1. For the purpose of this ECM Notice -
1.1 "dealings in gold" means buying or selling, whether spot or forward, borrowing or lending, importing, exporting, holding, manufacturing, smelting and refining of gold.
1.2 "licensed money changer" means a person licensed by the Controller under subsection 4(1) of the Act.
2. The Controller has removed through the Exchange Control (Gold Exemption) Order 1986 all restrictions on dealings in gold by any person in Malaysia with any other person, other than in Restricted Currencies or with Specified Persons.
3. There are no restrictions on an authorised dealer to deal in foreign currency with a non-resident.
4. The Controller hereby gives permission to -
4.1 An authorised dealer to buy or sell spot foreign currency with a non-bank resident against Ringgit or foreign currency held in a permitted foreign currency account, provided the requirements stipulated in ECM4 are complied with when the sale or purchase exceeds RM50,000.
4.2 A licensed money changer to buy or sell foreign currency against Ringgit with a non-resident or a non-bank resident, provided -
4.2.1 The transaction is carried out on a cash-on-delivery basis;
4.2.2 The transaction is carried out at a place in Malaysia; and
4.2.3 A receipt is issued for each transaction.
5. The Controller hereby gives permission to an authorised dealer to buy forward foreign currency from a non-bank resident against Ringgit or foreign currency held in a permitted foreign currency account, provided -
5.1 The authorised dealer is satisfied that the non-bank resident is due to receive foreign currency -
5.1.1 From a non-resident for the export of goods or services or merchanting trade; or
5.1.2 For any commodity futures contract denominated in foreign currency traded on the Kuala Lumpur Commodity Exchange(hereinafter referred to as "KLCE").
5.2 The forward purchase is -
5.2.1 For a sum not exceeding the expected receipt from the non-resident or the amount actually traded on the KLCE; and
5.2.2 In the foreign currency to be received.
5.3 The maturity date of the forward purchase is the expected date of receipt of the foreign currency, provided -
5.3.1 For export proceeds and/or related freight/insurance charges, there is no restriction on the period of the forward contract but the maturity date of the forward contract must not be later than 6 months after the intended date of export or such longer period as may be permitted by the Controller; and
5.3.2 In all other cases, the maturity date is not later than 12 months after the date the forward purchase contract is entered into, i.e. the entire period of the forward contract does not exceed 12 months.
6. The Controller hereby gives permission to an authorised dealer to sell forward foreign currency to a non-bank resident against Ringgit or foreign currency held in a permitted foreign currency account, provided -
6.1 The authorised dealer is satisfied that the non-bank resident is due to pay in foreign currency -
6.1.1 To a non-resident for the import of goods or services or merchanting trade; or
6.1.2 For any commodity futures contract denominated in foreign currency traded on the KLCE.
6.2 The forward sale is -
6.2.1 For a sum not exceeding the expected payment to the non-resident or the amount traded on the KLCE; and
6.2.2 In the foreign currency to be paid.
6.3 The maturity date of the forward sale is the expected date of payment of foreign currency, provided -
6.3.1 For import payments and/or related freight/insurance charges, there is no restriction on the period of the forward contract but the maturity date of the forward contract must not be later than 12 months after the intended date of import; and
6.3.2 In all other cases, the maturity date is not later than 12 months after the date the forward sale contract is entered into, i.e. the entire period of the forward contract does not exceed 12 months.
7. The prior permission of the Controller is required for -
7.1 An authorised dealer to -
7.1.1 Enter into any forward contract which does not meet the conditions set out in paragraph 5 or 6; or
7.1.2 Extend the maturity date of a forward contract beyond the permissible period in paragraph 5 or 6.
7.2 A non-bank resident to buy or sell, or do any act which involves, is in association with, or is preparatory to, buying or selling any foreign currency, whether spot or forward, with a non-authorised dealer in Malaysia or any person outside Malaysia, otherwise than permitted in paragraph 4.
8. An authorised dealer is required to comply with all the following -
8.1 Cancel the forward contract immediately when the underlying transaction covered by the forward contract does not materialise, unless permitted otherwise by the Controller.
8.2 Reduce the amount of the forward contract when there is a reduction in the amount of payment of the underlying transaction covered by the forward contract.
8.3 Adjust the maturity date of the forward contract when the authorised dealer is satisfied that the due or expected date of payment of the underlying transaction has changed, provided the new maturity date does not exceed the permissible period in paragraph 5 or 6.
8.4 Ensure all forward contracts to cover transactions on the KLCE are backed by the relevant KLCE transaction slips.
8.5 Ensure all its dealings in foreign currency with a non-bank resident comply with the provisions in this ECM Notice.
8.6 Ensure it does not exceed its approved overnight net open position in foreign currency.
8.7 Submit to the Controller -
8.7.1 A weekly report on its overnight net open position within 7 days after the end of the week being reported in the format stipulated by the Controller; and
8.7.2 A monthly report on the volume of purchases and sales of foreign currency during the month within 14 days after the end of the month being reported in the format stipulated by the Controller.