CHANGES IN ECM* NOTICES EXISTING NEW Dealings in gold and foreign currency. No restriction on foreign exchange contracts between authorised dealers and non-residents. No change, except for Extemal account holders. External Accounts Transfer between External Account holders freely No restrictions on credits and debits to an External Account. Transfers between External Accounts would require prior approval for any amount. Transfers to resident accounts in Malaysia banks are permitted until 30 September 1998. Thereafter, such transfers require approval. Sources of funding the External Account are limited to: Proceeds from sale of ringgit instruments, securities registered in Malaysia or other assets in Malaysia. Salaries, wages, commissions, interest or dividend. Sale of foreign currency. Use of funds in the account is limited to: Purchase of ringgit assets in Malaysia. General Payments Generally residents were freely allowed to make payments to non-residnets for any purpose, provided, for an amount of RM10,000 and above: a Form P is completed; and the resident does not have any domestic borrowing (if the payment is for investments abroad in any form); or the payment is made in foreign currency if in relation or consequential to a guarantee (for non-trade purposes). Generally residents are freely allowed to make payments to non-residents for any purpose up to RM10,000 in ringgit or its equivalent in foreign currency (reduction in amount), except for all payment for imports of goods and services Residents are freely allowed to make payments to non-residents in foreign currency only for amounts exceeding RM10,000 equivalent. However, investments abroad in any form and paments under a guarantee for non-trade purposes require approval Form P is completed for amounts exceeding RM10,000 equivalent. Exports of Goods Prescribed manner of payment for exports is in foreign currency or ringgit from an External Account Prescribed manner of payment for exports is in foreign currency only, other than currencies of Israel, Serbia and Montenegro. Credit facilities to Non-residents Non-resident correspondent banks and non-resident stockbroking companies were permitted to obtain credit facilities in aggregate up to RM5 million from banking institutions to fund mismatch of receipts and payments through their External Accounts. Domestic credit facilities to non-resident correspondent banks and non-resident stockbroking companies are no longer allowed. Investments Abroad Residents with no domestic borrowing were allowed to make payment to non-residents for purposes of investing abroad Corporate residents with domestic borrowing were allowed to invest abroad up to the equivalent of RM10 million per calendar on a corporate group basis Residents with no domestic borrowing are allowed to make payment to non-resident for purposes of investing abroad, up to an amount of RM10,000 or its equivalent in foreign currency All residents require prior approval to make payments to non-residents for purpose of investing abroad, for an amount exceeding RM 10,000 equivalent in foreign currency Foreign Currency Credit Facilities and Ringgit Credit Facilities from Non-residents Residents were allowed to obtain ringgit credit facilities of below R10,000 in the aggregate from any non-resident individuals. Residents are not allowed to obtain ringgit credit facilities from any non-resident individuals. Securities There was no restriction on the secondary trading of securities registered in Malaysia, between residents, and between non-residents, and between non-residents. For transfer of securities registered outside Malaysia from non-resident to a resident, the resident was subject to the rules on investments abroad. Ringgit securities are required to be deposited with authorised depositaries. Ringgit securities held by non-residents must be transacted through an authorised depositary for good delivery. All payments by non-residents for any security registered in Malaysia must be made in foreign currency or in ringgit from an External Account. All proceeds in ringgit received by a non-resident from the sale of any resident security must be retained in an External Account (subject to the conditions on such accounts). However, should the ringgit security be held for more than one year, proceeds from the sale of such securities can be: Immediately converted to foreign currency; or Credited to the External Account. All payments to residents for any security registered outside Malaysia from non-residents, must be made in foreign currency. Import and Export of Currency Notes, Bills of Exchange, Assurance Policies, etc A traveller (resident and non-resident) was freely allowed to import or export any amount of ringgit notes or foreign currency notes, which are on his person or in his baggage. Export of foreign currencies requires approval Authorised dealers were allowed to import any amount of ringgit notes; subject to reporting on a monthly basis to Bank Negara Malaysia. A resident traveller is permitted to import: ringgit notes up to RM1,000 only; and any amount of foreign currency. A resident traveller is permitted to export: ringgit notes up to RM1,000 only; and any amount of foreign currencies up to the equivalent of RM10,000. A non-resident traveller is permitted to import: Ringgit notes up to RM1,000 only; and any amount of foreign currencies. A non-resident travellers is permitted to export: Ringgit notes up RM1,000 only; and foreign currencies up to the amount of foreign currencies brought into Malaysia. Prior approval is required for the import and export of ringgit notes and the export of foreign currencies brought into Malaysia Transitional provision Up to 30 September 1998, permission is given to a traveller (resident and non-resident) to import any amount of ringgit on his person or in his baggage. Labuan International Offshore Financial Centre Licensed Offshore Banks were allowed to trade in ringgit investments up to permitted limits. Licensed Offshore Banks are no longer allowed to trade in ringgit instrument. Source: Bank Negara Malaysia *ECM: Exchange Control Mechanism [top] [back]

|| Back to Contents Page ||