Holding Restrictions – Investment Funds – Malaysia

03.11.2023

Market restriction

There is no statutory nominee concept under the laws of Malaysia for investment funds. CBL will be recognised as the legal account holder of the fund units. Some beneficial interest of CBL’s clients may be recognised in practice depending on the trust deed governing the unit trust fund. 

Clients are advised to consult with appropriate counsel before holding fund units/shares through CBL in Malaysia. By holding such securities, CBL clients are deemed to be aware of any law, regulation, rules and policies applicable thereto.

Restrictions on clients

Certain funds may also impose specific restrictions on investor domicile. Clients must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions.

In view of Bank Negara Malaysia regulations, CBL cannot hold cash balances for Malaysian resident ultimate beneficial owners. Therefore, CBL clients will have to ensure that ultimate beneficial owners residing in Malaysia transfer out their own local cash accounts within three days of the credit date.

Restrictions on cash instructions

There are additional requirements and restrictions imposed on the MYR cash instructions. 
When instructing a redemption transaction, where there is no change in beneficial ownership, clients must specify in the narrative field of their instructions using the following format:

<NCBO><Redemption><Amount><Fund name>

Please refer to Cash services – Malaysia for more information. It is the responsibility of the client to ensure compliance with the requirements and restrictions.

Restrictions on settlement

There is no general restriction on settlement on Malaysian investment funds through CBL. However, certain funds may impose specific settlement/transfer restrictions. Clients must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions. 

Disclaimer

The information contained in the Holding Restrictions is based on the legal opinion obtained by CBL that was issued on 2 October 2023. CBL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CBL and the local laws and regulations, the latter shall prevail. The Holding Restrictions do not constitute legal advice and clients should seek advice from independent professional counsel.

Clients are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless CBL, for any loss, expense, liability, damage or claims, whether direct or indirect, against or incurred by CBL arising out of or resulting from such non-compliance.