Overview of Malaysia’s Banking, Finance and Capital Markets Legal Framework 

In Malaysia, the conventional finance industry is governed by the Financial Services Act 2013 (FSA), which covers banking, insurance, money service business and exchange control. The FSA serves as the key statute regulating the industry, providing a comprehensive legal framework for the regulation and supervision of financial institutions, payment systems, and the capital market. 

The Islamic finance sector in Malaysia is governed by the Islamic Financial Services Act 2013 (IFSA). This act replaces previous statutes such as the Islamic Banking Act 1983 and the Takaful Act 1984, providing a similar comprehensive legal framework for the regulation and supervision of Islamic financial institutions and related activities. 

Both the FSA and IFSA provide for a regulatory environment that aims to promote the stability and efficiency of the financial system, protect consumers and investors, and encourage the growth and development of the financial sector in Malaysia. The Acts give powers to the central bank, the Bank Negara Malaysia, to issue and enforce regulations, supervise and inspect financial institutions, and enforce compliance with the provisions of the Acts. 

In summary, Malaysia’s legal framework for banking, finance and capital markets provides a stable and supportive environment for the development of these industries, while ensuring the protection of consumers and investors.