INTEREST SCHEMES ACT 2016

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 778 INTEREST SCHEMES ACT 2016 As at 1 March 2018 2 INTEREST SCHEMES ACT 2016 Date of Royal Assent … … … … 31 August 2016 Date of publication in the Gazette … … 15 September 2016 Latest amendment made by P.U. (A) 14/2018 which came into operation on … … … 31 January 2018 … 3 LAWS OF MALAYSIA Act 778 INTEREST SCHEMES ACT 2016 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and commencement 2. Interpretation PART I REGISTRATION OF SCHEMES 3. Issuance and requirement for registration of schemes 4. Nature of schemes 5. Types of schemes that may be registered 6. Registration of premium scheme 7. Registration of small scheme 8. Registration of foreign scheme 9. Application for registration of a scheme 10. Certificate of authorization 11. Power of Registrar to suspend certificate of authorization 12. Revocation of certificate of authorization 13. Appeal to the Minister on revocation 4 Laws of Malaysia ACT 778 Section 14. Power to refuse registration 15. Provision applicable to foreign schemes on reciprocity arrangement 16. Conversion from small scheme to premium scheme 17. Registration of conversion 18. Effect of conversion PART III TRUST DEED, TRUSTEES AND PROSPECTUS Chapter 1 Trust Deeds and Contractual Agreements 19. Approval of trust deed and contractual agreement 20. Contents of trust deed and contractual agreement 21. Amendment to trust deed and contractual agreement and void provisions Chapter 2 Trustees 22. Appointment of trustees 23. Eligibility for appointment as trustees 24. Duties of trustees 25. Liability of trustees 26. Resignation and removal of trustees Chapter 3 Prospectus and Product Disclosure Statement 27. Prohibition of issuing prospectus or product disclosure statement without approved trust deed or approved contractual agreement 28. Requirement to register and lodge prospectus or product disclosure statement 29. Registration of prospectus or product disclosure statement 30. Refusal to register prospectus or product disclosure statement Interest Schemes 5 Section 31. Keeping of documents relating to prospectus or product disclosure statement 32. Contents of prospectus or product disclosure statement 33. Consent from person to issue prospectus or product disclosure statement containing his statement 34. Relief from requirements in relation to form and content of prospectus or product disclosure statement 35. Certain advertisement deemed to be prospectus or product disclosure statement 36. Document containing offer of interests for sale to be deemed prospectus or product disclosure statement 37. Information memorandum deemed to be prospectus or product disclosure statement 38. Supplemental prospectus or replacement prospectus 39. Civil liability for misstatement in prospectus or product disclosure statement 40. Criminal liability for misstatement in prospectus or product disclosure statement 41. Registrar and persons not to be taken to have authorized or caused issuance of prospectus or product disclosure statement 42. Stop order 43. Issuance of trust deeds, contractual agreements, prospectuses or product disclosure statements in accordance with Shariah principles PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 Management Company 44. Management company to have registered office in Malaysia 45. General duties and obligations of management company 46. Obligations to trustees 47. Duty to buy back interests 48. Separation of funds of interest holders and other persons 6 Laws of Malaysia ACT 778 Section 49. Prohibition to invest and lend money to management company, etc. 50. Registrar may specify duties, obligations and conduct relating to schemes Chapter 2 Accounts and Audit 51. Accounting records and audit 52. Appointment and approval of auditor 53. Powers and duties of auditor 54. Duty of auditor to disclose irregularity or undesirable practice Chapter 3 Meetings of a Scheme 55. Requisition of meeting by interest holders 56. Notice of meetings of interest holders 57. Manner in which notice is given 58. Notification of publication of notice of meeting on website 59. Procedures at meetings and proxies 60. Records of resolutions and meetings, etc. 61. Records as evidence of resolutions, etc. PART V WINDING UP OF SCHEMES 62. Winding up of scheme as required by trust deed or contractual agreement 63. Winding up at direction of interest holders of an investment scheme 64. Winding up in the event of accomplishment or non-accomplishment of the purpose of the scheme 65. Winding up ordered by Court Interest Schemes 7 Section 66. Duties of management company in winding up of a scheme 67. Ancillary orders 68. Unclaimed money to be paid to Registrar 69. Voluntary deregistration PART VI ENFORCEMENT OF THE ACT 70. Injunction 71. Power of Registrar to intervene 72. Power of Registrar to terminate unregistered scheme 73. Power to exempt from compliance with the Act 74. Protection to certain officers who make disclosures 75. General penalty PART VII ADMINISTRATION OF THE ACT 76. Register of interest holders 77. Duty to lodge returns, statements, etc. 78. Documents to be kept at registered office 79. Forms of documents, use of computer and other means for recording documents 80. Inspection of registers and documents at registered office 81. Registers and inspection of documents lodged with Registrar 82. False and misleading statements 83. Evidentiary value of copies certified by Registrar 84. Evidence of statutory requirements 85. Rectification of registers 86. Electronic lodgement of documents 8 Laws of Malaysia ACT 778 Section 87. Issue of document electronically 88. Electronic information, document, etc. certified by Registrar admissible in evidence 89. Power to amend Schedules 90. Regulations 91. Power to declare interests to be regulated under the securities laws 92. Saving and transitional FIRST SCHEDULE SECOND SCHEDULE 9 LAWS OF MALAYSIA Act 778 INTEREST SCHEMES ACT 2016 An Act to provide for the registration, administration and dissolution of schemes relating to interests and related matters. [31 January 2017, P.U. (B) 51/2017] ENACTED by the Parliament of Malaysia as follows: PART I PRELIMINARY Short title and commencement 1. (1) This Act may be cited as the Interest Schemes Act 2016. (2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different provisions of this Act. Interpretation 2. (1) In this Act, unless the context otherwise requires— “advertisement” means the disseminating or conveying of information, invitation or solicitation by any means or in any form including oral and written communication by means of print, electronic and any other media; 10 Laws of Malaysia ACT 778 “approved accounting standards” has the meaning assigned to it in the Companies Act 2016 [Act 777]; “approved company auditor” has the meaning assigned to it in the Companies Act 2016; “Commission” means the Companies Commission of Malaysia established under the Companies Commission of Malaysia Act 2001 [Act 614]; “company” means a company incorporated under the Companies Act 2016 or corresponding previous written law and includes a corporation that is a public company which is registered as a foreign company in Malaysia; “corresponding previous written law” means any written law relating to companies which has been at any time in force in any part of Malaysia and which corresponds with any provision of this Act; “Court” has the meaning assigned to it in the Companies Act 2016; “director” has the meaning assigned to it in the Companies Act 2016; “financial year”, in relation to a scheme, means the period of twelve months ending on 31 December or on such other date as specified in the trust deed or contractual agreement; “foreign company” has the meaning assigned to it in the Companies Act 2016; “foreign scheme” means a scheme relating to an interest of which the right to participate or a right to the interest in the scheme is offered by a management company which is a public company limited by shares on behalf of a foreign company; Interest Schemes 11 “interest” means any interest or right to participate, whether enforceable or not and whether actual, prospective or contingent whether in Malaysia or elsewhere— (a) in any investment scheme; (b) in any time-sharing scheme; or (c) in any recreational membership scheme, whether or not the interest or right is evidenced by a formal document or relates to a physical asset, but does not include— (i) any shares in or debenture of a corporation; (ii) a capital market product as defined in section 2 of the Capital Markets and Services Act 2007 [Act 671]; (iii) any interest in a partnership agreement unless the agreement— (A) relates to a contract, arrangement, undertaking, or enterprise promoted by or on behalf of a person whose ordinary business is or includes the promotion of similar contract, arrangement, undertaking or enterprise, whether or not that person is a party to the agreement; or (B) is an agreement, or is within a class of agreements, prescribed by regulations for the purposes of this paragraph; or (iv) any participatory interest in any product offered by the licensees regulated under the Financial Services Act 2013 [Act 758] and the Islamic Financial Services Act 2013 [Act 759], approved issuers of a designated payment instruments regulated under the Financial Services Act 2013 and the Islamic Financial Services Act 2013 and 12 Laws of Malaysia ACT 778 development financial institutions prescribed under the Development Financial Institutions Act 2002 [Act 618]; “interest holder” means a person who participates in a scheme; “management company”, in relation to any interests issued or proposed to be issued or any deed that relates to any interests issued or proposed to be issued, means a company incorporated under the Companies Act 2016 or corresponding previous written law by or on behalf of which the interests have been or are proposed to be issued; “Minister” means the Minister charged with the responsibility for companies; “officer” has the meaning assigned to it in the Companies Act 2016; “premium scheme” means a scheme relating to an interest of which the right to participate or a right to the interest in the scheme is offered by a management company which is a public company limited by shares; “product disclosure statement” means any product disclosure statement or invitation inviting applications or offers to subscribe for or purchase or offering for subscription or purchase any interest in a small scheme; “prospectus” means any prospectus, notice, circular, advertisement or invitation inviting applications or offers from the public to subscribe for or purchase or offering to the public for subscription or purchase any interest in premium scheme or foreign scheme; “registered scheme” means a small scheme, premium scheme or foreign scheme registered and authorized by the Registrar in accordance with section 10; “Registrar” means the Registrar as designated under section 20A of the Companies Commission of Malaysia Act 2001 [Act 614]; Interest Schemes 13 “scheme”, in relation to an interest, includes any contract, arrangement, undertaking, enterprise, programmes or plans of actions relating to an investment scheme, a time-sharing scheme or a recreational membership scheme; “Shariah Advisory Committee” means a committee established by the Commission under section 43; “Shariah compliant scheme” means a scheme referred to in section 4 of which the trust deed and prospectus or contractual agreement and product disclosure statement, whichever is applicable, are in compliance with the Shariah framework under section 43; “small scheme” means a scheme relating to an interest of which the right to participate or right to the inte