We wish to bring your attention to some rules under FEN – Notice 3 and Notice 4 issued by Bank Negara Malaysia (BNM);
FEN – Notice 3;
A. Individual, Sole Proprietorship and General Partnership without Domestic Ringgit Borrowing
Resident Individual, sole proprietorship and General Partnership without Domestic Ringgit Borrowing is allowed to invest in Foreign Currency Asset up to any amount.
B. Individual, Sole Proprietorship and General Partnership with Domestic Ringgit Borrowing
A resident individual, sole proprietorship or General Partnership with Domestic Ringgit Borrowing is allowed to invest in Foreign Currency Asset up to: -
RM1 million equivalent in aggregate (based on the investment made by you as an individual as well as the sole proprietorship and general partnership under you) per calendar year using funds sourced from conversion of Ringgit into Foreign Currency.
FEN – Notice 4;
A. Payment in Foreign Currency for Settlement of Derivatives between Residents
Generally, a Resident is NOT ALLOWED to make or receive payment in Foreign Currency, to or from another Resident for settlement of foreign currency denominated derivatives unless:
The said derivatives offered by the Resident issuer is first approved by BNM;
The payment is made to a Resident futures broker for derivative transacted on a Specified Exchange under the Capital Markets and Services Act 2007 (CMSA).
B. Payment in Foreign Currency for Settlement of Derivatives Between Resident and Non-Resident
A Resident is NOT ALLOWED to make or receive payment in Foreign Currency, to or from a Non-Resident for Exchange Rate Derivatives*unless prior approval is obtained from BNM.
[* examples of “Exchange Rate Derivatives” include currency exchange / trading (FOREX), currency linked structured investment/deposit/note, currency linked swaps, options, forward or futures contracts]
A Resident is ALLOWED to make or receive payment in Foreign Currency, to or from a Non-Resident for other types of derivatives provided: -
There is a firm commitment and the transaction amount is not exceeding the underlying exposure;
Where there is no firm commitment, the derivatives contract is deemed as investment and subject to the prudential investment limit set out in Notice 3 (see above).
You are advised to read and understand the FEN – Notice 3 and Notice 4 and ensure all activities performed using your credit card for accounts maintained with CIMB Bank Berhad / CIMB Islamic Bank Berhad comply with the FEN – Notices 3 and Notice 4 at all times.