Foreign investment in banking, insurance and other financial services sector is subject to discriminatory approval criteria (i.e. approval takes into consideration the degree and significance of participation of Malaysians in the financial sector). 
"PART III – CAPITAL MARKETS SERVICES
Division 1 – Licensing and regulation 
Requirement for Capital Markets Services Licence
58. (1) No person shall whether as a principal or agent, carry on a business in any regulated activity or hold himself out as carrying on such business unless he is the holder of a Capital Markets Services Licence or is a registered person; 
[...]
Registered persons
76. (1) A person is a registered person for the purposes of subsection 58(1) where such person is– (a) specified to be a registered person in Schedule 4; [...]
(5) In respect of registered persons referred to in paragraph 1(a) as specified in the third column of Part 1 of Schedule 4, the registered person shall comply with any guideline issued by the Commission under section 377 in respect of the carrying on of the particular regulated activity by the registered person.
[...]
SCHEDULE 4 [Paragraph 76(1)(a)]
Registered persons - Part 1
Second Column / Activities: 1. Dealing in securities [various activities]; 2. Advising on corporate finance [various activities]; 3. Investment advice [various activities]; 4. Fund Management [various activities]; 5. Dealing in derivatives [various activities]; 6. Dealing in private retirement schemes.
Third Column / Categories of Registered Persons: Islamic banks and all licensed institutions (e.g.licensed banks, KAF Investment Bank Berhad, licensed finance companies, insurance companies and takaful operators)."(Capital Markets and Services Act  2007 [Act 671]).
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"Chapter 1  - INTRODUCTION
1.01 The Capital Markets and Services Act 2007 (CMSA) repeals the Securities Industry Act 1983 (SIA) and the Futures Industry Act 1993 (FIA). The CMSA, which takes effect on 28 September 2007, introduces a single licensing regime for capital market intermediaries. Under this regime, a capital market intermediary will only need one licence to carry on the business in any one or more regulated activities. This will mean less cost and paperwork for capital market intermediaries that carry on more than one regulated activity.
[...]
2.02 What are regulated activities?  
(1) There are eight types of regulated activities under the CMSA. The list of regulated activities is set out in Schedule 2 of the CMSA. They are– • dealing in securities; • dealing in derivatives; • clearing for securities or derivatives; • fund management; • dealing in private retirement schemes; • advising on corporate finance; • investment advice; and • financial planning.  
(2) The licence issued under the CMSA will set out the specific regulated activities that you can conduct. 
[...]
Chapter 4 -  LICENSING CRITERIA [...]
In authorising any person wishing to undertake capital market activities6, the SC will not grant authorisation unless the application is in the best interest of Malaysia. In determining the best interest of Malaysia, the SC will give regard to any one or more of the following: [...] (e) The degree and significance of participation of Malaysians in the capital market [...]" (Securities Commission (2023), Licensing Handbook, April 14)
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"PART III - AUTHORIZATION AND REGISTRATION
Division 1 - Authorized business
[Authorized business to be carried on by authorized person]: 
8. (1) No person shall carry on any authorized business unless it is— (a) licensed by the Minister, on the recommendation of the Bank, under section 10 to carry on banking business, insurance business or investment banking business; or (b) approved by the Bank under section 11 to carry on any of the businesses set out in Division 1 of Part 1 of Schedule 1. 
(2) Paragraph (1)(b) shall not apply, in respect of financial advisory business, to persons set out in Division 2 of Part 1 of Schedule 1.
[...]
[Grant of licence by Minister] 
10. (1) In assessing an application duly made under section 9 to carry on any licensed business, the Bank shall have regard to all the factors set out in part 1 and Part 2 of Schedule 5 and such other matters that the Bank considers relevant. [...]
[Approval by Bank] 
11. (1) In assessing an application duly made under section 9 to carry on any approved business, the Bank shall have regard to all the factors set out in Part 1 of Schedule 5 and such other matters that the Bank considers relevant.
[...] 
Form of establishment
24.(1)   A person who is to be licensed under section 10 to carry on banking business, insurance business (other than a person who is to be a professional reinsurer) or investment banking business shall be a public company.   (2)   The Bank may specify the form of establishment of— (a) a person who is to be licensed as a professional reinsurer; or (b) a person who is to be approved under section 11 to carry on an approved business. 
[...]
PART VI - OWNERSHIP, CONTROL AND TRANSFER OF BUSINESS [...]
[Acquisition of interest in shares requiring approval]
87. (1) Subject to section 92 and except with the prior written approval of the Bank, no person—  (a) shall enter into an agreement or arrangement, to acquire any interest in shares of a licensed person by which, if the agreement or arrangement is carried out, he would hold (together with any interest in shares of that licensed person which are already held by such person) an aggregate interest of five per cent or more in the shares of the licensed person [...];
(2) Notwithstanding subsection (1), no person shall enter into an agreement or arrangement to acquire any interest in shares of a licensed person by which, if the agreement or arrangement is carried out, he would hold (together with any interest in shares of that licensed person which are already held by such person) an aggregate of more than fifty per cent of the interest in shares of the licensed person, without obtaining the prior written approval of the Minister, on the recommendation of the Bank.
[...]
[Application procedures for section 87, 88 or 89]
90. (1) An application for an approval of— (a) the Bank under subsection 87(1); or (b) the Minister under subsection 87(2) or 88(1), or section 89, as the case may be, shall be made by submitting the application to the Bank together with such documents or information as may be specified by the Bank.
(2) In assessing the suitability of an applicant for the purposes of— (a) granting an approval of the Bank under subsection 87(1); or (b) recommending to the Minister under subsection 87(2) or 88 (1), the Bank shall take into consideration matters that the Bank considers relevant including any of the factors set out in Schedule 6, and any standards as may be specified by the Bank under subsection 91(1). 
[...]
[Power of bank to specify standards on shareholder suitability]
91. (1) The Bank may specify standards on shareholder suitability to give full effect to Schedule 6.
(2) Any person who has obtained the approval of the Bank under paragraph 90(3)(a) or the Minister under subsection 90(6) in respect of subsection 87(2) or 88(1), shall at all times comply with the standards as may be specified under subsection (1) to the satisfaction of the Bank 
[...]
PART XIV - OTHER POWERS OF BANK  
Division 1 - Regulation of prescribed financial institutions 
Interpretation 
211.  For the purposes of this Division, “financial intermediation activities” includes— (a) the accepting of deposits; (b) the giving of any advance, loan or other facility in whatever form or by whatever name called; (c) leasing business; (d) factoring business; (e) the purchase of bills of exchange, promissory notes, certificates of deposit, debentures or other negotiable instruments; (f) the acceptance of, or the giving of any guarantee in relation to, liability, obligation or duty of any person; (g) hire-purchase, including hire-purchase transactions pursuant to the Hire-Purchase Act 1967; (h) acquiring rights or interests in a hire-purchase, leasing or other similar transaction; (i) any activity that is incidental, ancillary or otherwise facilitates or is closely related to the activities referred to in paragraphs (a) to (h) above; and (j) such other business or activity as prescribed under section 3. 
[...]
SCHEDULE 1 [Subsection 2(1), sections 8, 33, 35, 36, 156 and 278] - APPROVED AND REGISTERED BUSINESSES 
PART 1 - Approved business
Division 1 - Businesses which require approval:
1. Operation of a payment system which— (a) enables the transfer of funds from one banking account to another, which includes any debit transfer, credit transfer or standing instructions but does not include the operation of a remittance system approved under section 40 of the Money Services Business Act 2011; or (b) provides payment instrument network operation which enables payments to be made through the use of a payment instrument; 2. Issuance of a designated payment instrument; 3. Insurance broking business; 4. Money-broking business; 5. Financial advisory business; 
Division 2 - Persons who do not require approval for financial advisory business:
6. A licensed person or an approved insurance broker under this Act; 7. An insurance agent; 8. A company registered under the Trust Companies Act 1949 [Act 100].
PART 2 - Registered business
9. Merchant acquiring services; 10. Adjusting business.
[...]
SCHEDULE 5 [Sections 10 and 11] - FACTORS FOR CONSIDERATION IN ASSESSING APPLICATION FOR LICENCE UNDER SECTION 10 OR APPROVAL UNDER SECTION 11 
PART 1 [...] 7. Whether the application will be in the best interest of Malaysia, having regard to— [...] (d) the degree and significance of participation of Malaysians in the financial sector. 
[...]
SCHEDULE 6 [Subsections 90(2), 91(1) and 112(2)] - FACTORS FOR CONSIDERATION IN ASSESSING SHAREHOLDER SUITABILITY
[...] 6. Whether the application will be in the best interest of Malaysia, having regard to— (d) the degree and significance of participation of Malaysians in the financial sector. [..]" (Financial Services Act 2013 [Act 758])
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"Applicable to:  1. Shareholders of approved insurance broker 2. Shareholders of approved takaful broker 3. Shareholders of approved money broker 4. Shareholders of approved financial adviser 5. Shareholders of approved Islamic financial adviser 
[...]
7 Application procedures 
G 7.1 Where an application is received pursuant to section 97(2) FSA or section 109(2) IFSA, the Bank will take into consideration the following factors in assessing the applicant’s suitability to be a shareholder of an approved person: [...]
(e) whether the application will be in the best interest of Malaysia, having regard to— [...] (iv) the degree and significance of participation of Malaysians in the financial sector. [...]" (Bank Negara Malaysia (2019), Shareholder Suitability - Notification and Application Procedures, June 3)
Capital Markets and Services Act  2007 [Act 671]
Securities Commission (2023), Licensing Handbook, April 14
Financial Services Act 2013 [Act 758]
Bank Negara Malaysia (2019), Shareholder Suitability - Notification and Application Procedures, June 3
[<a href="https://www.sc.com.my/api/documentms/download.ashx?id=2093f82c-7929-47e8-9279-f88e3b85dbbf">Act</a>],[<a href="https://www.sc.com.my/api/documentms/download.ashx?id=2bb1b664-aa03-425e-9472-9cc5b1558ed1">Handbook</a>],[<a href="https://www.bnm.gov.my/documents/20124///35ed2b4c-1995-f91d-3891-75d69d247d55">Act</a>],[<a href="https://www.bnm.gov.my/documents/20124/761679/2019-05-30+Shareholder+Suitability+-+Notification+Application+Procedures+%28final%29.pdf/84e805e5-e32a-fed6-f30d-c8ec3c84752d?t=1590726735235">Guidelines</a>]