Holding Restrictions – Investment Funds – Malaysia
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 customers may be recognised in practice depending on the trust deed governing the unit trust fund.
Customers are advised to consult with appropriate counsel before holding fund units/shares through CBL in Malaysia. By holding such securities, CBL customers are deemed to be aware of any law, regulation, rules and policies applicable thereto.
Restrictions on customers
Malaysia domiciled customers are not allowed to hold Malaysian domiciled funds through CBL. However, there are no general restrictions on Malaysian domiciled ultimate beneficial owners. Certain funds may also impose specific restrictions on investor domicile. Customers 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 customers 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, customers 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 customer 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. Customers 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 12 December 2017. 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 customers should seek advice from independent professional counsel.
Customers 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.