Finance Minister Erica Shafudah says the Financial Institutions and Market Act (FIMA) will deliver meaningful benefits across all segments of society. 

The act aims to strengthen consumer protection, promote financial inclusion and enhance regulatory oversight, among other things.

Speaking in the National Assembly on Tuesday, Shafuda said the act represents the culmination of nearly two decades of policy development, legislative reform, stakeholder engagement, and institutional preparation. She emphasised that the act provides stronger protection of financial interests, particularly for policyholders, pension fund members, consumers and investors.

"FIMA provides greater regulatory criteria and certainty, which is essential for investment, innovation, and long-term planning. It enhances confidence in the integrity of financial markets and supports the development of a more dynamic and competitive financial sector. For the government and the broader economy, FIMA contributes to financial stability, reduces systematic risks, and supports sound economic planning."

The minister revealed that the proposed preservation regulation has not been brought into operation and has been placed on hold pending further refinement and broader stakeholder consultations.

She also reassured retirement fund members that the current retirement benefit provisions remain unchanged.

"The existing provisions under the income tax of 1981, including the entitlement to commute up to one-third of benefits from pension funds, retirement annuity funds, and preservation funds, are a cash lump sum, as well as the entitlement to receive up to 100% of benefits from providing these funds. As a lump sum, these ones continue to apply."

The FIMA officially came into operation on the 1st of May this year to consolidate and modernise the regulation of the non-banking sector.