30 August 2021

Dear Valued Cardholders,

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:

1. The said derivatives offered by the Resident issuer is first approved by BNM;
2. 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: -

1. There is a firm commitment and the transaction amount is not exceeding the underlying exposure;
2. 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.

For full and latest Foreign Exchange Notices, please refer to Bank Negara Malaysia’s website at https://www.bnm.gov.my/fep

Responsibility of the Customer to Comply with FE Notices

• Please declare (i) your Domestic Ringgit borrowing status and (ii) investment status, before you invest in foreign currency.
• Obtain BNM’s approval if your transaction does NOT meet the permitted sources and uses of funds and the allowable limits listed above.
• You may submit your application online via BNM’s Foreign Exchange Policy website at https://www.bnm.gov.my/submission-of-application-and-report

Definition:

Borrowing;

Any utilised or unutilised credit facility or financing facility, redeemable preference share, Islamic redeemable preference share, Corporate Bond or Sukuk, excluding;

• a credit facility or financing facility obtained by a Resident Individual from a Resident to purchase one (1) residential property and one (1) vehicle; or
• a credit card and charge card facility obtained by a Resident Individual from a Resident and used for payment for retail goods or services only.

Domestic Ringgit Borrowing;

(a) any Borrowing in Ringgit obtained by a Resident from another Resident; or

(b) any obligation considered or deemed as Domestic Ringgit Borrowing under any of the FE Notices.

Investment in Foreign Currency Asset (FCY Asset);

Includes FCY Asset Onshore and Offshore. For full definition, please refer to the link given above.

Some common types of FCY Asset investment stated below for reference.

(a) deposit in FCY account outside Malaysia (other than for education, employment or migration outside Malaysia);

(b) deposit in Investment FCY onshore with CIMB Malaysia;

(c) investing in foreign currency denominated securities onshore with CIMB Malaysia;

Thank you.

The Management

CIMB Bank Berhad [197201001799 (13491-P)]

CIMB Islamic Bank Berhad [200401032872 (671380-H)]