FMC rolls out appointed overseas office framework

KUALA LUMPUR: The Financial Markets Committee (FMC), which was established by Bank Negara Malaysia, has rolled out the appointed overseas office framework to provide flexibilities on ringgit transactions.

“This framework is intended to provide additional flexibilities on ringgit transactions where a nonresident financial institution appointed by a licensed onshore bank can undertake back-to-back transactions to facilitate settlement of trade and ringgit assets between non-resident with a resident,” said FMC in a statement yesterday.

Appointed overseas office refers to an appointed overseas parent company, subsidiary company, sister company, head office or branch of a licensed onshore bank's banking group, excluding a licensed international Islamic bank.

It said the framework, which was first introduced in 2007, is now expanded to include additional transactions.

“Additional transactions such as foreign exchange hedging (own account/on behalf of client) for current and financial account based on commitment, opening of ringgit account (book keeping) and extension of ringgit trade financing.

“By including non-resident financial institution outside the licensed onshore bank’s banking group, the expanded appointed overseas office framework allows non-resident traders and investors greater avenue to settle trade or investment in ringgit through an approved channel,” said FMC.