This Technical Note clarifies the following:

1. Subsection 57B(1) under Subdivision 7, Division 2 of Part II of the Capital Markets and Services Act 2007 (CMSA) sets out that the rights of the parties under the netting provision of a qualified capital market agreement are preserved in the event that there is a commencement of any other proceeding which has the effect of assuming control or managing the business, affairs and properties of a party.
2. In this regard, a qualified capital market agreement is defined under section 57A of the CMSA as follows:
   
   

   “qualified capital market agreement” means–
   (a)	an agreement with a netting provision, in respect of one or more securities borrowing and lending transactions; or
   (b)	an agreement specified by the Commission to be a qualified capital market agreement for the purposes of this Part;’

   
   

3. As such, this would allow parties to the qualified capital market agreement to net their financial obligations with counterparties pursuant to the qualified capital market agreement, even if there is an ongoing proceeding. 
4. The SC wishes to clarify that for the purposes of paragraph 57A(a) of the CMSA in relation to “qualified capital market agreement”, it applies to securities borrowing and lending (SBL) transactions entered into within or outside Malaysia. This will also include SBL agreements involving securities outside Malaysia entered into with a Malaysian counterparty.
5. Set against the above, netting provisions relating to such SBL transactions may be enforced without being limited, restricted or otherwise affected by a provision in the securities law or in any other written law.