (1) The Minister may, on the recommendation of the Bank,
revoke the licence of a licensed person, and the Bank may revoke the approval of an approved person, on the grounds that—
(a) the Bank has, in connection with the application under section 9, been provided with false, misleading, inaccurate or incomplete information;
(b) the person has not commenced the business in respect of which it is licensed or approved within the period specified by the Minister under subsection 10(6) or by the Bank under subsection 11(5);
(c) the person has ceased to carry on business for which it is licensed or approved;
(d) the person has—
(i) breached or contravened any provision of this Act or the central Bank of Malaysia Act 2009; (ii) failed to comply with any condition of its licence
or approval; or
(iii) failed to comply with any direction issued by the Bank under section 156 or an order under the central Bank of Malaysia Act 2009,
regardless that there has been no prosecution or other action in respect of such breach, contravention or non-compliance;
(e) the person has ceased to be viable in the opinion of the Bank;
(f) the Bank, pursuant to the exercise of its powers under part Xiii relating to such person, has substantially completed all the transfer of business, assets or liabilities of the person;
(g) the person has been wound-up or otherwise dissolved; or
(h) it is in the interest of consumers of financial services and products to do so.
(2) The Minister may, on the recommendation of the Bank, revoke the licence of a licensed person, and the Bank may with the concurrence of the Minister revoke an approval of an approved person, if it is in the interest of the public to do so.
(3) in addition to subsections (1) and (2), the Bank may revoke the approval of an approved person on the grounds that—
(a) in the opinion of the Bank the person is committing or is about to commit an act, or is pursuing or is about to
pursue any course of conduct, that is unsafe or unsound or has failed to commit an act or pursue a course of conduct that is necessary to maintain the safety and soundness of the person;
(b) in the opinion of the Bank, the person is carrying on business in a manner detrimental to the interests of its customers, creditors, participants, users or the public generally;
(c) a receiver or manager of the property of the person has been appointed; or
(d) possession of the property of the person has been taken by or on behalf of a debenture holder pursuant to a charge on the property.
(4) The Bank—
(a) shall publish in the Gazette, as soon as practicable, a notice of a revocation of a licence under subsection (1) or (2); or
(b) may publish a notice of a revocation of an approval under subsection (1), (2) or (3) in such form as the Bank deems appropriate.
Grounds for deregistration