• Fairness of terms in a contract for financial services/products • Promotion of financial services or products • Provision of recommendations or advice • Complaints and dispute resolution mechanism The FSA also specifies prohibited business conduct (Schedule 7 of the FSA) where contravention may result in imprisonment not exceeding 5 years and or a fine of no more than RM 10 million, or to both. Institutions are expressly prohibited from exerting undue influence and pressure on consumers to make debt repayments and to accept unsolicited offers for financial products and services. The FSA also prohibits the following; • Engaging in conduct that is misleading or deceptive in relation to the nature, features, terms or price of financial services or products • Inducing financial consumers to do an act or omit to do an act in relation to financial services or products by o Making misleading, false or deceptive statements o Dishonestly concealing or omitting material facts o Recklessly making any statement, illustration, promise, forecast or comparison which is misleading, false or deceptive • Exerting undue pressure, influence or using or threatening to use harassment, coercion, or physical force in relation to the provision of or payment for financial services or products • Demanding payments for unsolicited financial services or products unless the financial consumer has communicated his acceptance of the offer either orally or in writing
• Exerting undue pressure on, or coercing, financial consumers to acquire financial services or products as a condition for acquiring another financial service or product • Colluding to fix or control the features or terms of financial services or products to the detriment of financial consumers, except for tariff or premium rates or policy terms approved by the Bank. Powers of the Bank Under the new regime, the Bank is endowed with wide powers to intervene in ensuring sound risk management and good governance policies. The Bank’s powers are broad, including the ability to restrict the institution from carrying on with a business arm and dispose of investments and assets if it deems necessary. Through the Bank’s ability to vet directors and senior officers, the Bank may intervene in an institution’s operations. This intervention even extends to the shareholders of institutions as the Bank now has the power to order share transfers or share issues to take place. Summary of powers of the Bank under the FSA; • Power to remove directors, CEOs, senior officers, etc • Assumption of control in certain circumstances (see Section 177) • Power to appoint a receiver and manager • Power to reduce share capital of institutions • Power to provide liquidity or financial assistance to institutions • Power to apply for winding up of institutions Section 234 of the FSA empowers the Bank to take action against individuals and corporations, where any failure to comply with provisions of the Act, directions, regulations, etc. will result in administrative action.
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