INTEREST SCHEMES ACT 2016

1 PART I PRELIMINARY-1. Short title and commencement.

(1) This Act may be cited as the Interest Schemes Act 2016 .

(2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different provisions of this Act.

2 PART I PRELIMINARY-2. Interpretation.

(1) In this Act, unless the context otherwise requires:

"advertisement" means the disseminating or conveying of information, invitation or solicitation by any means or in any form including oral and written communication by means of print, electronic and any other media;

"approved accounting standards" has the meaning assigned to it in the Companies Act 2016 [Act 777] ;

"approved company auditor" has the meaning assigned to it in the Companies Act 2016;

"Commission" means the Companies Commission of Malaysia established under the Companies Commission of Malaysia Act 2001 [Act 614] ;

"company" means a company incorporated under the Companies Act 2016 or corresponding previous written
3 PART II REGISTRATION OF SCHEMES-3. Issuance and requirement for registration of schemes.

(1) No person except a management company may issue or offer to the public for the subscription or purchase of or invite the public to subscribe for or purchase any interest.

(2) No person shall:

(a) issue or cause to be issued any advertisement inviting any person to become participants in a scheme, or offering any person to become participants in a scheme, or containing information calculated to lead directly or indirectly any person to become participants in a scheme, or containing an offer to become participants in a scheme; or

(b) advise or procure any person to become or offer any person to become a participant in the scheme,

unless the scheme is registered and authorized under this Act.

(3) Any person who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or a fine not exceeding fift
4 PART II REGISTRATION OF SCHEMES-4. Nature of schemes.

(1) A scheme shall be either:

(a) an investment scheme;

(b) a recreational membership scheme;

(c) a time-sharing scheme; or

(d) a combination of such schemes.

(2) A scheme is an investment scheme if the interest holder does not have day-to-day control over the operation of the scheme, whether or not the interest holder has the right to be consulted or to give direction and that:

(a) the interest holder contributes money or money's worth as a consideration to acquire a right or interest to profits, assets or realisation of any financial or business undertaking of the scheme, whether the right or interest are actual, prospective or contingent and are enforceable or not; or

(b) the contribution by the interest holder is pooled or used in common enterprise, to produce financial benefits, or benefits consistin
5 PART II REGISTRATION OF SCHEMES-5. Types of schemes that may be registered.

A scheme may be registered as a premium scheme, a small scheme or a foreign scheme.

6 PART II REGISTRATION OF SCHEMES-6. Registration of premium scheme.

(1) An application for the registration of a premium scheme may be made by a management company provided that the management company:

(a) is a public company limited by shares incorporated under the Companies Act 2016 or corresponding previous written law;

(b) specifies in its constitution that the management of interest scheme is one of its main objects; and

(c) meets the minimum amount of paid up capital as determined by the Commission.

(2) The Registrar shall have the power to impose any other conditions as he thinks fit for the purpose of registration of the premium scheme.

7 PART II REGISTRATION OF SCHEMES-7. Registration of small scheme.

(1) An application for the registration of a small scheme may be made by a management company provided that the management company:

(a) is a company limited by shares incorporated under the Companies Act 2016 or corresponding previous written law;

(b) specifies in its constitution that the management of the interest scheme is one of its main objects;

(c) meets the minimum amount of paid up capital as determined by the Commission; and

(d) will not raise fund exceeding the threshold as specified by the Commission.

(2) The Registrar shall have the power to impose any other conditions as he thinks fit for the purpose of registration of the small scheme.

8 PART II REGISTRATION OF SCHEMES-8. Registration of foreign scheme.

(1) An application for the registration of a foreign scheme may be made by a foreign company registered under Division 1 of Part V of the Companies Act 2016 provided that the foreign company:

(a) is a public company limited by shares at its country of origin;

(b) specifies in its constitution that the management of the interest scheme is one of its main objects;

(c) meets the minimum amount of paid up capital as determined by the Commission; and

(d) has been given the recognition or power to offer or proposed to offer interests to the public at its country of origin by the authority responsible for regulating schemes relating to interests.

(2) The Registrar shall have the power to impose any other conditions as he thinks fit for the purpose of registration of the foreign scheme.

9 PART II REGISTRATION OF SCHEMES-9. Application for registration of a scheme.

(1) A management company may apply to the Registrar in the manner as determined by the Registrar for the registration of one or more schemes referred to in section 5.

(2) An application to register a scheme shall be made to the Registrar by providing the following information:

(a) the name of the management company;

(b) the names and addresses of the directors, secretary and auditor of the management company;

(c) if the scheme or part of the scheme is managed by a third party, the names and addresses of the third party;

(d) the names and addresses of the trustees appointed by the management company;

(e) in the case of a foreign scheme, the names and addresses of the foreign company, its directors and agents in Malaysia as referred to in Division 1 of Part V of the Companies Act 2016 and the trustees appointed by the management company;

10 PART II REGISTRATION OF SCHEMES-10. Certificate of authorization.

(1) Upon approval of the application under section 9, the Registrar shall enter the particulars of the scheme in the register and:

(a) issue a certificate of authorization; and

(b) allocate an authorization number,

to the management company in respect of the scheme.

(2) In issuing a certificate of authorization, the Registrar shall have the power to impose any terms and conditions as he thinks fit.

(3) The certificate of authorization issued under this section shall be conclusive evidence that the requirements of this Act in respect of registration have been complied with and that the scheme is registered under this Act.

11 PART II REGISTRATION OF SCHEMES-11. Power of Registrar to suspend certificate of authorization.

(1) The Registrar shall have the power to suspend the certificate of authorization issued under section 10 if there is an action against the person to determine:

(a) whether there is a contravention of any provision under this Act or the Companies Act 2016; or

(b) whether there is a contravention of any condition or restriction imposed in relation to the approval.

(2) Upon the determination of the matters as specified in paragraph (1) (a) or (b) being made, the Registrar shall have the power to further suspend the certificate of authorization if the Registrar is satisfied that there is a case against the management company.

12 PART II REGISTRATION OF SCHEMES-12. Revocation of certificate of authorization.

(1) The Registrar may revoke the certificate of authorization issued under section 10 if:

(a) the management company has contravened any provision of this Act;

(b) the management company has contravened any provision of the Companies Act 2016;

(c) the management company has failed to comply with any conditions imposed by the Registrar under subsection 10(2);

(d) it is desirable in the interest of interest holders or potential interest holders to do so; or

(e) the scheme is used for unlawful purposes or for purposes prejudicial to public peace, welfare or good order or contrary to the national security or interest.

(2) Before revoking the certificate of authorization, the Registrar may serve on the management company a notice requiring the management company to show cause within thirty days from the date of the notice as to why the cer
13 PART II REGISTRATION OF SCHEMES-13. Appeal to the Minister on revocation.

(1) A management company which is aggrieved by the decision of the Registrar under section 12 may appeal to the Minister in writing within thirty days after being notified of the decision.

(2) Where an appeal is made under subsection (1), the decision of the Registrar under section 12 shall not take effect until the appeal is disposed of by the Minister.

(3) On an appeal, the Minister may affirm, vary or set aside the decision of the Registrar or make any decision that the Minister thinks fit.

14 PART II REGISTRATION OF SCHEMES-14. Power to refuse registration.

The Registrar shall refuse to register the application of a proposed scheme if he is satisfied that:

(a) the proposed scheme is likely to be used for unlawful purposes or for purposes prejudicial to public peace, welfare or good order in Malaysia; or

(b) the registration of the proposed scheme would be contrary to the national security or interest.

15 PART II REGISTRATION OF SCHEMES-15. Provision applicable to foreign schemes on reciprocity arrangement.

(1) If, under:

(a) any law of a foreign country; or

(b) any regulatory or supervisory action taken by an authority or body in a foreign country,

a company offering a scheme is suspended, disqualified or restricted from administering a scheme in that country, the Minister may by notice served on a person connected with that country who is administering or intends to administer a scheme in Malaysia, suspend, disqualify or restrict the business of such person in a similar manner.

(2) The notice under subsection (1) may not be served unless:

(a) it is in the national interest; or

(b) the Minister has consulted the person concerned or, if expedient, a body representing the interest of the person to be affected.

(3) The notice shall:

(a) state the grounds on which it is given;

16 PART II REGISTRATION OF SCHEMES-16. Conversion from small scheme to premium scheme.

(1) A small scheme may be converted to a premium scheme if its management company fulfils the requirement specified in section 6.

(2) A management company may apply to convert a small scheme to a premium scheme by lodging with the Registrar:

(a) a statement signed by all of its directors in the manner and form as the Registrar may determine containing the information specified in subsection 9(2) and the following particulars:

(i) the name and authorization number of the small scheme;

(ii) the date on which the small scheme was registered and authorized;

(iii) that as at the application date, the management company appears to be able to pay its debts as the debts become due in the normal course of business;

(iv) that as at the application date, all outstanding statutory fees or any amount owing to any government agency has been settled;

(v) that the management com
17 PART II REGISTRATION OF SCHEMES-17. Registration of conversion.

(1) Upon receiving the statement and documents under section 16 and upon payment of a prescribed fee, the Registrar may, subject to the provisions of this Act, register the scheme as a premium scheme and issue a certificate of authorization in the form as the Registrar may determine stating that the premium scheme is registered under this Act, from the date specified in the notice.

(2) The Registrar may approve or refuse the application if he is not satisfied with the particulars or other information furnished under the provisions of this Act.

18 PART II REGISTRATION OF SCHEMES-18. Effect of conversion.

From the date of registration of conversion:

(a) all properties vested in the small scheme, all interests, rights, privileges, liabilities and obligations relating to the scheme, and the whole of the undertaking of the scheme, as the case may be, shall be transferred to and vest in the premium scheme without further assurance, act or deed; and

(b) the small scheme shall cease.

19 PART III TRUST DEED, TRUSTEES AND PROSPECTUS Chapter 1 - Trust Deeds and Contractual Agreements-19. Approval of trust deed and contractual agreement.

(1) For the purposes of an application under section 9, an approval for a trust deed or contractual agreement shall only be granted if:

(a) an approval for the appointment of trustee referred to in subsection 22(2) has been obtained; and

(b) the approval for the appointment of the trustee has not been revoked and the trustee has not ceased office.

(2) In granting the approval, the Registrar shall have the power to impose any conditions that he thinks fit.

20 PART III TRUST DEED, TRUSTEES AND PROSPECTUS Chapter 1 - Trust Deeds and Contractual Agreements-20. Contents of trust deed and contractual agreement.

(1) Any provision in a trust deed or a contractual agreement which is inconsistent with this Act is void.

(2) The Registrar shall not grant his approval to a trust deed or a contractual agreement unless the trust deed or the contractual agreement contains the following:

(a) the provisions relating to the appointment of trustees;

(b) the covenants as set out in the First Schedule;

(c) the provision on charges that may be made by the management company unless the charges do not exceed the percentages or amounts as are prescribed in the regulations;

(d) the provision on the price at which the interests to which the trust deed or a contractual agreement relates are to be sold or purchased by the management company unless the price is consistent with the regulations; and

(e) such other matters or things that are required to be included in the trust deed
21 PART III TRUST DEED, TRUSTEES AND PROSPECTUS Chapter 1 - Trust Deeds and Contractual Agreements-21. Amendment to trust deed and contractual agreement and void provisions.

(1) The parties to a trust deed or a contractual agreement may amend a trust deed or contractual agreement by supplemental trust deed or supplemental contractual agreement, as the case may be.

(2) No amendment of a trust deed or contractual agreement is valid unless the approval of a majority in value of interest holders has been obtained in the manner specified in the trust deed or contractual agreement.

(3) The Registrar may direct that the approval under subsection (2) be dispensed with if the Registrar is satisfied, subject to the trustee certifying the fact under that subsection, that the amendment:

(a) is required only to enable the provisions of this Act or of the trust deed or contractual agreement to be complied with;

(b) will not materially affect the existing benefits of the interest holders;

(c) will not prejudice the interests of the interest holders;

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22 Chapter 2 - Trustees-22. Appointment of trustees.

(1) Prior to the registration of a scheme under section 9, a management company shall, subject to section 23, appoint a trustee to act for the interest holders.

(2) The appointment of a trustee by the management company shall be subject to the approval of the Registrar.

(3) In granting his approval under subsection (2), the Registrar may, having regard to the nature of the contract, arrangement, undertaking or enterprise, to which a trust deed or contractual agreement relates, impose on the trustee such terms and conditions as he thinks fit.

23 Chapter 2 - Trustees-23. Eligibility for appointment as trustees.

(1) The companies registered under the Trust Companies Act 1949 [Act 100] or any other person approved by the Minister, shall be eligible to be appointed as trustees.

(2) Notwithstanding subsection (1), no person shall be eligible to be appointed as trustee, if:

(a) the person is directly or indirectly associated with the persons who have control over the management company; or

(b) the person is an adjudicated bankrupt.

(3) For the purposes of this section, unless the contrary is proved, a person is presumed to have control over the management company if the person is entitled to exercise or control the exercise of not less than twenty per centum of votes attached to the voting shares of the management company.

(4) If a trustee has been adjudicated bankrupt, the trustee shall no longer be eligible to act as a trustee and the management company shall immediatel
24 Chapter 2 - Trustees-24. Duties of trustees.

(1) Every trustee shall:

(a) exercise all due diligence and vigilance in carrying out his functions and duties as a trustee and in monitoring the rights and interests of the interest holders to which the trust deed or contractual agreement, as the case may be, relates;

(b) ensure that the covenants in the trust deed, supplemental trust deed, contractual agreement or supplemental contractual agreement and contents in the prospectus or product disclosure statement are delivered; and

(c) carry out his duties in a timely manner.

(2) The trustee shall immediately report to the Registrar, when:

(a) there is any non-compliance of the Act, trust deed, contractual agreement, prospectus or product disclosure statement, as the case may be;

(b) the scheme is unable to meet its obligation as they fall due; or

(c) the
25 Chapter 2 - Trustees-25. Liability of trustees.

(1) Subject to this section, any provision contained:

(a) in a trust deed or a contractual agreement that is or at any time has been approved by the Registrar; or

(b) in any contract with the interest holders to which such a trust deed or contractual agreement relates,

shall be void so far as it would have the effect of exempting a trustee under the trust deed or contractual agreement from, or indemnifying a trustee against, liability for breach of trust where the trustee fails to show the degree of care and diligence required of a trustee.

(2) Subsection (1) shall not invalidate:

(a) any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release; or

(b) any provision enabling such a release to be given:

(i) on the approval of a majority of n
26 Chapter 2 - Trustees-26. Resignation and removal of trustees.

(1) The trustees may resign by giving three months' written notice or such shorter period in accordance with the provisions of the trust deed or contractual agreement, as the case may be.

(2) The management company may remove the trustees by giving three months' written notice to the trustees and the interest holders.

(3) The notice under subsection (2) shall be invalid if the removal is objected by at least fifty per centum of the interest holders.

(4) The interest holders may remove the trustees by giving three months' notice to the trustee and the management company after the decision was made through a resolution of the meeting of the interest holders and agreed by not less than ten per centum of the interest holders present in person or by proxy.

(5) On the resignation or removal of the trustees, the management company shall appoint a new trustee by way of supplemental trust deed or supplemental contractual agreemen
27 Chapter 3 - Prospectus and Product Disclosure Statement-27. Prohibition of issuing prospectus or product disclosure statement without approved trust deed or approved contractual agreement.

(1) A person shall not issue or offer to public for subscription or purchase or invite the public to subscribe for or purchase any interest unless, at the time of the issue, offer or invitation, there is in force, in relation to the interest:

(a) in the case of a premium scheme or a foreign scheme, an approved trust deed; or

(b) in the case of a small scheme, an approved contractual agreement.

(2) A person shall not in any trust deed, contractual agreement, prospectus, product disclosure statement, advertisement or other document relating to any interest make any reference to an approval granted under this Act.

(3) A person who contravenes this section commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding three years or to both.

28 Chapter 3 - Prospectus and Product Disclosure Statement-28. Requirement to register and lodge prospectus or product disclosure statement.

(1) A prospectus or product disclosure statement shall not be issued, circulated or distributed by any person unless:

(a) the prospectus or product disclosure statement has first been registered by the Registrar; and

(b) the prospectus or product disclosure statement has complied with the provisions of this Act.

(2) A prospectus or product disclosure statement registered with the Registrar under this Act shall be lodged with the Registrar before the date of issue.

(3) A person shall not issue, circulate or distribute any form of application for subscription of interest of a scheme unless:

(a) he is authorized in writing by the Registrar; and

(b) the form is accompanied with a copy of a prospectus or product disclosure statement which has been registered by the Registrar.

(4) A person who contravenes this sect
29 Chapter 3 - Prospectus and Product Disclosure Statement-29. Registration of prospectus or product disclosure statement.

A prospectus or product disclosure statement shall be registered if:

(a) a copy of the prospectus or product disclosure statement signed by every director and every person who is named in the prospectus or product disclosure statement as a proposed director of the management company or by his agent authorized in writing is lodged with the Registrar on or before the date of its issue;

(b) the prospectus or product disclosure statement is submitted to the Registrar together with:

(i) a written application for the registration of the prospectus or product disclosure statement;

(ii) copies of all consents required under section 33;

(iii) copies of all material contracts referred to in the prospectus or product disclosure statement or, in the case of a contract not reduced into writing, a memorandum giving full particulars of the contract, verified in accordance with any req
30 Chapter 3 - Prospectus and Product Disclosure Statement-30. Refusal to register prospectus or product disclosure statement.

(1) The Registrar shall refuse to register a prospectus or product disclosure statement if:

(a) the Registrar is of the opinion that the prospectus or product disclosure statement does not comply with any provision of this Act;

(b) the issue or invitation in respect of interests to which the prospectus or product disclosure statement relates does not comply with this Act; or

(c) the Registrar is of the opinion that the prospectus or product disclosure statement contains any statement or information that is false or misleading or that the prospectus or product disclosure statement contains any statement or information from which there is a material omission.

(2) If the Registrar is of the opinion that the management company or the directors of the management company making such offer or invitation is not a fit and proper person to make such an issue or invitation to th
31 Chapter 3 - Prospectus and Product Disclosure Statement-31. Keeping of documents relating to prospectus or product disclosure statement.

(1) A management company shall cause a copy of:

(a) any consent required under section 33 in relation to the issue of the prospectus or product disclosure statement; and

(b) every material contract or document referred to in the prospectus or product disclosure statement,

to be deposited at the registered office of the management company in Malaysia after the registration of the prospectus or product disclosure statement and shall keep each copy for the period as may be specified by the Registrar.

(2) The copies referred to in subsection (1) shall be made available for inspection by any person without charge.

(3) A person who contravenes this section commits an offence and shall, on conviction, be liable to a fine of two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

32 Chapter 3 - Prospectus and Product Disclosure Statement-32. Contents of prospectus or product disclosure statement.

(1) Every prospectus or product disclosure statement issued under this Act shall comply with the requirements relating to the contents of the prospectus or product disclosure statement as specified in the Second Schedule.

(2) In the event of non-compliance with or contravention of this section, a director or other person responsible for the prospectus or product disclosure statement shall not incur any liability if:

(a) with regards to any matter not disclosed, the director or other person proves that he has no knowledge of the non-compliance or contravention;

(b) the director or other person proves that the non-compliance or contravention arose from an honest mistake on his part concerning the facts; or

(c) the non-compliance or contravention is in respect of a matter which in the opinion of the Court dealing with the case is immaterial or is otherwise in the opinion of the Court
33 Chapter 3 - Prospectus and Product Disclosure Statement-33. Consent from person to issue prospectus or product disclosure statement containing his statement.

(1) A prospectus or product disclosure statement which includes a statement purporting to be made by any person including experts, or to be based on a statement made by such person, shall not be issued unless:

(a) the person has given his written consent to the issue of the prospectus or product disclosure statement with the statement made in the form and context in which the consent is included and has not withdrawn such consent before the date of issue of the prospectus or product disclosure statement; and

(b) there appears in the prospectus or product disclosure statement, a statement that the person has given and has not withdrawn his consent.

(2) Subsection (1) shall not apply to a statement which is an extract of an official statement or any other statement as may be specified by the Registrar.

(3) If any prospectus or product disclosure statement is issued in contravent
34 Chapter 3 - Prospectus and Product Disclosure Statement-34. Relief from requirements in relation to form and content of prospectus or product disclosure statement.

(1) The Registrar may, on the application in writing by any person required to comply with subsection 32(1), relieve that person or approve any variation from the requirements of this Act relating to the form and content of a prospectus or product disclosure statement.

(2) In granting the relief or approval of the variation under subsection (1), the Registrar may impose such terms and conditions as the Registrar thinks fit.

(3) The Registrar shall not grant a relief or an approval of the variation under subsection (1) unless he has considered the nature and objectives of the scheme and is satisfied that:

(a) the relief or variation does not cause the non-disclosure to the public of information necessary for the assessment of the investment in the scheme; and

(b) the compliance with the requirements for which the relief or variation is applied for would impose unreasonable burden on the appl
35 Chapter 3 - Prospectus and Product Disclosure Statement-35. Certain advertisement deemed to be prospectus or product disclosure statement.

(1) Every advertisement offering or calling an attention to an offer or intended offer to the public in respect of interests shall be deemed to be a prospectus if the advertisement contains the following information:

(a) the number and description of the interests;

(b) the name and date of registration of the management company and its paid up share capital;

(c) a concise statement of the general nature of the activity of the scheme, the names, addresses and occupations of the directors or proposed directors and the trustees for the interest holders;

(d) the particulars of the opening and closing dates of the offer and the time and place at which copies of the full prospectus and forms of application for the interests may be obtained; and

(e) states that applications for subscription of interests will proceed only on the forms of application being referred
36 Chapter 3 - Prospectus and Product Disclosure Statement-36. Document containing offer of interests for sale to be deemed prospectus or product disclosure statement.

(1) Where a management company allots or agrees to allot any interest of the scheme to any person with a view to all or any of the interest of the scheme being offered for sale to the public, any document of the offer for sale made to the public shall be deemed to be a prospectus issued by the management company for all purposes.

(2) Where the documents are deemed to be prospectus for the purposes of subsection (1), the provisions under this Chapter regarding the contents of prospectus and liability in respect of false or misleading statements and material omissions shall be applicable and have effect accordingly as if:

(a) the interests have been offered to the public; and

(b) the persons accepting the offer in respect of any interests were subscribers,

but without prejudice to the liability, if any, of the persons making the offer in respect of false or misleading statements
37 Chapter 3 - Prospectus and Product Disclosure Statement-37. Information memorandum deemed to be prospectus or product disclosure statement.

Any information memorandum purporting to describe the business affairs of the person making the offer issued by that person or his agent shall be deemed to be a prospectus or product disclosure statement, in so far as regarding the liability of the person or his agent, for any untrue statement or non-disclosure of material information.

38 Chapter 3 - Prospectus and Product Disclosure Statement-38. Supplemental prospectus or replacement prospectus.

(1) This section applies if, after the registration of a prospectus but before its issue, the person who registered or lodged the prospectus becomes aware that:

(a) a significant new matter has arisen being a matter the information of which is required by this Act to be disclosed in a prospectus;

(b) there is a significant change affecting a matter disclosed in the prospectus;

(c) the prospectus contained a material statement that is false or misleading; or

(d) there is a material omission from the prospectus.

(2) After becoming aware of the matters referred to in subsection (1), the person shall, as soon as practicable, submit a supplemental or replacement prospectus, as the case may be.

(3) A supplemental prospectus shall:

(a) clearly identify the prospectus to which the supplemental prospectus relates; and

39 Chapter 3 - Prospectus and Product Disclosure Statement-39. Civil liability for misstatement in prospectus or product disclosure statement.

(1) A person who subscribes for or purchases any interest and suffers loss or damage as a result of any statement or information contained in a prospectus or product disclosure statement that is false or misleading or any statement or information contained in a prospectus from which there is a material omission may recover the amount of loss or damage from the following persons:

(a) the management company and each director of the management company at the time of the issue of the prospectus, for any loss or damage;

(b) the person who consented or caused himself to be named and is named in the prospectus as a director or as having agreed to become a director, either immediately or after an interval of time, for any loss or damage;

(c) a promoter, for any loss or damage in respect of the prospectus or the relevant part of the prospectus for which he is involved in the preparation;

40 Chapter 3 - Prospectus and Product Disclosure Statement-40. Criminal liability for misstatement in prospectus or product disclosure statement.

(1) No person shall authorize or cause the issuance of a prospectus that contains:

(a) any statement or information that is false or misleading; or

(b) any material omission from any statement or information.

(2) For the purposes of this section, it shall be a defence for a person if he proves either that:

(a) the statement or omission is immaterial; or

(b) he has made all enquiries as are reasonable in the circumstances and after making such enquiries, he has reasonable grounds to believe and did believe the statement is true or the omission is immaterial up to the time of the issue of the prospectus.

(3) This section shall be applicable to product disclosure statement issued by a management company and any references to "prospectus" shall be construed as references to "product disclosure statement".

(4) Any
41 Chapter 3 - Prospectus and Product Disclosure Statement-41. Registrar and persons not to be taken to have authorized or caused issuance of prospectus or product disclosure statement.

(1) For the purposes of this Chapter, the Registrar shall not be taken to have been involved in the preparation of a prospectus or product disclosure statement or authorized or caused the issuance of a prospectus or product disclosure statement for any reason including when he performed his functions or exercised his powers under this Act.

(2) For the purposes of sections 39 and 40, a person shall not be deemed to have authorized or caused the issue of a prospectus or product disclosure statement by reason of:

(a) him having given a consent as required under section 33; or

(b) his name being included in the prospectus as a trustee for interest holders, auditor, banker and advocate and solicitor.

42 Chapter 3 - Prospectus and Product Disclosure Statement-42. Stop order.

(1) Where in the opinion of the Registrar:

(a) a prospectus or product disclosure statement does not comply with or is not prepared in accordance with any provision of this Act;

(b) a prospectus or product disclosure statement contains a statement or information that is false or misleading;

(c) a prospectus or product disclosure statement contains a statement or information from which there is a material omission; or

(d) the management company has contravened any provision of the Companies Act 2016,

the Registrar may, by stop order in writing served on the management company or such other person as the Registrar may determine, direct the management company or such other person not to allot, issue, offer, make an invitation to subscribe for or purchase or sell, further interests to which the prospectus or product disclosure statement relates, as the ca
43 Chapter 3 - Prospectus and Product Disclosure Statement-43. Issuance of trust deeds, contractual agreements, prospectuses or product disclosure statements in accordance with Shariah principles.

(1) A trust deed, contractual agreement, prospectus or product disclosure statement as required under this Chapter may be issued in accordance with Shariah principles as approved by the Commission.

(2) The Commission shall have the power to establish a Shariah Advisory Committee to advise the Commission and the Registrar on the appropriate Shariah framework to be adopted and approved for the purposes of this Act.

44 PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 - Management Company-44. Management company to have registered office in Malaysia.

(1) A management company shall maintain a registered office in Malaysia at all times.

(2) The management company shall notify the Registrar of any change in the address of its registered office within fourteen days of such change.

(3) The management company and every officer who contravene this section commit an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit.

45 PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 - Management Company-45. General duties and obligations of management company.

(1) Every management company shall:

(a) take all reasonable steps and exercise due diligence to ensure that the scheme is managed in accordance with the provisions of this Act, offer document such as the prospectus or product disclosure statement and the trust deed or the contractual agreement;

(b) exercise due diligence and care in managing assets and funds of the scheme;

(c) be responsible for the act and omissions of its employees, any person for the time being exercising the functions of the management company or the persons whose services have been availed by the management company;

(d) remain liable to the interest holders for any commissions or omissions, notwithstanding anything contained in any contract or agreement;

(e) ensure that its officers or employees do not make improper use of their position or information to gain, directly or indirectly,
46 PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 - Management Company-46. Obligations to trustees.

(1) A management company:

(a) shall pay to the trustees any money payable to the trustee under the trust deed or contractual agreement within thirty days after the money is received by the company;

(b) shall not without the approval of the trustees, publish or cause to be published any advertisement, circular or other document containing any statement with respect to the sale price of interests or the yield to which the trust deed or contractual agreement relates or containing any invitation to buy interests;

(c) shall make available or ensure that there is made available to the trustees any details as the trustees require with respect to all matters relating to the contract, arrangement, undertaking or enterprise to which the trust deed or contractual agreement relates;

(d) shall make available to the trustee all the books of the company, whether kept at the registered of
47 PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 - Management Company-47. Duty to buy back interests.

A management company shall, at the request of an interest holder, purchase any interest from the interest holder and the purchase price will be the price calculated in accordance with the trust deed or contractual agreement.

48 PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 - Management Company-48. Separation of funds of interest holders and other persons.

(1) The management company shall ensure that a separate trust account is maintained and controlled by the trustees for each scheme that the management company administers.

(2) Funds deposited into a trust account referred to in subsection (1) may only be withdrawn for the purposes of making payment:

(a) to an interest holder or person entitled to such payment; or

(b) in accordance with this Act, any other written law, the trust deed or contractual agreement.

(3) Any excess remaining in the trust account after payment of or provision for all claims of interest holders whose funds have, or should have been deposited in such account, is not considered as a trust property and shall be dealt with as if the excess were unclaimed moneys under the law relating to unclaimed moneys.

(4) The Registrar may, on an application from a person having a financial interest or a claim aga
49 PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 - Management Company-49. Prohibition to invest and lend money to management company, etc .

(1) The money available for investment under the trust deed or the contractual agreement shall not be invested in or lent to the management company, trustee or to any company deemed to be related to the management company or the trustees under section 7 of the Companies Act 2016.

(2) Notwithstanding subsection (1), the money available for investment under the trust deed or the contractual agreement may be invested in or lent to a prescribed corporation.

(3) For the purposes of this section, "prescribed corporation" means:

(a) a banking corporation; or

(b) a corporation or a corporation of a class which, on the recommendation of the Central Bank of Malaysia, has been declared by the Minister charged with the responsibility for finance to be a prescribed corporation by notice published in the Gazette .

(4) The management company and every officer who contravene t
50 PART IV MANAGEMENT, AUDIT AND MEETINGS Chapter 1 - Management Company-50. Registrar may specify duties, obligations and conduct relating to schemes.

In relation to each type of scheme, the Registrar shall have the power to specify:

(a) the duties, obligations and conduct of a management company;

(b) the duties and obligations of the trustees;

(c) the calculation of issued price and buy back price of each unit of interest;

(d) the management of funds of the scheme;

(e) the requirements relating to meetings of interest holders; and

(f) any other matters to the benefit of interest holders.

51 Chapter 2 - Accounts and Audit-51. Accounting records and audit.

(1) A management company and every director and manager of the management company shall:

(a) cause to be kept such accounting and other records as will sufficiently explain the transactions and financial position of the scheme and enable a true and fair profit and loss accounts and balance sheets and any documents required to be attached to the records to be prepared; and

(b) cause the records in paragraph (a) to be kept in such manner as to enable the records to be conveniently and properly audited.

(2) A management company and every director and manager of the management company shall cause appropriate entries to be made in the accounting and other records within sixty days of the completion of the transactions to which the entries relate.

(3) Notwithstanding subsection (1), the accounting and other records of operations outside Malaysia may be kept by the managemen
52 Chapter 2 - Accounts and Audit-52. Appointment and approval of auditor.

(1) A management company shall appoint an auditor for the purpose of auditing the whole of the business of the scheme administered by the management company.

(2) No director or employee of a management company, trustee or custodian and no firm of which any such director or employee is a member may be appointed as an auditor of an interest scheme.

(3) An auditor who has been removed by a management company from his office as an auditor shall inform the Registrar within seven days from the date of his removal.

53 Chapter 2 - Accounts and Audit-53. Powers and duties of auditor.

(1) Every auditor of a scheme shall report to the interest holders on the financial statements and on the scheme's accounting and other records relating to those financial statements and the report shall be circulated to the interest holders.

(2) An auditor shall state in the report referred to in subsection (1):

(a) whether the financial statements are in his opinion properly drawn up:

(i) so as to give a true and fair view of the scheme's affairs; and

(ii) in accordance with the applicable approved accounting standards;

(b) if in his opinion the financial statements have not been drawn up in accordance with a particular applicable approved accounting standard:

(i) whether in his opinion the financial statements, would, if drawn up in accordance with that approved accounting standard, have given a true and fair view of the scheme's af
54 Chapter 2 - Accounts and Audit-54. Duty of auditor to disclose irregularity or undesirable practice.

(1) Every auditor shall:

(a) in the course of performance of his duties as an auditor of a scheme, report to the management company:

(i) any irregularity or undesirable practice in the administration of the scheme which has come to his knowledge; or

(ii) any serious offence involving fraud or dishonesty has which been committed by the officers of the management company; and

(b) submit a copy of such report to the Registrar if there is reasonable cause to believe that such report is or might be of material significance to the Registrar.

(2) For the purposes of this section:

(a) a report is of material significance to the Registrar if it deals with a matter which, because of its nature or potential financial impact, has caused or is likely to cause financial loss to the scheme or any of its interest holders or cred
55 Chapter 3 - Meetings of a Scheme-55. Requisition of meeting by interest holders.

(1) The interest holders of a scheme may require the directors of a management company to call for a meeting of interest holders.

(2) The directors of the management company shall call for the meeting of interest holders if the management company received an application from not less than fifty in number or ten per centum of the interest holders, whichever is lesser.

(3) A meeting summoned for the purposes of this section shall be:

(a) held at the time and place specified in the notice and advertisement, being a time not later than two months after the giving of the notice;

(b) chaired by:

(i) a person who is appointed by the interest holders to which the trust deed or contractual agreement relates who are present at the meeting; or

(ii) where no appointment is made under subparagraph (i), a nominee of the trustee; and

(c) conducte
56 Chapter 3 - Meetings of a Scheme-56. Notice of meetings of interest holders.

(1) A meeting of the interest holders shall be called by a notice of at least twenty-one days or any longer period as specified in the trust deed or contractual agreement.

(2) A notice of meeting of the scheme shall be sent to:

(a) every interest holder;

(b) every trustee; and

(c) every auditor.

57 Chapter 3 - Meetings of a Scheme-57. Manner in which notice is given.

(1) Notice of a meeting of interest holders shall be in writing and shall be given to the interest holders either:

(a) in hard copy;

(b) in electronic form;

(c) partly in hard copy and partly in electronic form; or

(d) by means of a website.

(2) Unless otherwise provided in a trust deed or contractual agreement, a notice:

(a) given in hard copy shall be sent to any interest holder either personally or by post to the address supplied by the interest holder to the management company for such purpose; or

(b) given in electronic form shall be transmitted to the electronic address provided by the interest holder to the management company for such purpose or by publishing on a website.

58 Chapter 3 - Meetings of a Scheme-58. Notification of publication of notice of meeting on website.

(1) Notice of a meeting of interest holders shall not be validly given by a management company by means of a website unless a notification to that effect is given in accordance with this section.

(2) The management company shall notify the interest holders of the publication of the notice on the website and such notification shall be in writing and shall be given in hard copy or electronic form stating:

(a) that it concerns a meeting of interest holders; and

(b) the place, date and time of the meeting.

(3) The notice shall be made available on the website throughout the period beginning from the date of the notification referred in subsection (2) until the conclusion of the meeting.

59 Chapter 3 - Meetings of a Scheme-59. Procedures at meetings and proxies.

The provisions under Subdivisions 5 and 6 of Division 5 of Part III of the Companies Act 2016, in relation to a company limited by shares, shall apply to procedures of meeting and proxies with the following modifications:

(a) references to "company" shall be construed as references to "management company";

(b) references to "constitution" shall be construed as references to "trust deed" or "contractual agreement"; and

(c) references to "member" shall be construed as references to "interest holders".

60 Chapter 3 - Meetings of a Scheme-60. Records of resolutions and meetings, etc .

(1) Every management company shall keep records comprising minutes of all proceedings of annual meetings.

(2) The records shall be kept for at least seven years from the date of the meeting or decision.

(3) The management company and every officer who contravene this section commit an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit and in the case of a continuing offence, to a further fine not exceeding five hundred ringgit for each day during which the offence continues after conviction.

61 Chapter 3 - Meetings of a Scheme-61. Records as evidence of resolutions, etc .

(1) The minutes of proceedings of an annual meeting, if purporting to be signed by the chairman of that meeting or by the chairman of the next annual meeting, are sufficient evidence of the proceedings at the meeting.

(2) Where there is a record of proceedings of an annual meeting of a scheme, then, until the contrary is proved:

(a) the meeting is deemed to be duly held and convened; and

(b) all proceedings at the meeting are deemed to have taken place.

62 PART V WINDING UP OF SCHEMES-62. Winding up of scheme as required by trust deed or contractual agreement.

(1) The trust deed or contractual agreement of a scheme may provide that the scheme is to be wound up:

(a) at a specified time; or

(b) in the specified circumstances or on the happening of a specified event.

(2) A provision of the trust deed or contractual agreement that purports to provide that the scheme is to be wound up if a particular company ceases to be its management company shall be void.

Legal Commentary on Section 62 of the INTEREST SCHEMES ACT 2016
Introduction
Section 62 of the Interest Schemes Act 2016 (ISA 2016) addresses the penalties and punishments for contraventions related to interest schemes, ensuring regulatory compliance and investor protection within the framework of Malaysian law.
What does Section 62 Say
While the specific wording of Section 62 is not directly provided in the sources, it generally pertains to the penalties imposed for violations of the Act, particularly related to illegal or non-compliant interest schemes, including failure to adhere to registration, management, and operational requirements.
Essential Ingredients
Contravention of the Act: The section applies when a person or entity breaches provisions of the ISA 2016.
Offense and Liability: The section establishes that contravention constitutes an offense.
Punishment: It prescribes fines, penalties, or other sanctions upon conviction.
Scope of Section
Applies to management companies, promoters, or any persons involved in interest schemes who violate registration, operational, or other regulatory provisions under the ISA 2016.
Encompasses violations related to the management of interest schemes, including failure to maintain separate trust accounts or non-compliance with regulatory requirements.
Punishment for Section
Penalties may include fines, imprisonment, or both, as determined by the courts.
The fines can be substantial; for example, contravention under related laws like the Companies Act 2016 can attract fines up to RM10,000 or more .
Legal Comments
"Offense" - Contravention of Section 62 constitutes a legal offense under the ISA 2016, making offenders liable to penalties upon conviction .
"Penalties" - The Act prescribes fines and possible imprisonment for violations, emphasizing deterrence and compliance .
"Regulatory Enforcement" - The Registrar has authority to enforce penalties, including revocation of registration or licenses for non-compliance .
"Protection of Investors" - Strict penalties aim to safeguard investor interests by deterring fraudulent or non-compliant schemes [Cover Story].
"Management Accountability" - Management companies are responsible for maintaining proper records and segregated funds; failure results in penalties [Interest Schemes In Malaysia].
"Scope of Penalties" - Penalties cover a broad range of violations, including operational misconduct, misappropriation, or failure to comply with registration requirements [Interest Scheme Act 2016 - Overview].
"Legal Consequences" - Violators may face both criminal and civil liabilities, including fines and imprisonment, reinforcing the seriousness of compliance [Companies Act 2016].
"Enforcement Mechanism" - The Registrar and courts have the authority to impose penalties, ensuring effective enforcement of the Act [Introduction to the Interest Scheme Act 2016].
"Legal Framework" - Section 62 complements other provisions aimed at regulating interest schemes and protecting investors [Interest Schemes Act 2016].
"Deterrence" - The prescribed punishments serve as a deterrent against illegal schemes and violations of the Act's provisions [Interest Schemes In Malaysia].
"Legal Certainty" - Clear penalties provide legal certainty and reinforce compliance obligations for scheme operators [Interest Scheme Act 2016 - Overview].
"Penalties for Non-Registration" - Non-registration or operating without approval can lead to penalties under Section 62 [Real Estate (Regulation and Development) Act, 2016].
"Legal Recourse" - Victims or regulators can initiate proceedings against violators, ensuring enforcement of the law [Introduction to the Interest Scheme Act 2016].
"Purpose of Section 62" - To uphold the integrity of interest schemes by penalizing violations and maintaining public confidence [Governing Laws].
"Legal Responsibility" - Persons involved in interest schemes must adhere strictly to the Act; violations attract legal sanctions [Interest Schemes Act 2016].
"Legal Precedent" - Similar penalties have been upheld in related laws, indicating the seriousness of contraventions [Violation of Section 62(3) of Companies Act 2013].
Note: Due to the unavailability of the exact wording of Section 62, the analysis is based on related legal principles, general provisions, and context from the sources provided.
63 PART V WINDING UP OF SCHEMES-63. Winding up at direction of interest holders of an investment scheme.

(1) The interest holders of an investment scheme may call for a meeting to consider and vote on a resolution to direct the management company to wind up the scheme.

(2) The resolution shall be approved by at least seventy-five per centum of the interest holders of the scheme or a higher percentage as stated by the trust deed or contractual agreement.

64 PART V WINDING UP OF SCHEMES-64. Winding up in the event of accomplishment or non-accomplishment of the purpose of the scheme.

(1) If the management company considers that the purpose of the scheme has been accomplished or cannot be accomplished, the management company may take steps to wind up the scheme in accordance with this section.

(2) The management company shall send to the interest holders of the scheme, the Registrar and the trustee a notice in writing:

(a) explaining the proposal to wind up the scheme, including explaining how the scheme's purpose has been accomplished or why that purpose cannot be accomplished;

(b) informing the interest holders of their rights to call a meeting of interest holders to consider the proposed winding up of the scheme and to vote on the proposal to wind up the scheme; and

(c) informing the interest holders that the management company is permitted to wind up the scheme unless a meeting is called to consider the proposed winding up of the scheme within twenty-eight d
Legal Comments
"Section 64(5)(a) power grant" - Section 64(5)(a) expressly confers power on Joint Commissioner or Deputy Commissioner to modify or cancel schemes in force, including schemes deemed to have been settled by the Court under Section 118(2)(a); this includes schemes from older Acts (1927, 1951) and those deemed settled under the present Act - [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
"Scope of Section 64(5)(a)" - The provision covers schemes in force settled or modified by various authorities (Court, Board, Deputy/Joint Commissioner, Commissioner) including those deemed settled under 118(2)(a); the ambit includes schemes from pre-1959 legislation as saved by 118 and brought forward - [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
"Court-decreed schemes protected" - The approach rejects a view that Section 64(5) invalidly nullifies court decrees; instead, it continues the older schemes under the new Act, with empowered modification by designated authorities within prescribed limits - [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
"Constitutionality concern addressed" - Courts held Section 64(5) is not an attempt to nullify court orders; rather, it ensures continuity and transfer of modification power to successor statutory authorities upon repeal, subject to the prescribed conditions - [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
"Inclusion of schemes under 1951 Act" - The last clause of 64(5)(a) and reference to 118(2)(a) purposefully include schemes settled or deemed settled under the 1951 Act saved by 118, bringing them under the 1959 Act’s modification framework - [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
"Role of enquiry/notice in 64(1) proceedings" - Section 64(1) requires consultation with trustees and interested persons; framing of schemes follows a process mandating consultation and notice, with Framing of Schemes Rules guiding procedure - [R.lingaraj Vs Joint Commissioner, Tamil Nadu Hindu Religious And Charitable Endowment Department - 2025 Supreme(Online)(MAD) 15095], [R.lingaraj Vs Joint Commissioner, Tamil Nadu Hindu Religious And Charitable Endowment Department - 2025 Supreme(Online)(MAD) 15095].
"Limitation on Inspector vs statutory authorities" - Instances where an Inspector attempted scheme enquiries without statutory backing were struck down; authority to settle schemes lies with Joint Commissioner/Deputy Commissioner after proper consultation - [R.lingaraj Vs Joint Commissioner, Tamil Nadu Hindu Religious And Charitable Endowment Department - 2025 Supreme(Online)(MAD) 15095].
"Modification vs court decree in HR&CE" - For temples and endowments under HR&CE Act, modifications to court-settled schemes are permissible via 64(5) subject to the prescribed conditions; Court rulings affirm Deputy/Joint Commissioner’s jurisdiction to modify such schemes when prerequisites are met - [G. Balasubramaniya Iyer VS Durai Bubalan - 2023 0 Supreme(Mad) 3315], [P. M. Pandiarajan VS Commissioner, Hindu Religious and Charitable Endowments (Admn. ) Department - 2017 0 Supreme(Mad) 3965].
"Representation and due process" - Adequate representation of communities and women in temple administration is emphasized; modification of schemes must consider such representation and follow due process under 64(5) and related rules - [Thangamuthu Pillai VS The Commissioner Hindu Religious & Charitable Endowments - 2010 0 Supreme(Mad) 3259], [Sri Kailasanathaswami And Nithyakalyani Amman Devasthanam By Its Hereditary Trustees C. T. Al. V. R. Chidambaram Chettiar VS M. Chockalingam Chettiar - 1980 0 Supreme(Mad) 120].
"Court’s deference to statutory framework in schemes" - Indian courts repeatedly emphasize that schemes framed by courts historically can be modified under the current statute, provided the modification adheres to the statutory process and preserves the scheme’s基本 purpose - [ASHAPURA MINECHEM LTD. VS UNION OF INDIA - 2017 0 Supreme(Del) 3885], [P. Ezhumalai vs Secretary to Government, Tourism, Culture and Religious Endowments, Chennai - 2026 Supreme(Online)(Mad) 5778].
"Precedent: Thathachariar lineage" - Supreme Court authorities (e.g., T. Lakshmikumara Thathachariar) affirmed that schemes settled by Courts, including those under CPC or earlier Acts, can be modified under 64(5) with proper procedural compliance - [P. Ezhumalai vs Secretary to Government, Tourism, Culture and Religious Endowments, Chennai - 2026 Supreme(Online)(Mad) 5778], [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
"Deemed to be settled provisions" - The concept of “deemed to have been settled” under Section 118(2)(a) ensures continuity of old schemes as if settled under the present Act; this underpins jurisdiction to modify such schemes - [R.lingaraj Vs Joint Commissioner, Tamil Nadu Hindu Religious And Charitable Endowment Department - 2025 Supreme(Online)(MAD) 15095], [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
"Section 118 savings mechanism" - Section 118(2)(a) saves schemes, rules, orders, and actions from earlier Acts and deems them as having been settled by the corresponding authority under the 1959 Act; enabling 64(5) modification where appropriate - [R.lingaraj Vs Joint Commissioner, Tamil Nadu Hindu Religious And Charitable Endowment Department - 2025 Supreme(Online)(MAD) 15095], [P. M. Pandiarajan VS Commissioner, Hindu Religious and Charitable Endowments (Admn. ) Department - 2017 0 Supreme(Mad) 3965].
"Appointed date and retrospective effect in schemes" - In company schemes of arrangement/amalgamation, NCLT-sanctioned schemes may provide for revision of returns or adjustments retroactively; courts have recognized these as binding and enabling compliance with subsequent tax/regulatory steps - [00100003193], [Dalmia Power Limited, Represented by its Authorised Signatory R. Gururajan VS Assistant Commissioner of Income-Tax Circle 1 - 2019 0 Supreme(Mad) 486].
"Overriding effect of DTP schemes vs Master Plans (Kerala/2016 Act)" - Detailed Town Planning Schemes (DTP) prevail over Master Plans under Act 2016, with Section 113 preserving older schemes; courts admonish respecting DTP/Master Plan in permitting building permits - [P. A. Trading VS Government of Kerala - 2017 0 Supreme(Ker) 1328], [Thalassery Municipality VS Puthalath Balakrishnan - 2019 0 Supreme(Ker) 399], [V. Unnikrishnan VS Kozhikode Municipal Corporation - 2024 0 Supreme(Ker) 400].
"Karasamadhana Scheme – revisional prohibition after waiver" - Once benefits under Karasamadhana Scheme are granted, suo motu revisions post-waiver are impermissible; revisional power cannot defeat the scheme’s purpose - [G. C. Surana VS Assistant Commissioner of Income Tax - 1999 0 Supreme(Kar) 633], [A Company Incorporated Under The Provisions Of The Companies Act, 1956, Represented Herein By Its DGM Accounts And Finance (Taxation) Mr. Raghavendra N. vs Joint Commissioner Of Commercial Taxes (ADMN) DGSTO-1, Bengaluru - 2025 Supreme(Online)(Kar) 22290].
"Evidentiary standard for modification decisions" - When modifying schemes, authorities must demonstrate compliance with prescribed conditions and restrictions; lack of prescribed conditions can render a modification void - [Sri Kailasanathaswami And Nithyakalyani Amman Devasthanam By Its Hereditary Trustees C. T. Al. V. R. Chidambaram Chettiar VS M. Chockalingam Chettiar - 1980 0 Supreme(Mad) 120], [P. Ezhumalai vs Secretary to Government, Tourism, Culture and Religious Endowments, Chennai - 2026 Supreme(Online)(Mad) 5778].
"Public interest vs private interest in schemes" - Proportional balancing of public interest with private land/temple interests is a recurring theme; courts permit restrictions under schemes to protect public planning objectives (DTP, Master Plans) - [V. Unnikrishnan VS Kozhikode Municipal Corporation - 2024 0 Supreme(Ker) 400], [Thalassery Municipality VS Puthalath Balakrishnan - 2019 0 Supreme(Ker) 399].
"Net effect on rights when schemes are modified" - Modifications operate prospectively with respect to the scheme and its beneficiaries; retroactive effects require clear statutory basis and proper publication; non-compliance can nullify a modification - [P. Ezhumalai vs Secretary to Government, Tourism, Culture and Religious Endowments, Chennai - 2026 Supreme(Online)(Mad) 5778], [P. M. Pandiarajan VS Commissioner, Hindu Religious and Charitable Endowments (Admn. ) Department - 2017 0 Supreme(Mad) 3965].
"Vaccination of older decrees via 118 savings" - The 118 savings clause harmonizes reconstruction with older decrees; this is a critical instrument in allowing 64(5) to modify court-made schemes without nullifying judgments - [G. Balasubramaniya Iyer VS Durai Bubalan - 2023 0 Supreme(Mad) 3315], [R.lingaraj Vs Joint Commissioner, Tamil Nadu Hindu Religious And Charitable Endowment Department - 2025 Supreme(Online)(MAD) 15095].
"No automatic invalidation of decrees" - Courts reject the claim that 64(5) nullifies court decrees; modification is a controlled mechanism, not a general power to overturn decrees - [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135], [G. Balasubramaniya Iyer VS Durai Bubalan - 2023 0 Supreme(Mad) 3315].
"Practical guidance for practitioners" - When challenging or seeking modification, ensure: (a) applicability of 64(5) to the specific scheme; (b) fulfillment of conditions/restrictions under provisos; (c) compliance with Framing of Schemes Rules; (d) adequacy of representation; (e) notice and consultation steps; (f) recognition of saved schemes under 118(2)(a) - [R.lingaraj Vs Joint Commissioner, Tamil Nadu Hindu Religious And Charitable Endowment Department - 2025 Supreme(Online)(MAD) 15095], [Thangamuthu Pillai VS The Commissioner Hindu Religious & Charitable Endowments - 2010 0 Supreme(Mad) 3259], [Sri Kailasanathaswami And Nithyakalyani Amman Devasthanam By Its Hereditary Trustees C. T. Al. V. R. Chidambaram Chettiar VS M. Chockalingam Chettiar - 1980 0 Supreme(Mad) 120].
"Relief and remedies in modified schemes" - Courts have sanctioned varied reliefs in scheme-related disputes, including setting aside improper notices, directing modification/cancellation under 64(5), and allowing timelines and procedural adjustments to align with scheme provisions - [P. M. Pandiarajan VS Commissioner, Hindu Religious and Charitable Endowments (Admn. ) Department - 2017 0 Supreme(Mad) 3965], [G. Balasubramaniya Iyer VS Durai Bubalan - 2023 0 Supreme(Mad) 3315].
"Judicial approach to multiple regimes" - The body of decisions demonstrates a consistent approach: respect the hierarchical legislative evolution, apply 64(5) with its conditions, and preserve the integrity of schemes settled by Courts while enabling necessary modernization - [P. Ezhumalai vs Secretary to Government, Tourism, Culture and Religious Endowments, Chennai - 2026 Supreme(Online)(Mad) 5778], [T. Lakshmikumara Thathachariar VS Commissioner, Hindu Religious And Charitable Endowments - 1998 7 Supreme 135].
65 PART V WINDING UP OF SCHEMES-65. Winding up ordered by Court.

(1) An application to wind up the scheme may be made to the Court by:

(a) the management company;

(b) the trustees;

(c) a director of the management company;

(d) an interest holder of the scheme; or

(e) the Registrar.

(2) The Court may order the management company of a scheme to wind up the scheme if:

(a) the Court thinks it is just and equitable to do so; or

(b) within six months before the application to the Court was made, execution or other process was issued on a judgement, decree or order obtained in a Court, whether in Malaysia or not, in favour of a creditor of, and against, the management company in its capacity in relation to the scheme and the execution or process has been returned unsatisfied.

(3) An order under paragraph (2) (b) may be made on th
66 PART V WINDING UP OF SCHEMES-66. Duties of management company in winding up of a scheme.

(1) The management company shall ensure that the scheme is wound up in accordance with its trust deed or contractual agreement and any order under subsection 67(2):

(a) on the occurrence of the specified circumstances or events referred to in section 62;

(b) if a special resolution has been passed under section 63; or

(c) if the Court makes an order under section 65.

(2) An interest shall not be issued by a management company once the circumstance under subsection (1) arises.

(3) The management company and every officer who contravene this section commit an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit and in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.

67 PART V WINDING UP OF SCHEMES-67. Ancillary orders.

(1) An application for an order under subsection (2) for the winding up of a scheme may be made to the Court by:

(a) the management company;

(b) the trustees;

(c) a director of the management company;

(d) an interest holder of the scheme; or

(e) the Registrar.

(2) Upon an application made under this section, the Court may:

(a) appoint a qualified person to take responsibility for ensuring a registered scheme is wound up in accordance with its trust deed or contractual agreement and any order including for the reason that the management company has ceased to exist or is not properly discharging its obligations in relation to the winding up; or

(b) give directions on how a scheme is to be wound up, including for the reason that the provisions in the trust deed or contractual agreement are i
68 PART V WINDING UP OF SCHEMES-68. Unclaimed money to be paid to Registrar.

(1) If, on the completion of the winding up of a registered scheme, the management company or person appointed under section 67 has in their possession or under their control any unclaimed or undistributed money or other property that was part of the property of the scheme, the management company or the person shall, as soon as practicable, surrender the money or transfer the property to the Registrar.

(2) The provisions under Subdivision 2 of Division 4 of Part IV of the Companies Act 2016 shall be applicable in dealing with the money or property so vested with the Registrar with the necessary modifications and adaptations.

69 PART V WINDING UP OF SCHEMES-69. Voluntary deregistration.

(1) The management company of a registered scheme may lodge an application for deregistration of the scheme with the Registrar.

(2) The management company may only apply for deregistration if the scheme did not meet the minimum requirement of the interest holders as specified in the prospectus or product disclosure statement and all the interest holders agree that the scheme shall be deregistered.

(3) If the Registrar is satisfied that the application complies with subsection (2), the Registrar shall publish the notice of the proposed deregistration in the website of the Commission and a copy of the notice shall be given to the management company and the trustees.

(4) After the lapse of seven days from the date of the publication of the notice on the website, the Registrar shall deregister the scheme and the scheme shall be deemed to have been dissolved.

70 PART VI ENFORCEMENT OF THE ACT-70. Injunction.

(1) Where a person has engaged, is engaging or intends to engage in a conduct that constituted, constitutes or would constitute:

(a) a contravention of this Act;

(b) an attempt to contravene this Act;

(c) an attempt that aids, abets, advises or procures a person to contravene this Act;

(d) an attempt to induce, whether by threats, promises or otherwise, a person to contravene this Act;

(e) an attempt by which any person would be in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or

(f) an attempt of conspiracy with others to contravene this Act,

the Court may, on the application of the Registrar, or of a person whose interests have been, are or would be affected by the conduct, grant an injunction, on such terms as the Court thinks appropriate, restraini
71 PART VI ENFORCEMENT OF THE ACT-71. Power of Registrar to intervene.

(1) Notwithstanding anything in this Act, the Registrar shall have the power to intervene in the management of a scheme when he is satisfied that:

(a) the scheme is unable to meet its obligation when they fall due;

(b) the operation, management or administration of the scheme has not been conducted in accordance with the trust deed, supplemental trust deed, contractual agreement or supplemental contractual agreement; or

(c) the terms and conditions for the authorization of a scheme imposed by the Registrar have not been complied with.

(2) In exercising the power under subsection (1), the Registrar may make one or more of the following:

(a) order the management company to cease the issue or offer of the interests to the public until further notice;

(b) require the auditor of the scheme to carry out an audit on the scheme a
72 PART VI ENFORCEMENT OF THE ACT-72. Power of Registrar to terminate unregistered scheme.

(1) The Registrar shall have the power to terminate an unregistered scheme and may make one or more of the following:

(a) direct any person to compensate any person who have purchased any interest in the scheme;

(b) restrain any person from carrying on any of the following activities:

(i) promote any interest in the scheme to the public;

(ii) deal or generate interest in its products or offering of products;

(iii) print, publish or distribute or cause to be printed, published or distributed, written materials promoting interest in the schemes;

(iv) make any recommendation, or offer advice, whether orally or in writing, to any person in relation to a product or a decision by a person regarding whether or not to invest in a product;

(v) induce, solicit, collect or receive money from a person in relation to the scheme; or

(c)
73 PART VI ENFORCEMENT OF THE ACT-73. Power to exempt from compliance with the Act.

(1) The Minister may, by notice published in the Gazette , exempt any company or class of companies or any person or class of persons from complying with all or any of the provisions of this Act in relation to any interest or class of interests specified in the notice.

(2) The notice in subsection (1) may provide that an exemption may be subject to the terms and conditions specified in the notice.

(3) The company and every officer who contravene any term or condition specified in the notice of exemption commit an offence.

74 PART VI ENFORCEMENT OF THE ACT-74. Protection to certain officers who make disclosures.

(1) Where an officer of a management company in the course of performance of his duties has reason to believe that:

(a) any matter which may or will constitute a breach or non-observance of the provisions of this Act or the subsidiary legislation made under this Act; or

(b) a serious offence involving fraud or dishonesty, has been, is being or is likely to be committed against this Act or the management company or by other officer of the management company,

he may report the matter in writing to the Registrar.

(2) The management company shall not remove, demote, discriminate against, or interfere with the lawful employment or livelihood of any officer by reason of the report submitted by him under subsection (1).

(3) No officer of a management company shall be liable to be sued in any Court nor be subject to any tribunal process, including disciplinary action for any r
75 PART VI ENFORCEMENT OF THE ACT-75. General penalty.

(1) A person commits an offence if he:

(a) does any act that he is prohibited to do under this Act;

(b) omits to do any act that he is required or directed to do under this Act; or

(c) otherwise contravenes or fails to comply with any provision of this Act.

(2) A person who commits an offence under this Act shall, on conviction, be liable to a penalty or punishment not exceeding the penalty or punishment expressly mentioned as the penalty or punishment for the offence, or if a penalty or punishment is not mentioned:

(a) in the case of a person who is an individual, to a penalty not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both; or

(b) in the case of a person other than an individual, to a penalty not exceeding fifty thousand ringgit.

(3) For the p
76 PART VII ADMINISTRATION OF THE ACT-76. Register of interest holders.

(1) A management company shall, in respect of each trust deed or contractual agreement with which the management company is concerned, keep a register of the interest holders and enter in the register:

(a) the names and addresses of the interest holders;

(b) the extent of the holding of each interest holder and, if his interest consists of a specific interest in any property, a description of the property and its location is sufficient to identify it;

(c) on the date the name of each person was entered in the register as a holder;

(d) the date at which any person ceased to be a holder; and

(e) any other information as the Registrar thinks necessary.

(2) A management company may keep and maintain the register of interest holders at a place other than at its registered office but shall notify the Registrar of that fact.

77 PART VII ADMINISTRATION OF THE ACT-77. Duty to lodge returns, statements, etc .

(1) Where a trust deed or contractual agreement is or has at any time been an approved trust deed or contractual agreement and remains in force, the management company shall, within two months after the end of each financial year applicable to the scheme, lodge with the Registrar:

(a) a return containing a list of all persons who, at the end of the financial year, were interest holders to which the trust deed or contractual agreement relates, showing the name and address of each interest holder and the extent of his holding and, if his interest consists of a specific interest in any property, a description of the property and its location sufficient to identify it;

(b) a summary of:

(i) all purchases and sales of property and marketable securities affecting the interests of the interest holders during the financial year; and

(ii) all other investments affecting the interests of
78 PART VII ADMINISTRATION OF THE ACT-78. Documents to be kept at registered office.

(1) A management company shall keep at its registered office:

(a) all trust deeds or contractual agreements;

(b) all prospectuses or product disclosure statements;

(c) all certificates issued under this Act;

(d) all registers, statutory books, records and documents as required under this Act;

(e) all minutes of all meetings and resolutions of interest holders;

(f) the copies of all written communications to all interest holders or all holders of the same class of shares;

(g) the copies of all financial statements of the scheme; and

(h) the accounting records of the scheme required under section 51.

(2) The documents referred to in subsection (1) shall be kept at the registered office for a period of at least seven years, unless otherwise stated in the other provisions of this Act.

79 PART VII ADMINISTRATION OF THE ACT-79. Forms of documents, use of computer and other means for recording documents.

(1) The documents and records of a management company referred to in section 77 shall be:

(a) in written form; or

(b) in a form or manner, electronic or otherwise, that allows the documents and information to be easily accessible and reproduced into written form.

(2) A management company shall take reasonable precautions to prevent documents and records kept in the form referred to in subsection (1) from being falsified.

(3) If a management company discovers that a document or record has been falsified, the management company shall inform the Registrar, and the Registrar shall have the power to direct the management company to:

(a) amend, rectify or vary the document or record as may be necessary; or

(b) take any other actions as the Registrar thinks fit.

(4) The management company and every officer who contr
80 PART VII ADMINISTRATION OF THE ACT-80. Inspection of registers and documents at registered office.

(1) Any register or document that is required to be made available for inspection under this Act, shall be made available for inspection to any person authorized under this Act to inspect such register or document at the registered office of a management company or any other place allowed by this Act.

(2) Any person authorized under this Act to inspect the register or document shall be allowed to make copies or take the documents or part of the document, or take extracts from the documents.

(3) A management company shall provide proper facilities to enable the documents to be inspected.

(4) The management company and every officer who contravene this section commit an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.

81 PART VII ADMINISTRATION OF THE ACT-81. Registers and inspection of documents lodged with Registrar.

(1) The Registrar shall, subject to this Act, keep such registers as he thinks necessary in such forms as he thinks fit.

(2) Any person may, on payment of the prescribed fee:

(a) inspect any document filed or lodged with the Registrar;

(b) request for a certificate of the authorization of a scheme or any other certificate issued under this Act; or

(c) request for a copy of or extract from any document that he is entitled to inspect under paragraph (a) or any certificate referred to in paragraph (b) to be given and certified by the Registrar.

82 PART VII ADMINISTRATION OF THE ACT-82. False and misleading statements.

(1) Every management company which advertises, circulates or publishes any return, report, certificate, financial statement or other document required by or for the purposes of this Act makes or authorizes the making of a statement false or misleading in any material particular knowing it to be false or misleading or intentionally omits or authorizes the omission or accession of any matter or thing thereby making the document misleading in a material respect and every officer of the management company who knowingly authorizes, directs or consents to the advertising, circulation or publication commits an offence and shall, on conviction:

(a) in the case of a management company, be liable to a fine not exceeding three million ringgit; and

(b) in the case of officer of the management company, be liable to imprisonment for a term not exceeding ten years or a fine not exceeding three million ringgit or to both.
83 PART VII ADMINISTRATION OF THE ACT-83. Evidentiary value of copies certified by Registrar.

(1) A copy of or an extract from any document lodged or filed with the Registrar, certified to be a true copy or extract under the hand and seal of the Registrar shall in any proceedings be admissible in evidence as of equal validity with the original document.

(2) The reference in subsection (1) to a document includes, where a reproduction of that document has been incorporated with a register kept by the Registrar, a reference to the reproduction of the document.

84 PART VII ADMINISTRATION OF THE ACT-84. Evidence of statutory requirements.

In any legal proceedings, if the Registrar certifies that:

(a) no scheme was registered under this Act or corresponding previous written law at a date or during a period specified in the certification, the certification shall be received as prima facie evidence that under the name of the scheme and at the date or during that period, that scheme was not registered; and

(b) the requirement of this Act or corresponding previous written law as specified in the certification:

(i) has or has not been complied with at a date or within a period specified in the certification; or

(ii) has been complied with at a date specified in the certification but not before that date,

the certification shall be received as prima facie evidence of matters specified in the certification.

85 PART VII ADMINISTRATION OF THE ACT-85. Rectification of registers.

(1) A person may apply to the Registrar for the rectification of a register if an entry in the register:

(a) contains matter contrary to law;

(b) contains matter that, in a material particular, is false or misleading in the form or context in which the matter is included;

(c) by reason of an omission or misdescription has not been duly completed; or

(d) is incorrect or erroneous.

(2) Upon receipt of the application under subsection (1), in order for the Registrar to decide whether to approve or refuse the application, the Registrar may:

(a) require the applicant to produce any document or to furnish the Registrar with any information as the Registrar thinks necessary in order for the Registrar to rectify the entry; or

(b) require the applicant to give notice of that application to such other person as the
86 PART VII ADMINISTRATION OF THE ACT-86. Electronic lodgement of documents.

(1) The Registrar may provide a service for the electronic lodgement of documents required by this Act to be lodged with the Registrar.

(2) A document electronically lodged under this section shall be deemed to have satisfied the requirement for lodgement if the document is communicated or transmitted to the Registrar in such manner as may be determined by the Registrar.

(3) A document that is required to be stamped, signed or sealed shall, if the document is to be electronically lodged, be certified to be true copy or authenticated in such manner as may be determined by the Registrar.

(4) Where a document is electronically lodged with the Registrar, the Registrar shall not be liable for any loss or damage suffered by any person by reason of any error or omission of whatever nature or however arising appearing in any document obtained by any person under the service referred to in subsection (1) if such error or omission occurre
87 PART VII ADMINISTRATION OF THE ACT-87. Issue of document electronically.

The Registrar may, by electronic means, issue a document which is to be issued by the Registrar under this Act.

88 PART VII ADMINISTRATION OF THE ACT-88. Electronic information, document, etc , certified by Registrar admissible in evidence.

Any information, document or any copy of or any extract from any document electronically lodged with the Registrar under this Act, issued by the Registrar shall be a true copy or extract from any documents lodged with or submitted to the Registrar under section 86 or issued by the Registrar under section 87 shall, in any proceedings, be admissible as prima facie evidence of matters specified in that information, document, copy or extract.

89 PART VII ADMINISTRATION OF THE ACT-89. Power to amend Schedules.

The Minister may, by order published in the Gazette , amend the Schedules.

90 PART VII ADMINISTRATION OF THE ACT-90. Regulations.

(1) The Minister may make regulations as may be expedient or necessary for the better carrying out of the objects and purposes of this Act.

(2) Without limiting the generality of subsection (1), regulations may be made for all or any of the following purposes:

(a) prescribing the establishment and administration of compensation fund for the purposes of interest schemes registered under this Act and the manner the compensation fund is to be applied;

(b) prescribing the lodgement or registration of documents and the time and manner of submission of documents for lodgement or registration;

(c) prescribing the fees to be paid to the Registrar in respect of any document required to be lodged, filed and registered with or issued by the Registrar under this Act or any act required to be performed by the Registrar or for the inspection of any such document;

(d) prescribing
91 PART VII ADMINISTRATION OF THE ACT-91. Power to declare interests to be regulated under the securities laws.

(1) The Minister charged with the responsibility for finance may request the Minister to declare that certain interests or class of interests is more appropriately regulated under securities laws as defined in the Securities Commission Act 1993 [Act 498] .

(2) The Minister may, after consultation with the Minister charged with the responsibility for finance, make regulations for the purposes of a declaration under subsection (1).

92 PART VII ADMINISTRATION OF THE ACT-92. Saving and transitional.

(1) On the commencement of this Act, any recognized scheme shall be deemed to have been registered as a premium scheme under this Act.

(2) Any condition or restriction imposed by the Registrar or the Minister, as the case may be, on any recognized scheme and in force immediately before the commencement of this Act shall be deemed to be a condition or restriction to which the approval for registration under this Act is subject to.

(3) Any approvals, directions, decisions, notifications, exemptions and other executive acts, howsoever called, given, made or done under, in accordance with or by virtue of the corresponding provisions of this Act shall continue to remain in effect in relation to the persons to whom the approvals, directions, decisions, notifications, exemptions and executive acts applied until amended, repealed, rescinded, revoked, replaced or varied under, in accordance with or by virtue of the corresponding provisions of th