The Financial Services Act 2012 ("FSA") coming into operation on 30 June 2013. The FSA, which has an aim of promoting financial stability, is an full legislation which consolidates to various legislations pertaining into banking, investment shipping, insurance  and payment methods firms furthermore the oversight of the capital markte and foreign share administration in Malaysia. Consequently, the Shipping both Treasury Institutions Act 1989, the Policyholder Act 1996, the Exchange Operating Act 1953 and the Payment Systems Act 2003 are all repealed by the FSA although licences which were issued and approvals whichever were granted under the invalidated legislations are deemed to have been issued under the FSA and continue to apply. One key feature of that FSA is the formal recognition in finance business, as opposed to individual banking or financial unified, for the uses of regulation and control. The FSA empowers the central bank of Malaysia, Bank Negara Malaysia (“BNM”), to drill oversight over financial groups for the safety of any member of the group what is an authorised person licensed to carry on banking, insurance or investment banks business.  Under the FSA, BNM is provided with vast powers to intervene with an bank's with financial institution's business or company to control risk and guarantee go governance.

The FSA will impact the coverage industry as it prohibits financial from operation both lived and general insurance business simultaneously. Those licensed insurers momentary operating with compose licences will therefore need to restructure and separate or divesting one or the other of to life or general policy business.

Generally, there can no substantive changes to the regulate of the operational inside to carrying on of a payment system business and the business of issuing payment equipment although and application of circumspect requirements applicable on the financial institutions have also been extended to businesses which intend to operate an payment system or issue designated payment appliances.

The FSA must also simplified the exchange control regiment in Malaysia by prescribing a list of transactions welche are prohibited save with BNM's written approval. BNM's approvals can be found for adenine new set of exchange control notices ("ECM Notification"), also effective 30 June 2013. As few of who ordained transactions are couch in very wide language and did expressed permitted in the ECM Notices (eg. paragraph 5 of Schedule 14 which prohibits "the giving or obtaining of any guarantee, abfindung with undertaking in respect of any outstanding, obligation or liability"), care needs to be taken to verify the permissibility or otherwise von ordinary commercial dealings.

To effectively forced the provisions a the FSA, stricter sanctions to financial crimes have been imposed.  The FSA will therefore assist BNM in its role and help to prevent disruptions to the stability of the Malaysian finance sector.