Chapter 1 — Operation and Designation of Payment Instruments
Prohibition of issuance of payment instruments
(1) The Bank may, by order published in the Gazette, prohibit any person from issuing or using any payment instrument if—
(a) the issuing or use of the payment instrument is detrimental to the reliable, safe, efficient and smooth operation of the payment systems of Malaysia; or
(b) the prohibition is in the interest of the public.
(2) The Bank may, in considering whether to prohibit any person from issuing or using any payment instrument under subsection
(1), inspect the premises, equipment, machinery, apparatus, books or other documents, or accounts and transactions of the issuer of the payment instrument, upon giving written notice to the issuer.
(3) The Bank shall give the person referred to in subsection (1) a reasonable opportunity to make representation before making a decision to impose the prohibition under that subsection. Designation of payment instruments
(1) Where the Bank is of the opinion that—
(a) a payment instrument may be of widespread use as a means of making payment and may affect the payment systems of Malaysia; and
(b) it is necessary to protect the interest of the public or it is necessary to maintain the integrity, efficiency and reliability of a payment instrument, the Bank may prescribe such payment instrument as a designated payment instrument.
(2) Where a payment instrument is prescribed as a designated payment instrument, the issuer of that designated payment instrument shall comply with the requirements of subsection 25(1) within such period as the Bank may specify. Issuing of designated payment instruments
(1) No person shall issue a designated payment instrument unless he has—
(a) submitted to the Bank the documents and information as may be prescribed by the Bank;
(b) paid the fee prescribed by the Bank; and
(c) obtained a written approval from the Bank to issue a designated payment instrument.
(2) The Bank may in giving its approval-
(a) require all or any of the documents submitted to be modified and altered as it may deem necessary; and
(b) impose such restriction, limitations or conditions as it may deem fit. Revocation of approval
(1) The Bank may revoke an approval granted under paragraph 25(1) (c) if it appears to the Bank that—
(a) the issuer has contravened or is contravening any of the provisions of this Act;
(b) the issuer has contravened any restrictions, limitations or conditions of the approval;
(c) the issuer has failed to comply with any guidelines, circulars, standards or notices issued by the Bank under section 70;
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(d) the issuer has made a false or an incorrect statement in the documents or information submitted under paragraph 25(1) (a) or particulars of any change to documents and information submitted under subsection 29(1);
(e) the issuer has ceased issuing the designated payment instruments for any continuous period of six months; or
(f) the issuer goes into liquidation or is wound up or is otherwise dissolved.
(2) The Bank shall give the issuer a reasonable opportunity to make representations before making a decision to revoke the approval.
Chapter 2 — Requirements for Issuance of Designated Payment
Instruments Governance arrangements
The issuer of a designated payment instrument shall establish adequate governance arrangements which are effective, accountable and transparent to ensure the continued integrity of such designated payment instrument. Operational arrangements
An issuer of a designated payment instrument shall establish the following operational arrangements:
(a) rules and procedures setting out the rights and liabilities of the issuer and the user of the designated payment instrument and the risks the user may incur;
(b) measures to ensure prudent management of funds collected from a user of the designated payment instrument, including measures to ensure that such funds are available for repayment to a user; and
(c) measures to ensure safety, security and operational reliability of the designated payment instrument including contingency arrangements.
Changes to designated payment instruments
(1) Where the Bank has prescribed documents and information under subsection (2), an issuer of a designated payment instrument shall submit to the Bank particulars of any proposed change to the documents or information within thirty days prior to the making of such change.
(2) The Bank, in prescribing the documents and information to be submitted under subsection 25(1), may also prescribe the documents and information to which subsection (1) shall apply.
(3) Where it appears to the Bank that such change is inappropriate, the Bank may, before the expiry of the thirty days referred to in subsection (1)-
(a) prohibit the issuer from making such change; or
(b) require the issuer to make any other changes as the Bank may specify.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
