WORLD TRADE GATS/SC/52/Suppl.3
26February 1998
ORGANIZATION(98-0722)
Trade inServices
MALAYSIA
Schedule ofSpecific Commitments
Supplement 3
(This isauthentic inEnglish only)
____________________
Thistextreplaces theFinancial Services section contained indocument GATS/SC/52/Suppl.1.GATS/SC/52/Suppl.3
Page2MALAYSIA
SCHEDULE OFSPECIFIC COMMITMENTS
Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
FINANCIAL SERVICES, INCLUDING INSURANCE
Horizontal Commitments Applicable totheFinancial Services Sector
1. Theoffers inthefinancial services sector areinaccordance withtheGeneral Agreement onTrade inServices andtheAnnex onFinancial Services.
2. Thelimitations listed under theall-sector horizontal section shall notapply tofinancial services, unless otherwise indicated.
3. Inrespect ofoffshore banks, offshore investment banks, commercial banks, merchant banks, offshore insurance andoffshore reinsurance companies, offshore
insurance brokers, offshore insurance underwriting managers, offshore insurance managers, insurance companies, andrepresentative offices ofcommercial
banks andmerchant banks, thefollowing conditions andlimitations onmarket access, national treatment andmovement ofnatural persons shall apply in
addition tospecific limitations totheactivity ofeach financial service asspecified foreach activity inthisSchedule.
ALL FINANCIAL
SERVICES(3) Limitations oninvestments ascontained
intheall-sector horizontal section.
(4) Limitations intheall-sector horizontal
section willapply when indicated ineach
activity.(3) Limitations onlandandother
immovable property ascontained inthe
all-sector horizontal section.
Unbound formeasures affecting
financial services accorded, toany
Bumiputera ortoassist development of
anyBumiputera financial institution to
achieve objectives oftheNational
Development Policy (NDP).
(4) Limitations intheall-sector horizontal
section willapply when indicated in
each activity.GATS/SC/52/Suppl.3
Page3Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
1. Offshore banks,
offshore investment
banks, offshore
direct insurance
companies, offshore
reinsurance
companies, offshore
insurance brokers,
offshore insurance
underwriting
managers and
offshore insurance
managers.(1),(2)Unbound* except asotherwise specified
inthisschedule.
(3) Entry isconfined toLabuan.
Entry islimited toestablishment ofa
branch registered orasubsidiary
incorporated inMalaysia.
(4) Unbound, except fortemporary
presence ofnatural persons inrespect
ofsupply through themode of
commercial presence.(1),(2)Unbound*, except asotherwise
specified inthisschedule.
(3) None
(4) Unbound, except fortemporary
presence ofnatural persons inrespect
ofsupply through themode of
commercial presence.
2. Commercial banks
andmerchant banks.(1),(2)Unbound* except asotherwise specified
inthisschedule.
(3) The13wholly-foreign owned
commercial banks arepermitted to
remain wholly-owned bytheir existing
shareholders.
Unbound fornewlicences.(1),(2)Unbound* except asotherwise
specified inthisschedule.
(3) None except asindicated inthe
finance sector horizontal section and
intherespective activity listed below.
*Due tolackoftechnical feasibility.GATS/SC/52/Suppl.3
Page4Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Allfinancial services -
commercial banks and
merchant banks -cont'd)Entry islimited toequity participation
byforeign banks inMalaysian-owned or
controlled commercial banks and
merchant banks andaggregate foreign
shareholding inacommercial bank ora
merchant bank shall notexceed 30per
cent. Shareholding byasingle person
individually orjointly withrelated
persons islimited toamaximum of
20percent.
Acquisition byaforeign bank ofan
aggregate of5percentormore of
shareholding inaMalaysian-owned or
controlled commercial bank ormerchant
bank must meet thefollowing criteria:
(a) Theforeign bank hastheability to
facilitate trade andcontribute to
financial andeconomic
development ofMalaysia;
(b) Thecountry oftheforeign bank
hassignificant trade and
investment interests inMalaysia;
and
(c) Thecountry oftheforeign bank
does nothave asignificant
representation intheMalaysian
banking industry.GATS/SC/52/Suppl.3
Page5Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Allfinancial services -
commercial banks and
merchant banks -cont'd)Acommercial bank isnotallowed to
acquire anyshare inanother commercial
bank butmayacquire shares inone
merchant bank.
Amerchant bank isnotallowed to
acquire anyshare inacommercial bank
oranother merchant bank.
Other persons arenotpermitted to
acquire 5percentormore of
shareholding inacommercial bank or
merchant bank iftheperson already
holds 5percentormore ofshareholding
inanother licensed financial institution.
Introduction ofnewservice products
willbepermitted subject toapproval
which willbebased onprudential
criteria.
Entry isalsopermitted through the
setting upofrepresentative offices.
Representative offices canonly
undertake research, exchange of
information andliaison services.GATS/SC/52/Suppl.3
Page6Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Allfinancial services -
commercial banks and
merchant banks -cont'd)(4) Unbound except thefollowing:
(a) Unless otherwise specified,
temporary presence ofnatural
persons isoffered onlyinrespect
ofsupply through themode of
commercial presence.
(b) Forbanks, twosenior managers
foreach institution withan
aggregate foreign shareholding
exceeding 50percent. Asenior
manager isanindividual
possessing proprietary knowledge
andauthority essential tothe
establishment, control and
operation oftheservices ofthe
financial service supplier.(4) Unbound except forthecategories of
natural persons referred tounder
market access.
(c) Five specialists orexperts foreach
institution forareas relating to:
(i)trade financing;
(ii)corporate finance;
(iii)treasury management; and
(iv)information technology.GATS/SC/52/Suppl.3
Page7Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Allfinancial services -
commercial banks and
merchant banks -cont'd)(d) Forarepresentative office, two
foreign nationals. Only one
foreign national forthetwotop
posts.
(e) Entry shall belimited toa
maximum period offiveyears.
3.Direct insurance
companies.(1),(2)Unbound* except asotherwise specified
inthisschedule.
(3) Branches offoreign insurance companies
arerequired tobelocally incorporated
by30June 1998 andforeign
shareholding notexceeding 51% is
permitted.(1),(2)Unbound* except asotherwise
specified inthisschedule.
(3) None except asindicated inthe
finance sector horizontal section and
intherespective activity listed below.
Foreign shareholding notexceeding 51%
isalsopermitted fortheexisting foreign
shareholders oflocally incorporated
insurance companies which were the
original owners ofthese companies.
Provided aggregate foreign shareholding
insuch companies does notexceed
51%.
New entry islimited toequity
participation byforeign insurance
companies inlocally incorporated
insurance companies andaggregate
foreign shareholding insuch company
shall notexceed 30%.
*Due tolackoftechnical feasibility.GATS/SC/52/Suppl.3
Page8Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Allfinancial services -
Direct insurance companies
-cont'd)Unbound fornewlicences.
Acquisition byaforeign insurance
company ofanaggregate ofmore than
5percentshareholding inalocally
incorporated insurance company must
meet atleast oneofthefollowing
criteria:
(a) Theforeign insurance company
hastheability tofacilitate trade
andcontribute tofinancial and
economic development of
Malaysia;
(b) Thecountry oftheforeign
insurance company hassignificant
trade andinvestment interests in
Malaysia;
(c) Thecountry oftheforeign
insurance company does nothave
asignificant representation inthe
Malaysian insurance industry; or
(d) Theforeign insurance company
hastheability toprovide technical
expertise andknow-how to
contribute tothefinancial and
economic development of
Malaysia.GATS/SC/52/Suppl.3
Page9Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Allfinancial services -
Direct insurance companies
-cont'd)Aninsurance company isnotallowed to
acquire more than5%share:
(a) Inanother insurance company in
Malaysia thatcarries onthesame
class ofinsurance business asthat
carried onbyit;or
(b) Inaninsurance broking company.
Other persons holding more than5per
centshareholding inaninsurance
company arenotpermitted toacquire
more than5percentshareholding in:
(a) Another insurance company
carrying onthesame class of
insurance business asthatcarried
onbytheinsurance company in
which theperson isashareholder;
or
(b) Aninsurance broking company.GATS/SC/52/Suppl.3
Page10Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Allfinancial services -
Direct insurance companies
-cont'd)(4) Unbound except thefollowing:
(a) Unless otherwise specified,
temporary presence ofnatural
persons isoffered onlyinrespect
ofsupply through themode of
commercial presence.
(b) Onesenior manager forbranches
offoreign insurance companies
andlocally incorporated insurance
companies withanaggregate
foreign shareholding of50% or
more.(4) Unbound except forthecategories of
natural persons referred tounder
market access.
Asenior manager isanindividual
possessing proprietary knowledge
andauthority essential tothe
establishment, control and
operation oftheservices ofthe
financial service supplier.
(c) Three specialists orexperts foreach
institution forareas relating to:
(i) underwriting ofspecialized classes
ofgeneral business;
(ii) information technology; and
(iii) actuarial functions.
(d) Entry shall belimited toamaximum
period offiveyears.GATS/SC/52/Suppl.3
Page11Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Sector Specific Offers intheFinancial Services Sector
A. BANKING AND
OTHER FINANCIAL
SERVICES,
EXCLUDING
INSURANCE
Acceptance of
deposits, andother
repayable funds from
thepublic, wholesale
andretail.(1) Soliciting, advertising andacceptance of
deposits inMalaysia arenotallowed.
(2) Soliciting andadvertising inMalaysia for
acceptance ofdeposits arenotallowed.(1) None
(2) None
(3) Only permitted through acommercial
bank, amerchant bank oranoffshore
bank.
Offshore banks inLabuan arepermitted
toaccept foreign currency deposits only.
Offshore investment banks inLabuan are
notpermitted toaccept deposits.
Merchant banks areonlypermitted to
accept term deposits from non-
individuals. Theminimum amount of
each term deposit shall beasspecified by
theCentral Bank from time totime.
Foreign-owned commercial banks are
permitted toaccept foreign currency
deposits from residents subject to
conditions imposed ondesignated banks.(3) Forcommercial banks, unbound for
branching (including off-premises
ATMs) andnetworking withATMs in
Malaysia.
Branching ispermitted formerchant
banks withanaggregate foreign
shareholding notexceeding 30percent.
(4) Unbound except asindicated inthe
finance sector horizontal section.(4) Unbound except asindicated inthe
finance sector horizontal section.GATS/SC/52/Suppl.3
Page12Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Lending ofalltypes,
including consumer credit,
mortgage credit, factoring
andfinancing ofcommercial
transactions.(1),(2)Financial services associated with
lending toresidents inanycurrency in
excess ofanequivalent ofRM25 million
must beundertaken jointly with
commercial banks ormerchant banks in
Malaysia.(1),(2) None
(3) Entry asanon-bank forscheduled
businesses islimited to:
(a)Foreign financial institutions through
theestablishment ofalocally
incorporated joint-venture company
andaggregate foreign shareholding
insuch company shall notexceed
30percent; or
(b)Arepresentative office.(3) Foreign-controlled banking institutions
inMalaysia areallowed toextend
credit facilities (including factoring and
leasing) uptoamaximum of40per
centofthetotal credit facilities
obtained bynon-resident controlled
companies from banking institutions.
Theabove limitation willberelaxed to
50percentintheyear2000.
Provision offactoring services bya
commercial bank requires thesetting up
ofaseparate entity andshareholding by
aforeign-controlled commercial bank
shall notexceed 30percent.
Merchant banks arenotpermitted to
provide consumer credit andhome
mortgages.Forcommercial banks, unbound for
branching (including off-premises
ATMs) andnetworking withATMs in
Malaysia.
Branching ispermitted formerchant
banks withanaggregate foreign
shareholding notexceeding
30percent.
Only commercial banks arepermitted to
provide overdraft facilities.
Offshore banks andoffshore investment
banks arepermitted tolendinforeign
currencies only.
Representative offices canonlyundertake
research andliaison services.GATS/SC/52/Suppl.3
Page13Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Lending ofalltypes -
cont'd)(4) Forbanks, unbound except asindicated
inthefinance sector horizontal section.
Fornon-banks, unbound except one
foreign national foramanagement post
which isnottheCEO post, foreach
establishment.
Forrepresentative offices ofscheduled
businesses, twoforeign nationals subject
toonlyoneforeign national forthetwo
topposts.
Entry shall belimited toamaximum
period offiveyears.(4) Forbanks, unbound except asindicated
inthefinance sector horizontal section.
Fornon-banks, unbound except forthe
categories ofnatural persons referred
tounder market access.
Residency requirements arerequired
forlending ofmoney.
Financial leasing. (1),(2)Leasing services toresidents inany
currency must beundertaken jointly with
leasing companies ormerchant banks in
Malaysia.
(3) Entry asanon-bank islimited to:
(a) Foreign financial institutions through
theestablishment ofalocally
incorporated joint-venture company
andaggregate foreign shareholding in
such company shall notexceed 30per
cent; or
(b) Arepresentative office.
Provision ofleasing services bya
commercial bank requires thesetting upof
aseparate entity andshareholding bya
foreign-controlled commercial bank shall
notexceed 30percent.(1),(2) None
(3) NoneGATS/SC/52/Suppl.3
Page14Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Financial leasing -cont'd) Aggregate foreign shareholding willbe
permitted tobeincreased to49percent
witheffect from 1July2000.
Representative offices canonlyundertake
research andliaison services.
Entry ispermitted through theestablishment
ofabranch orsubsidiary inLabuan by
reputable foreign leasing companies. Such
offshore entity canonlytransact inforeign
currencies.
Offshore banks andoffshore investment
banks arepermitted tocarry onfinancial
leasing business inforeign currencies only.
(4) Unbound except twoforeign nationals, one
formanagement postwhich isnottheCEO
postandonetechnical post, foreach
establishment.
Forrepresentative offices, twoforeign
nationals subject tooneforeign national for
thetwotopposts.
Entry shall belimited toamaximum period
offiveyears.(4)Unbound except forthecategories of
natural persons referred tounder market
access.
Foroffshore leasing companies, unbound
except fortemporary presence ofnatural
persons inrespect ofsupply through the
mode ofcommercial presence.
Foroffshore leasing companies, unbound
except fortemporary presence ofnatural
persons inrespect ofsupply through the
mode ofcommercial presence.GATS/SC/52/Suppl.3
Page15Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Allpayment andmoney
transmission services,
namely credit anddebit
cards, travellers cheques
andbankers drafts.(1),(2)Electronic fund transfer system
requires approval.
(3) Offshore banks arepermitted toextend
payment andmoney transmission services
tonon-residents only.
Only commercial banks arepermitted to
issue credit cards, debit cards orprovide
checking account services.
Only Malaysian-controlled banks are
permitted toissue, sellorpurchase ringgit
travellers cheques.(1),(2)None
(3)Forcommercial banks, unbound for
branching (including off-premises ATMs)
andnetworking withATMs inMalaysia.
Branching ispermitted formerchant
banks withanaggregate foreign
shareholding notexceeding 30percent.
Saleorpurchase oftravellers cheques by
individuals require citizenship status.
Saleorpurchase offoreign currency
travellers cheques other thanbycommercial
banks requires amoney changer 'slicence.
Entry islimited toestablishment ofalocally
incorporated joint-venture company and
aggregate foreign shareholding insuch
company shall notexceed 30percent.
(4) Forbanks, unbound except asindicated in
thefinance sector horizontal section.
Fornon-banks, unbound except oneforeign
national foramanagement postwhich isnot
theCEO post, foreach establishment.
Entry shall belimited toamaximum period
offiveyears.Branching (including dispensers) is
permitted fortravellers cheques
companies withforeign shareholding not
exceeding 30percent.
(4)Forbanks, unbound except asindicated in
thefinance sector horizontal section.
Fornon-banks, unbound except forthe
categories ofnatural persons referred to
under market access.GATS/SC/52/Suppl.3
Page16Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Charge cards. (1),(2)None
(3) Entry islimited toestablishment ofa
company incorporated inMalaysia.
Approval oftheCentral Bank isrequired.
Approval willbegranted based on
prudential criteria.
(4) Unbound except twosenior managers for
each establishment.
Entry shall belimited toamaximum period
offiveyears.(1),(2)None
(3)None
(4)Unbound except forthecategories of
natural persons referred tounder market
access.
Guarantees and
commitments.(1),(2)None except banks established in
Malaysia maybegiven theright offirst
refusal.
Guarantees andcommitments undertaken by
non-residents aregoverned byrules relating
toexchange control.
(3) None
(4) Unbound except asindicated inthefinance
sector andall-sector horizontal section.(1),(2)None
(3)None
(4)Unbound except asindicated inthe
finance sector andall-sector horizontal
section.GATS/SC/52/Suppl.3
Page17Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Money andforeign
exchange broking services.(1),(2)Broking services, involving Ringgit
Malaysia andfinancial instruments issued in
Malaysia must beeffected through
authorized dealers andmoney andforeign
exchange brokers incorporated inMalaysia.
(3) Entry islimited to:
(a) equity participation inexisting
institutions andaggregate foreign
shareholding insuch institutions
shall notexceed 30percent; or
(b) theestablishment ofabranch or
subsidiary, byamoney and
foreign exchange broker,
registered orincorporated in
Labuan.
Money andforeign exchange broking
services byoffshore entities areconfined to
foreign currencies only.(1),(2)None
(3)None
(4) Unbound
Foroffshore money andforeign exchange
brokers, unbound except fortemporary
presence ofnatural persons inrespect of
supply through themode ofcommercial
presence.(4)Unbound
Foroffshore money andforeign exchange
brokers, unbound except fortemporary
presence ofnatural persons inrespect of
supply through themode ofcommercial
presence.GATS/SC/52/Suppl.3
Page18Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Trading forownaccount or
account ofcustomers inthe
following:
- money market
instruments
- foreign exchange
- transferable securities
- exchange rateand
interest rate
instruments
- derivative products,
including futures and
options
- other negotiable
instruments, including
bullion(1) Dealing islimited tocontracts traded on
specified exchanges abroad.
(2) None
(3) Transactions byoffshore banks and
offshore investment banks inLabuan must
beconducted inforeign currencies, except
forthesaleorpurchase ofcurrencies with
authorized banks inMalaysia.
Transactions byoffshore banks and
offshore investment banks inLabuan for
ownaccount arelimited toinstruments
created andissued byoffshore companies
inLabuan andforeign companies abroad.
Trading foraccounts ofcustomers by
offshore banks, offshore investment banks
andoffshore companies inLabuan is
confined tonon-resident customers andin
instruments created andissued byoffshore
companies inLabuan andforeign
companies abroad.(1) None
(2) None
(3) None
Trading inshares ofMalaysian companies
byoffshore banks, offshore investment
banks andoffshore companies inLabuan is
confined tonon-resident customers whoare
notoffshore companies registered or
incorporated inLabuan.
Only commercial banks, offshore banks
andoffshore investment banks are
permitted totrade inforeign currency.GATS/SC/52/Suppl.3
Page19Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Trading forownaccount or
account ofcustomers -
cont'd)Trading anddealing insecurities and
financial futures andderivative products
other thanbydesignated financial
institutions require establishment ofa
locally incorporated joint-venture company
andaggregate foreign shareholding insuch
company shall notexceed 30percent.
Trades forownaccount andaccount of
customers whoareoutside Malaysia may
berouted tomember companies ofthe
stock exchange forexecution byaforeign
stock broking company thatisincorporated
inMalaysia subject toallterms and
conditions which arebeing finalized.
(4) Forbanks, unbound except asindicated in
thefinance sector horizontal section.
Fornon-banks, unbound except asindicated
intheall-sector horizontal section.(4) Forbanks, unbound except asindicated
inthefinance sector horizontal section.
Fornon-banks, unbound except as
indicated intheall-sector horizontal
section.
Services related totheissues
ofallkinds ofsecurities and
placement asagents
(whether publicly or
privately) (excluding issuing
andrating houses).(1),(2)Participation inissues andservices
related tosuch issues requires
authorization.
(3) Participation byoffshore banks and
offshore investment banks inLabuan is
limited tonon-resident customers andfor
issues ofsecurities outside Malaysia.
Only merchant banks arepermitted tomake
submissions totheSecurities Commission
fornewissues.(1),(2)None
(3) NoneGATS/SC/52/Suppl.3
Page20Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Services related tothe
issues ofallkinds of
securities andplacement as
agents -cont'd)Participation bynon-banks requires
establishment ofalocally incorporated
joint-venture company andaggregate
foreign shareholding insuch company shall
notexceed 30percent.
Unbound forappointment asprincipal
dealers.
(4) Forbanks, unbound except asindicated in
thefinance sector horizontal section.
Fornon-banks, unbound except asindicated
intheall-sector horizontal section.(4) Forbanks, unbound except asindicated
inthefinance sector horizontal section.
Fornon-banks, unbound except as
indicated intheall-sector horizontal
section.
Underwriting. (1) Commercial presence isrequired.
(2) Authorization isrequired.
(3) Fornon-banks, onlylicensed dealers are
permitted tounderwrite. Entry islimited
toestablishment ofalocally incorporated
joint-venture company andaggregate
foreign shareholding insuch company shall
notexceed 30percent.(1) Unbound
(2) None
(3) None
Commercial banks arepermitted to
underwrite private debtsecurities only.
Offshore banks andoffshore investment
banks arepermitted tounderwrite foreign
currency denominated securities created
andissued byoffshore companies in
Labuan andforeign companies abroad.GATS/SC/52/Suppl.3
Page21Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Underwriting -cont'd) (4) Forcommercial banks, merchant banks,
offshore banks andoffshore investment
banks, unbound except asindicated inthe
finance sector horizontal section.
Fornon-banks, unbound except asindicated
intheall-sector horizontal section.(4) Forcommercial banks, merchant banks,
offshore banks andoffshore investment
banks, unbound except asindicated inthe
finance sector horizontal section.
Fornon-banks, unbound except as
indicated intheall-sector horizontal
section.
Asset management as
follows:
- cashorportfolio
management
- allforms ofcollective
investment
management
- custodial and
depository services(1) Commercial presence isrequired.
(2) None
(3) Custodial anddepository services are
limited toscrip based securities.
Asset management byoffshore banks,
offshore investment banks andoffshore
companies isconfined tonon-resident
customers andforeign currency assets.(1) None
(2) None
(3) None
Asset management byoffshore banks,
offshore investment banks andoffshore
companies inMalaysian equities orequity-
linked investments areconfined tonon-
resident customers other thanoffshore
companies incorporated inLabuan inwhich
residents have shareholding.
Entry asanon-bank, other thanasa
Foreign Fund Management Company
(FFMC), islimited toestablishment ofa
locally incorporated joint-venture company
andaggregate foreign shareholding insuch
company shall notexceed 30percent.GATS/SC/52/Suppl.3
Page22Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Asset management -cont'd) Provision ofasset management services by
acommercial bank requires establishment
ofaseparate entity andshareholding bya
foreign-controlled commercial bank shall
notexceed 30%.
Entry asanFFMC islimited tothe
establishment ofacompany incorporated
locally withmore than50% foreign
shareholding inthecompany andrequires
theapproval oftheSecurities Commission.
Sourcing oflocal funds worth atleast
RM10 million islimited toFFMCs where
theaggregate foreign shareholding isnot
more than70% andthecompany is
managing orhasundertaken tomanage
funds sourced from outside Malaysia tothe
amount ofatleast USD100 million.
Sourcing oflocal funds islimited to
institutional funds andcollective investment
schemes other thanunittrusts. Only ten
FFMCs which have amaximum of70%
foreign shareholding maymanage thefunds
ofalocal unittrust subject totheapproval
oftheSecurities Commission.
(4) Forcommercial banks andmerchant banks,
unbound except asindicated inthefinance
sector horizontal section.
Fornon-banks, unbound except asindicated
intheall-sector horizontal section.(4) Forbanks, unbound except asindicated
inthefinance sector horizontal section.
Fornon-banks, unbound except as
indicated intheall-sector horizontal
section.GATS/SC/52/Suppl.3
Page23Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Advisory, intermediation
andother auxiliary financial
services, including credit
reference andanalysis,
investment advice on
acquisitions, corporate
restructuring andstrategy.(1) Provision ofinvestment andportfolio
advice requires commercial presence.
Services other thaninvestment and
portfolio advice toresidents must be
undertaken jointly withcommercial banks
ormerchant banks inMalaysia.
(2) Services other thaninvestment and
portfolio advice toresidents must be
undertaken jointly withcommercial banks
ormerchant banks inMalaysia.(1) None
(2) None
(3) Entry asanon-bank islimited to:
(a)Establishment ofalocally incorporated
joint-venture company andaggregate
foreign shareholding insuch company
shall notexceed 30percent; or
(b)Arepresentative office.
Representative offices (including those of
commercial banks, merchant banks and
securities companies) arepermitted to
undertake research, information andliaison
services only.
Representative offices ofsecurities
companies arenotpermitted topublish and
circulate research work inMalaysia.(3) NoneGATS/SC/52/Suppl.3
Page24Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Advisory, intermediation
andother auxiliary financial
services -cont'd)Offshore banks, offshore investment banks
andoffshore companies inLabuan canonly
provide services tonon-resident customers.
(4) Forbanks, unbound except asindicated in
thefinance sector horizontal section.
Fornon-banks, unbound except asindicated
intheall-sector horizontal section.
Forrepresentative offices, twoforeign
nationals subject toonlyoneforeign
national forthetwotopposts. Entry shall
belimited toamaximum period offive
years.(4) Forbanks, unbound except asindicated
inthefinance sector horizontal section.
Fornon-banks, unbound except as
indicated intheall-sector horizontal
section.GATS/SC/52/Suppl.3
Page25Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Operational headquarters
(OHQ) forfinancial sector
(Provides services to
commercial andinvestment
banking institutions in
activities relating towork
carried outinMalaysia for
itsoffices andrelated
companies outside Malaysia,
pertaining togeneral
management and
administration, business
planning, technical support,
marketing control andsales
promotion planning, training
andpersonnel management,
provision oftreasury and
fund management services
andresearch and
development).(1),(2) Unbound*
(3) Only through alocally incorporated wholly
foreign-owned company.
Aforeign-owned company, aregional
office ofaforeign-owned company which
transfers itsOHQ services toMalaysia, a
regional office ofaforeign-owned company
established inMalaysia, andaforeign-
owned company which isalready
incorporated inMalaysia, mayseekto
qualify asanOHQ.
AnOHQ must operate inMalaysia and
fulfill thefollowing criteria:
(a)Carry outatleast three oftheOHQ
service activities;
(b)Have asizeable network ofcompanies
outside Malaysia which includes the
parent company oritshead office and
related companies;(1),(2) Unbound*
(3) None
*Due tolackoftechnical feasibility.GATS/SC/52/Suppl.3
Page26Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Operational headquarters -
cont'd)(c)Have awellestablished foreign-owned
company which issizeable interms of
assets andemployees;
(d)Have anetwork ofcompanies witha
substantial number ofqualified
executives, professionals, technical
andother supporting personnel;
(e)Beabletomake decisions
independently without consultation
withitshead office orparent company
located outside Malaysia;
(f)Beabletocontribute totheMalaysian
economy by:
(i) Using services such as
legal, accounting etc.
provided byMalaysians;
(ii) Creating jobopportunities
forMalaysians;
(iii) Enabling greater inflow of
foreign funds.
(4) Unbound except asindicated inthe
all-sector horizontal section.(4) NoneGATS/SC/52/Suppl.3
Page27Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Securities broking services
comprising:
- broking services;
- credit reference and
analysis;
- investment portfolio
management and
advice; and
- market research.(1) Trades onMalaysian stock exchanges must
betransacted through companies
incorporated inMalaysia which are
member companies oftheexchange.
Promotion inMalaysia ofMalaysian stocks
requires approval.
Provision ofinvestment advisory services
andcredit reference services toresidents
requires commercial presence.
(2) Trades onMalaysian stock exchanges must
betransacted through companies
incorporated inMalaysia which are
member companies oftheexchange.(1) None
(2) None
(3) Entry islimited torecognized foreign stock
broking companies through:
(a)Equity participation inanexisting
stockbroking company; or(3) NoneGATS/SC/52/Suppl.3
Page28Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Securities broking services
-cont'd)(b)Establishment ofalocally incorporated
joint-venture company witha
Malaysian stockbroking company.
Andaggregate foreign shareholding insuch
company shall notexceed 30percent. The
aggregate foreign shareholding willbe
permitted tobeincreased to49percent
witheffect from 1July2000, subject to
conditions.
Aforeign stockbroking company is
permitted tohave shareholding inone
stockbroking company only.
Entry byrecognized foreign stockbroking
companies isalsopermitted through a
representative office.
Representative offices arepermitted to
undertake research, information andliaison
services only. Representative offices are
notpermitted topublish andcirculate
research work inMalaysia.GATS/SC/52/Suppl.3
Page29Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Securities broking services
-cont'd)New licences subject toconditions,
including geographical location, numerical
quota andother conditions tobe
determined.
(4) Unbound forastockbroking company,
except asindicated intheall-sector
horizontal section.
Forrepresentative offices, twoforeign
nationals subject toonlyoneforeign
national forthetwotopposts. Entry shall
belimited toamaximum period offive
years.(4) Unbound except forthecategories of
natural persons referred tounder market
access.
Commodity futures broking
services.(1),(2)Trades onanyMalaysian
commodity futures exchange must be
conducted through companies incorporated
inMalaysia which aremember companies
oftheexchange.
(3) Entry islimited to:
(a)Establishment ofalocally incorporated
joint-venture company andaggregate
foreign shareholding insuch company
islimited to30percentoranyhigher
percentage asdetermined bythe
relevant authorities; or
(b)Arepresentative office.(1),(2) None
(3) NoneGATS/SC/52/Suppl.3
Page30Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Commodity futures broking
services -cont'd)Representative offices arepermitted to
undertake research, information andliaison
services only.
Total membership oftheexchange willbe
based oneconomic needs.
(4) Unbound except oneforeign national fora
management postperestablishment, subject
tomarket test.(4) Unbound except forthecategories of
natural persons referred tounder market
access.GATS/SC/52/Suppl.3
Page31Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
B. INSURANCE
SERVICES
Direct insurance (non-
life).(1) Soliciting andadvertising inMalaysia are
notallowed.
Direct placement abroad ofinsurance of:
(a)movable orimmovable property
located inMalaysia, including any
shiporaircraft registered inMalaysia;
and
(b)liability ofresidents tothird party
requires approval. Approval willbe
granted ifsuch insurance isnot
available from direct insurance
companies inMalaysia.(1) None
(2) Direct placement abroad ofinsurance of:
(a)movable orimmovable property
located inMalaysia, including any
shiporaircraft registered inMalaysia;
and
(b)liability ofresidents tothird party
requires approval. Approval willbe
granted ifsuch insurance isnot
available from direct insurance
companies inMalaysia.(2) NoneGATS/SC/52/Suppl.3
Page32Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Direct insurance (non-life)
-cont'd).(3) Only permitted through direct insurance
companies.
Offshore direct insurance companies in
Labuan arenotpermitted toaccept direct
insurance ofMalaysian risks.(3) Branching ispermitted fordirect
insurance companies withaggregate
foreign shareholding oflessthan50per
cent. Direct insurance companies are
permitted tomaintain their existing
network ofbranches.
Unbound forspecial assistance to
Malaysian-owned direct insurance
companies topromote their development.
(4) Unbound except asindicated inthefinance
sector horizontal section.(4) Unbound except asindicated inthe
finance sector horizontal section.
Direct insurance (life). (1),(2) Unbound
(3) Only permitted through direct insurance
companies.
Investment-linked insurance business and
newlifeinsurance products provided by
direct insurance companies require
approval, which willbebased onprudential
criteria.
Offshore direct insurance companies in
Labuan arenotpermitted tounderwrite life
insurance ofresidents. Thislimitation does
notapply toordinary lifeinsurance ofhigh
networth residents.(1),(2) Unbound
(3) Branching isonlypermitted fordirect
insurance companies withaggregate
foreign shareholding oflessthan50per
cent. Direct insurance companies are
permitted tomaintain their existing
network ofbranches.
Unbound forspecial assistance to
Malaysian-owned direct insurance
companies topromote their development.
(4) Unbound except asindicated inthefinance
sector horizontal section.(4) Unbound except asindicated inthe
finance sector horizontal section.GATS/SC/52/Suppl.3
Page33Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Reinsurance and
retrocession (non-life).(1),(2) Outward reinsurance ispermitted only
iflocal capacity isnotavailable.
(3) Obligation onallinsurers other than
offshore direct insurance andoffshore
reinsurance companies tooptimise
national retention capacity before any
outward reinsurance.
Seven newlicences fornon-life
reinsurance business within 10years
ending 30June 2005.
Entry isthrough theestablishment ofa
balanced distribution ofbranches and
locally incorporated joint-venture
companies, subject tothefollowing
conditions:(1),(2) Voluntary cession upto30percent
ofeach class ofnon-life reinsurance
business totheMalaysian National
Reinsurance Berhad.
Unbound forfiscal incentives to
promote reinsurance inMalaysia.
(3) Unbound formeasures granting
special position toMalaysian
National Reinsurance Berhad.
(a)Priority willbegiven toforeign
reinsurers from thetop100world
reinsurers which:
(i)Have longpresence inAsia and
ability toprocure sufficient
business fortheir branch/joint-
venture company; or
(ii)Arefrom countries orregions
having norepresentation in
Malaysia, provided theybring in
special expertise.GATS/SC/52/Suppl.3
Page34Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Reinsurance and
retrocession (non-life) -
cont'd)(b) Forentry through branches,
priority willbegiven toforeign
reinsurers which intend tobase
their regional headquarters in
Malaysia.
(c) Forentry through joint-ventures,
priority willbegiven tothose
joint-ventures which have
business plans tooperate
regionally.
(d) Thebranch orjoint-venture
company must undertake to
comply withthenational
objectives ofachieving optimum
retention oflocal risks, local
participation inthemanagement
ofthebranch orjoint-venture
company andtransfer of
technical expertise tothelocal
market.
(e) Aggregate foreign shareholding
inthejoint-venture company
shall notexceed 49percent.GATS/SC/52/Suppl.3
Page35Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Reinsurance and
retrocession (non-life) -
cont'd)(f) Priority willbegiven to
joint-venture withalocal partner
which:
(i)hasaminimum
shareholders 'funds ofat
least RM3 billion;
(ii)isaleading institution with
diversified business
activities within itsgroup;
or
(iii)hasagood track record of
managing asubstantial
insurance portfolio.
Aggregate foreign shareholding inthe
Malaysian National Reinsurance
Berhad shall notexceed 30percent.
Entry asanoffshore reinsurance
company isconfined toLabuan.
(4) Unbound except for:
(a) Two senior managers foreach
institution arepermitted.
Asenior manager isanindividual
possessing proprietary knowledge and
authority essential tothe
establishment, control andoperation of
theservices ofthefinancial service
supplier.(4) Unbound except asindicated inthe
finance sector horizontal section.
Foroffshore reinsurance companies,
unbound except asindicated inthe
finance sector horizontal section.GATS/SC/52/Suppl.3
Page36Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Reinsurance and
retrocession (non-life)
-cont'd)(b) Three specialists orexperts for
each institution arepermitted.
Specialists orexperts areindividuals
whopossess knowledge andexpertise
relating tonewproducts andservices,
technique ormanagement ofthe
financial service supplier.
(c) Entry shall belimited toa
maximum period offiveyears.
Foroffshore reinsurance companies,
unbound except asindicated inthefinance
sector horizontal section.
Reinsurance and
retrocession (life).(1),(2) Outward reinsurance ispermitted only
iflocal capacity isnotavailable.(1),(2) Unbound forfiscal incentives to
promote reinsurance inMalaysia.GATS/SC/52/Suppl.3
Page37Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(3) National retention capacity isrequired tobe
optimised before anyoutward reinsurance
by:
(a)direct lifeinsurance andlife
reinsurance companies inMalaysia;
and
(b)offshore direct lifeinsurance and
offshore lifereinsurance companies
which arepermitted toinsure or
reinsure lifeinsurance ofhighnet
worth residents.
Sixnewlicences forlifereinsurance
business willbeissued upto30June 2005.
Entry isthrough theestablishment ofa
balanced distribution ofbranches and
locally incorporated joint-venture
companies, subject tothefollowing
conditions:(3) NoneGATS/SC/52/Suppl.3
Page38Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Reinsurance and
retrocession (life) -cont'd)(a)Priority willbegiven toforeign
reinsurers from thetop100world
reinsurers which:
(i) have branch offices inMalaysia;
(ii) have longpresence inAsia and
ability toprocure sufficient
business fortheir branch or
joint-venture company; or
(iii) arefrom countries orregions
having norepresentation in
Malaysia, provided theybring in
special expertise.
(b)Forentry through branches, priority
willbegiven toforeign reinsurers
which intend tobasetheir regional
headquarters inMalaysia.
(c)Forentry through joint-ventures,
priority willbegiven tothose joint-
ventures which have business plans to
operate regionally.
(d)Thebranch orjoint-venture company
must undertake tocomply withthe
national objectives ofachieving
optimum retention oflocal risks, local
participation inthemanagement ofthe
branch orjoint-venture company and
transfer oftechnical expertise tothe
local market.
*Due tolackoftechnical feasibility.GATS/SC/52/Suppl.3
Page39Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Reinsurance and
retrocession (life) -cont'd)(e)Aggregate foreign shareholding inthe
joint-venture company shall notexceed
49percent.
(f)Priority willbegiven tojoint-venture
withalocal partner which:
(i) hasaminimum shareholders '
funds ofatleast RM3 billion; or
(ii) isaleading institution with
diversified business activities
within itsgroup.
Aggregate foreign shareholding inthe
Malaysian LifeReinsurance Group Berhad
shall notexceed 30percent.
Entry asanoffshore reinsurance company
isconfined toLabuan.
(4) Unbound except for:
(a)Two senior managers foreach
institution arepermitted.
Asenior manager isanindividual
possessing proprietary knowledge and
authority essential tothe
establishment, control andoperation of
theservices ofthefinancial service
supplier.(4) Unbound except asindicated inthe
finance sector horizontal section.
Foroffshore reinsurance companies,
unbound except asindicated inthe
finance sector horizontal section.GATS/SC/52/Suppl.3
Page40Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Reinsurance and
retrocession (life) -cont'd)(b)Three specialists orexperts foreach
institution arepermitted.
Specialists orexperts areindividuals
whopossess knowledge andexpertise
relating tonewproducts andservices,
technique ormanagement ofthe
financial service supplier.
(c)Movement ofasenior manager,
specialist orexpert canbethrough
intra-corporate transfers orotherwise.
(d)Entry shall belimited toamaximum
period offiveyears.
Foroffshore reinsurance companies,
unbound except asindicated inthefinance
sector horizontal section.
Insurance intermediation -
insurance broking
(excluding agency).(1),(2) Direct insurance broking services can
onlybeprovided tooffshore
companies inLabuan.
Reinsurance broking ispermitted.
(3) Unbound foronshore insurance broking.(1),(2) None
(3) None
Broking ofdirect insurance ofMalaysian
risks byoffshore insurance brokers isnot
permitted. Thislimitation does notapply to
broking ofreinsurance ofMalaysian risks.
(4) Unbound except asindicated inthefinance
sector(4) Unbound except asindicated inthe
finance sector horizontal section.GATS/SC/52/Suppl.3
Page41Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Insurance intermediation
-insurance underwriting and
insurance management.(1),(2) Insurance underwriting andinsurance
management arenotpermitted.
(3) Unbound foronshore insurance
underwriting andinsurance
management.(1),(2) None
(3) None
Anoffshore insurance underwriting
manager isnotpermitted toprovide
services toanyperson other than
offshore insurance companies in
Labuan.
Anoffshore insurance manager is
permitted toprovide insurance
management services topersons other
thanresidents.
(4) Unbound except asindicated inthe
finance sector horizontal section.(4) Unbound except asindicated inthe
finance sector horizontal section.
Services auxiliary to
insurance, asfollows:
(a) Consultancy (excludes
insurance agency
services toinsurance
industry)
(b) Actuarial risk
assessment
(c) Risk management
(d) Maritime loss
adjusting.(1) Actuarial services canonlybe
provided tooffshore insurance
companies andoffshore reinsurance
companies inLabuan.
(2) None
(3) Limited totheestablishment of:
(a) Locally incorporated companies;
(b) Branches; or
(c) Partnerships.(1) None
(2) None
(3) NoneGATS/SC/52/Suppl.3
Page42Modes ofsupply: (1) Cross-border supply (2)Consumption abroad (3)Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(Services auxiliary to
insurance -cont'd)Offshore companies arenotpermitted
toprovide services toMalaysian
residents.
(4) Unbound except fortemporary
presence ofnatural persons inrespect
ofsupply through themode of
commercial presence.(4) Unbound except fortemporary
presence ofnatural persons in
respect ofsupply through themode
ofcommercial presence.