Emerging Markets Rates and Currencies Handbook

32 Citi | Emerging Markets Currencies Handbook 2021 A Non-Resident is allowed to buy or sell Foreign Currency against Ringgit for its own account: • on Spot Basis with a. a LOB; b. an Appointed Overseas Office (AOO) for: i. settlement of international trade in goods or services on Firm Commitment or Anticipatory basis; or ii. other purposes on Firm Commitment basis; • on Forward Basis (subject to paragraph 13 of Notice 1) with a LOB for: a. Current Account transaction on Firm Commitment or Anticipatory basis; or b. Financial Account Transaction on Firm Commitment basis. Where the Firm Commitment is a Ringgit- denominated derivative contract (excluding Exchange Rate Derivatives) offered by a Resident, the value of the transaction shall not exceed the net open position of the Ringgit exposure arising from the derivative contract, provided that the Forward Basis transaction shall be terminated when the Firm Commitment ceases to exist or the anticipated transaction does not materialise; or • on Forward Basis (subject to paragraph 13 of Notice 1) with an AOO for a. settlement of international trade in goods or services with a Resident on Firm Commitment or Anticipatory basis; or b. other purposes on Firm Commitment basis. Where the Firm Commitment is a Ringgit-denominated derivative contract (excluding Exchange Rate Derivatives) offered by a Resident, the value of the transaction shall not exceed the net open position of the Ringgit exposure arising from the derivative contract, provided that the Forward Basis transaction shall be terminated when the Firm Commitment ceases to exist or the anticipated transaction does not materialise. For further queries on transaction via an appointed overseas office, please speak to the onshore Sales team. For complete text on Notice 1: Dealings in Currency, Gold and Other Precious Metals, please refer to the link: https://www.bnm.gov.my/documents/20124/60360/No- tice+1_Dealings+in+Currency%2C+Gold+and+Other+Pre- cious+Metals.pdf Foreign Currencies A Resident is allowed to buy or sell Foreign Currency against another Foreign Currency on Spot Basis or Forward Basis with a LOB. A Non-Resident is allowed to buy and sell Foreign Currency against another Foreign Currency on Spot Basis or Forward Basis with a LOB. For further information and complete text of the Foreign Exchange Notices, please refer to the following links. https://www.bnm.gov.my/fep Regulation Offshore restrictions MYR is a non-internationalized currency, thus any offshore trading of MYR such as trading of MYR non-deliverable forwards (NDF) is not recognized. Please refer to BNM’s press release on 13 November 2016, ref no: 11/16/09 “Prohibiting Facilitation of NDF Related Transactions”. https://www.bnm.gov.my/-/prohibiting-facilitation-of-ndf- related-transactions Requirements to open a foreign currency account Documents required to open a foreign currency account include: • Account Opening Forms. • Tax related documents (examples include FATCA and CRS related documents). • KYC related documents (examples include identification documents of authorized signatories and shareholders). • Mandate to operate account (examples include board resolutions and power of attorney). • Governance documents (examples include certificate of incorporation, constitution, and particulars of directors, managers and secretaries). Deal Management Rollover : Rollovers are permitted by performing mark-to- market at prevailing market rates and with net settlement. Supporting documents may be required. Unwinding : Permitted by performing mark-to-market at prevailing market rates with net settlement, subject to the following conditions: 1. A request to unwind a trade for any of the following reasons: i. erroneous bookings, ii. residual value cancellations arising from bank charges or similar, or iii. for trades which were hedged based on “anticipatory basis”, All requests must be in writing and by authorized signatories stating the reasons for the request and providing details of the account to be debited/credited: Malaysia