Money Services Business Act 2024 to be amended from 1 August 2024

26 July 2024

The Minister of Finance II has appointed 1 August 2024 as the date on which the Money Services Business (Amendment) Act 2024 (“Amendment Act”) will come into operation vide Gazette Notification P.U.(B) 274/2024.
 
This article highlights the key amendments that will be made to the Money Services Business Act 2011 (“the Principal Act”) on 1 August 2024.
 
1.  Amendments to key terms
 
The following expressions will be amended throughout the Principal Act: 

• “money-changing business” will be replaced by “currency exchange business”; and
• “authorised dealer” will be replaced by “a licensed bank”. 

The exemption of licensed banks (formerly defined as authorised dealers) from the provisions of the Principal Act will be maintained.
 
2.  Facilitating the transfer of funds
 
A new definition of “facilitating the transfer of funds” will be introduced to section 2 of the Principal Act and will include any one of the following activities: 

• offering services to transfer funds;
• accepting or receiving funds;
• transporting funds;
• arranging for transfer of funds;
• issuing receipt for transfer of funds;
• utilising a system to transfer funds;
• allowing an account to be used for transfer or receipt of funds; or
• engaging in any form of settlement activity, including net settlement, set-off and debt assignment, arising from transfer of funds. 

3.  Definition of “remittance business” 
 
The definition of “remittance business” will be amended to include “the business of facilitating the transfer of funds”.
 
The effect of this amendment is two-fold. First, a person who carries on any of the activities falling within the definition of “facilitating the transfer of funds” will be deemed to be carrying on “remittance business” and require a licence to carry on “money services business” under the Principal Act. Second, a person who carries on any activity within the said definition without a “money services business” licence will commit an offence and could be subject to prosecution under the applicable provisions of the Principal Act.
 
4.  Enhanced penalty
 
Section 4 of the Principal Act presently provides that any person who carries on money services business[1] without a licence issued under the Principal Act will on conviction, be liable to a fine not exceeding RM5.0 million or to imprisonment for a term not exceeding 10 years or to both.
 
The Amendment Act will amend the penalty for this offence to introduce a mandatory term of imprisonment of not more than 10 years in addition to a fine of not less than RM50,000 but not more than RM5.0 million.
 
5.  Forfeiture of property upon prosecution for an offence
 
The Amendment Act introduces a new section 66A that empowers the court to order the forfeiture of property seized upon the offence being proved against the accused and the court is satisfied that the property is the subject matter of the offence or was used in the commission of the offence.
 
6.  Clarification of section 86
 
Section 86 of the Principal Act, among others, provides that it is an offence for a person to abet or engage in a criminal conspiracy to commit an offence under the Principal Act. The Amendment Act introduces a new section 86(3) to state that the expressions “criminal conspiracy” and “abet” have the same meaning assigned to them in sections 120A and 107 respectively of the Penal Code. The amendment also introduces three illustrations of abetment.
 
7.  Admissibility of evidence
 
The Amendment Act introduces a new section 89A to provide for the admissibility of evidence in respect of any document, computer or other evidence obtained by the Bank, an examiner or an investigating officer under the Principal Act in any court proceedings.
 
8.  Amendment of Schedule
 
The Schedule sets out the provisions of the Principal Act in respect of which administrative actions may not be commenced by Bank Negara Malaysia under section 75 of the Principal Act. The Amendment Act will delete nine of the provisions listed in the Schedule thus increasing the number of offences for which Bank Negara may initiate administrative action.
 
Other amendments
 
In addition to the amendments mentioned above, the Amendment Act also updates references in the Principal Act to legislation which have been introduced, amended or repealed since the Principal Act came into operation on 1 December 2011. For example, the Financial Services Act 2013 has replaced, and in some instances, been added to, the references in the Principal Act to the Banking and Financial Institutions Act 1989.
 
Lee Ai Hsian (Partner) of the Banking and Finance Practice of Skrine.
 
 
This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.