KL.EC.100/6/2007/3(b)-10(b)
1 April 2007
TO WHOM IT MAY CONCERN
Tuan,
Amendments to Exchange Control Notices
Following the announcement of the liberalisation of foreign exchange
administration rules on 21 March 2007, attached are the related circular letters on
the new rules as follows:
(i)
ECM 2 - Dealings in Gold and Foreign Currency
(Reference: KL.EC.100/6/2007/3(b), KL.EC.100/1/2)
•
(ii)
ECM 4 - General Payments
(Reference: KL.EC.100/6/2007/4(b), KL.EC.100/1/4)
•
1
Allow a resident to enter into forward foreign exchange
contracts with a licensed onshore bank1 to hedge foreign
currency loan repayment up to the full loan amount
(previously only up to the amount payable within 24
months).
Abolish the restriction on payments in foreign currency
between residents for the settlement of foreign currency
investment products offered onshore.
Licensed onshore bank refers to a commercial bank or an investment bank licensed under the
Banking and Financial Institutions Act 1989 or an Islamic bank licensed under Islamic Banking Act
1983.
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KL.EC.100/6/2007/3(b)-10(b)
(iii)
2
ECM 6 - Credit Facilities to Non-residents
(Reference: KL.EC.100/6/2007/5(b), KL.EC.100/1/6)
•
Abolish the previous RM200 million limit on ringgit overdraft
facilities to a non-resident stockbroking company or a
custodian bank to facilitate the settlement for purchase of
ringgit instruments traded on Bursa Malaysia to avoid
settlement failure due to inadvertent delays.
•
Expand the scope on the utilisation of the overdraft facilities
to also include ringgit instruments settled through the Real
Time Electronic Transfer of Funds and Securities System.
•
Abolish the limit on the number of residential or commercial
property loans obtained by a non-resident (previously
limited to only three loans).
•
Allow a resident corporation (with or without domestic ringgit
credit facilities) to lend in foreign currency, the ringgit
proceeds from the listing of shares through an Initial Public
Offering on the Main Board of Bursa Malaysia to a nonresident.
•
Allow a resident corporation with domestic ringgit credit
facilities to convert ringgit into foreign currency for the
lending to non-residents, provided the total amount of
lending and investments in foreign currency assets2 does
not exceed RM50 million equivalent in aggregate per
calendar year on corporate group basis.
•
Allow a resident individual with domestic ringgit credit
facilities to convert ringgit into foreign currency for the
lending to non-residents, provided the total amount of
lending and investments in foreign currency assets does not
exceed RM1 million equivalent in aggregate per calendar
year.
Investment in foreign currency assets, amongst others, includes –
• Lending to non-residents;
• Placement of foreign currency funds onshore and offshore; and
• Purchase of approved foreign currency investment products marketed by licensed onshore
banks and any resident permitted by the Controller of Foreign Exchange.
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KL.EC.100/6/2007/3(b)-10(b)
(iv)
ECM 7 - Foreign Currency Accounts
(Reference: KL.EC.100/6/2007/6(b), KL.EC.100/1/7)
•
(v)
Allow resident individuals to open and maintain joint foreign
currency accounts for any purpose.
ECM 9 - Investment Abroad
(Reference: KL.EC.100/6/2007/7(b), KL.EC.100/1/9)
•
Allow a non-resident corporation to utilise offshore,
proceeds arising from the listing of shares through an Initial
Public Offering on the Main Board of Bursa Malaysia.
•
Allow a resident corporation to utilise proceeds offshore
arising from the listing of shares through an Initial Public
Offering on the Main Board of Bursa Malaysia.
•
Allow a resident corporation to utilise up to RM100 million
equivalent from permitted foreign currency credit facilities
for investment in foreign currency assets.
•
Allow a resident corporation with domestic ringgit credit
facilities to convert ringgit into foreign currency up to RM50
million in aggregate per calendar year on a corporate group
basis for investment in foreign currency assets (previously
up to RM10 million).
•
Allow a resident individual with domestic ringgit credit
facilities to convert ringgit into foreign currency up to RM1
million in aggregate per calendar year for investment in
foreign currency assets (previously up to RM100,000).
•
Allow a resident unit trust company to invest in foreign
currency assets up to 50% of the Net Asset Value (NAV)
attributable to its resident investors (previously up to 30% of
the NAV).
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KL.EC.100/6/2007/3(b)-10(b)
(vi)
(vii)
•
Allow a resident fund management company to invest in
foreign currency assets up to 50% of the funds managed for
its resident clients with domestic ringgit credit facilities
(previously up to 30% of the funds).
•
Allow a resident insurer and a takaful operator to invest in
foreign currency assets up to 50% of the NAV of the
investment-linked funds marketed by them (previously up to
30% of the NAV).
ECM 10 – Foreign Currency Credit Facilities and Ringgit Credit
Facilities from Non-residents
(Reference: KL.EC.100/6/2007/8(b), KL.EC.100/1/10)
•
Increase the limit of foreign currency credit facilities that can
be obtained by a resident corporation from a licensed
onshore bank and a non-resident as well as through the
issuance of onshore foreign currency bonds, to RM100
million equivalent in aggregate, on corporate group basis
(previously up to RM50 million).
•
Allow a resident corporation to borrow in foreign currency
within the same corporate group, the proceeds arising from
listing of shares on the foreign stock exchanges.
•
Allow the proceeds from the foreign currency credit facilities
to be used in Malaysia or offshore.
ECM 15 – Labuan International Offshore Financial Centre
(Reference: KL.EC.100/6/2007/9(b), KL.EC.100/1/15)
•
Abolish the restriction on a Labuan offshore bank to transact
in ringgit instruments on behalf of non-resident clients.
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KL.EC.100/6/2007/3(b)-10(b)
(viii)
ECM 16 – Approved Operational Headquarters
(Reference: KL.EC.100/6/2007/10(b), KL.EC.100/1/16)
•
Allow an Approved Operational Headquarters with domestic
ringgit credit facilities to convert ringgit into foreign currency
up to RM50 million per calendar year for investment in
foreign currency assets (previously up to RM10 million).
Page 5 of 5