Kuala Lumpur, 19 June 2006: Perbadanan Insurans Deposit Malaysia (PIDM) today invites the public to give feedback on its first consultation paper on proposed regulations that could affect deposit insurance coverage on their trust accounts and joint accounts.
The Consultation Paper on Disclosure Requirements For Trust Accounts and Joint Accounts Regulations 2006 highlights that beneficiaries can enjoy separate deposit insurance coverage of up to RM60,000 in trust accounts held in member institutions (all licensed commercial and Islamic banks) if the trustee submits information that identifies each beneficiary and the interest of each beneficiary in the trust account.
Similarly, joint account owners will be separately insured from accounts held with other persons if they submit relevant information at the time of opening the joint account in order for member institutions to distinguish those accounts.
Chief Executive Officer Jean Pierre Sabourin said this consultation paper is part of PIDM’s plan to promote transparency by actively engaging the public in its policy making process to ensure that relevant parties have been consulted.
“As the independent statutory body administering the national deposit insurance system, PIDM is seeking feedback from the public on the scope of the draft Regulations and compliance issues that may arise before the Regulations are approved,” Sabourin said.
The consultation paper and draft Regulations are available for public viewing on PIDM’s website (http://www.pidm.gov.my). Member institutions and the public are invited to submit written comments to PIDM by 31 July 2006.
PIDM will publish its response to comments received on the draft Regulations on its website by 30 September 2006. The Regulations are subject to the approval of the Minister of Finance.
The Regulations will apply to trust accounts in which the trustee can identify the beneficiaries and their respective interests in the deposits. Examples are client accounts operated by lawyers and stockbrokers as well as accounts maintained by an adult on behalf of minors.
The Regulations would not apply to trustees holding deposits on behalf of unit trust funds as such deposits are usually pooled and therefore, are not attributable to specific beneficiaries.
“However, for those trustees who can identify the beneficiaries and their respective interests in the trust deposit accounts, then separate coverage for each beneficiary is available,” Sabourin added.
In order to enjoy separate coverage, trustees would be required to disclose information on all beneficiaries and their interests in the deposit at the time of opening the trust account and are required to update the information as at 31 December for submission by 31 March of the following year.
Joint account owners must submit their relevant identification information when opening a joint account in order to be insured separately. They are not required to submit updated information annually.
All submissions should be made to the branches of member institutions where the accounts are held and not to PIDM, according to Sabourin.
In cases where trustees are unable to disclose names of beneficiaries, arising from legal provision or client confidentiality, they may submit the information in the form of an alphanumeric code or any other identifier.
For convenience and efficiency, trust account holders are expected to only submit minimum updated information in any readily available format, so long as it satisfies the disclosure requirements.
“The good news is that beneficiaries don’t have to come forth to disclose their account information but they may wish to ensure that their trustee has made appropriate disclosure to the member institution,” Sabourin said.
The proposed Regulations follow an earlier set of Guidelines on disclosure requirements for such accounts issued by PIDM on 27 March 2006. The Regulations, when gazetted, will supersede the Guidelines.
Click to download the Consultation Paper in pdf format (File size: 115 kb)
PIDM protects your deposits in the bank as well as your takaful and insurance benefits in the unlikely event of a failure of a member bank or a takaful operator / insurance company.