AOO Framework Allows Non-Resident Traders/Investors Greater Anenue To Settle Ringgit Transactions

KUALA LUMPUR, Dec 7 (Bernama) -- The Appointed Overseas Office (AOO) Framework announced by the Financial Markets Committee (FMC) is now expanded to allow non-resident traders and investors greater avenue to settle trade or investment in Malaysian ringgit through an approved channel. The FMC is a committee established by Bank Negara Malaysia (BNM or Malaysia's Central Bank). In a statement Tuesday, BNM said, the expanded framework included non-resident financial institution outside the licensed onshore bank's banking group. "This framework, which was first introduced in 2007, now includes additional transactions such as foreign exchange hedging (own account/on behalf of client) for current and financial account based on commitment, opening of ringgit account (book-keeping) and extension of ringgit trade financing," BNM said. BNM said this framework was intended to provide additional flexibilities on ringgit transactions where a non-resident financial institution appointed by a licensed onshore bank could undertake back-to-back transactions to facilitate settlement of trade and ringgit assets between non-resident and a resident. This annoucement followed the Dec 2 measures announced by FMC on the initiatives to develop the onshore financial market. AOO refers to an appointed overseas parent company, subsidiary company, sister company, head office or branch of a licensed onshore bank's banking group, excluding a licensed international Islamic Bank. --BERNAMA