Power of Bank to specify standards or issue codes
(1) The Bank may specify standards or issue codes for the purposes of developing, or maintaining orderly conditions or the integrity of, the money market or foreign exchange market.
(2) Without limiting the generality of subsection (1), standards specified or codes issued under that subsection may include standards or codes relating to—
(a) obligations and duties of any market participant or any officer of the market participant; and
(b) the issuance, sale, purchase, repurchase, borrowing or lending, of or other dealings in, currencies or other financial instruments traded in the money market or foreign exchange market including over-the-counter derivatives whose price, value or payment obligations are derived from, referenced to or based on interest rates or exchange rates.
(3) Standards or codes may only be specified or issued under paragraph (2)(b) in respect of over-the-counter derivatives derived from, referenced to or based on interest rates for the purposes of maintaining monetary stability.
(4) Any market participant or any officer of the market participant in the money market or foreign exchange market shall at all times comply with any standards specified or codes issued by the Bank under this section.
(5) Without limiting the Bank’s powers to take action under any provision of this Act, the Bank may impose any condition, restriction or prohibition including, suspension from trading and restrictions on dealings in these markets on any market participant or any officer of the market participant for failure to comply with or give effect to such standards specified or codes issued under this section.
Prohibited conduct in money market and foreign exchange market
(1) No person shall—
(a) take part in or carry out a transaction that has or is likely to have the effect of creating a rate which is an offmarket rate which results in an artificial rate for dealing in financial instruments in the money market or foreign exchange market;
(b) create, or cause to be created, or do anything that is calculated to create, a false or misleading appearance of active dealing in financial instruments in the money market or foreign exchange market;
(c) make a statement, or disseminate information that is false or misleading in a material particular and is likely to induce another person to deal in financial instruments or is likely to have the effect of raising, lowering, maintaining or stabilising the market rate of such financial instruments in the money market or foreign exchange market and when the person makes the statement, or disseminates the information—
(i) the person does not exercise due care whether the statement or information is true or false; or
(ii) the person knows, or ought reasonably to have known, the statement or information is false or is materially misleading;
(d) take part in or carry out a transaction based on information that is not generally available to persons who regularly deals in the money market or foreign exchange market that would, or would tend to, have a material effect on the price or value of financial instruments; or
(e) engage in any other conduct relating to money market or foreign exchange market as may be prescribed by the Minister, on the recommendation of the Bank.
(2) Without limiting the generality of section 266, the Bank may issue guidance in writing on—
(a) descriptions of conduct which amount to; or
(b) factors that are to be taken into account in determining whether a person has engaged in,
any conduct set out in subsection (1).
(3) Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.
Arrangement with relevant supervisory authority
(1) The Bank shall enter into arrangements with relevant supervisory authorities to coordinate on the regulation of financial instruments traded in the money market which are within the purview and oversight of the relevant supervisory authorities.
(2) For the purposes of this section, “relevant supervisory authorities” means any authority, body or agency in Malaysia other than the Bank which is responsible for the supervision or oversight of the capital market, or capital market intermediaries or capital market participants.
