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The submission should include, but is not restricted to, the following:
- A letter of undertaking from the head office / parent company to undertake any liability arising from the operations of its branch or subsidiary in Labuan.
- The controller, director or chief executive officer and the board of directors of the applicant company must be fit and proper persons. Prior written approval of the appointment must be obtained from Labuan FSA.
- A business plan detailing the operations and strategies of the applicant.
- Audited financial statements for the last two years, if applicable.
- Any other information that is relevant to the application.
The applicant company:
- Maintain a paid-up capital unimpaired by losses of at least RM500,000 or its equivalent in any foreign currency. Labuan FSA may also exercise its discretion to require additional capital to commensurate with the business operations of the Labuan money brokers, taking into account the risk profile as well as nature, scale, complexity and diversity of their business activities.
- Maintain an operational office in Labuan. The operational office should be used for business purposes only and must be appropriately furnished with office equipment.
- Ensure that the persons in controls, directors and principal officer meet the fit and proper person requirements as specified in the Guidelines on Fit and Proper Requirements issued by Labuan FSA. It is expected that the employees employed to transact in the money broking business are competent and possess sound knowledge of the services offered.
- Ensure that the counterparties, i.e. principal broker and liquidity provider are regulated by a recognised supervisory or regulatory authority.
- Labuan money broking business is intended to serve the institutional investors and high-net worth individuals. In this regard, the Labuan money broker is expected to impose a maximum leverage limit of 100:1 on its clients’ trading transactions that would translate to a minimum of 1% margin deposit to enable the opening of a trade position. For illustration purpose, assuming that the transacted volume is USD100,000, the minimum margin requirement will be equivalent to USD1,000.
- For Labuan money broker’s business model/customer interface which is exclusively or substantially electronic, proper management of technology risk must be in place:
- data/system security and arrangements for IT systems maintenance, resilience and support must be supported by a dedicated IT staff;
- notify Labuan FSA as soon as possible, upon discovery of any incident of system malfunction and intrusion; and
- a root cause and impact analysis report must be submitted to Supervision and Monitoring Department within 14 days or such longer period as the Authority may allow, from the discovery of the incident. The report shall contain:
- an executive summary of the relevant incident;
- an analysis of the root cause and the description of the impact of the relevant incident to the money broking business; and
- a description of the remedial measures taken to address the root cause and consequences of the relevant incident.
- For Labuan money broker that undertakes Islamic money broking business, is required to appoint a qualified person to its internal Shariah advisory board to ensure that its management and operation are in compliance with Shariah principles. In this regard, the Directive on Islamic Financial Business in Labuan IBFC shall also be observed.
Governing Legislation
- Labuan Financial Services and Securities Act 2010
- Labuan Companies Act 1990
- Labuan Business Activity Tax Act 1990
The Malaysian International Ship Registry (MISR), introduced to attract individual or foreign shipping companies to register their ships through Labuan IBFC thereby bypassing the requirements for a Malaysian majority shareholder, is expected to further enhance the jurisdiction’s shipping operations.
Shipping operations include the transportation of passengers or cargo by sea or the letting or charter of ships on a voyage or time charter basis.
The Malaysia International Ship Registry (MISR) is a body for the registering of international ships. The MISR has been established to encourage individuals and foreign shipping companies to register their ships in Malaysia without having to comply with the requirements of a Malaysian majority shareholder. The MISR would enable the placing of Malaysia on the international maritime map.
Under the MISR, foreigners are allowed to hold 100 per cent equity in line with the government's effort to encourage foreign investments in the country. With the registration of international ships, it would help increase the ship registry’s capacity in handling the country's transportation trade.
Port of Registry
The port of registry for a Malaysian international ship is Labuan.
Ship Owner Eligibility
The Registrar of Ships may register a ship as a Malaysian international ship, if it is owned by a corporation that satisfies the following requirements:
- Incorporated in Malaysia
- The office of the corporation is established in Malaysia; and
- The majority of the shareholding, including voting shares of the corporation are not held by Malaysian citizens.
Ship Manager Eligibility
The owner of a ship shall, before applying for a ship to be registered, appoint a ship manager who shall be:
- A Malaysian citizen having his permanent residence in Malaysia; or
- A company incorporated in Malaysia and having its principal place of business in Malaysia.
Vessel Age and Survey Requirements
No ship shall be registered under the MISR unless:
- it is fitted with mechanical means of propulsion
- it is not less than 1,600 gross tonnage; and
- the age of the ship is not more than 15 years if it is a tanker or a bulk carrier, or not more than 20 years if it is of a type other than a tanker or a bulk carrier.
Surveys are conducted by ship surveyors working under the direction of the Surveyor-General who may also authorise classification societies on his behalf.
Authorised Classification Society
The following are the recognised classification societies for the MISR:
- American Bureau of Shipping
- Bureau Veritas
- Det Norske Veritas
- Germanischer Lloyd
- Lloyd's Register of Shipping
- Nippon Kaiji Kyokai.
Part IV of the Labuan Financial Services and Securities Act 2010 provides for the licensing of securities licensees with the following scope of business:
Provide investment advice or administration services in respect of securities for the purpose of investment; or
Deal in securities; or
Provide other activity as may be specified by Labuan FSA.
Part V of the Labuan Islamic Financial Services and Securities Act 2010 provides for the licensing of Islamic securities licensees with the same scope of business as per securities licensees above. In addition, Islamic securities licensees shall also comply with the following requirements:
Carry on business in compliance with Shariah principles; and
Appoint qualified person(s) to its internal Shariah Advisory Board and notify Labuan FSA in writing of the appointment.
Application Requirements
In general, the submission should include the following:
- particulars of the financial and human resources and administrative facilities available to the applicant for the competent and efficient conduct of its business
- statement on the address of the applicant's place of business and its address for service in Labuan; the name and address of a person in Labuan who is authorised to represent the applicant and to accept services on its behalf; and the address of the applicant's place of business outside Labuan
- statement to the effect that the applicant has declared its compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and shall ensure that it shall update its policies and procedures periodically so as to comply with their requirements; and
- such other information or documents as Labuan FSA may reasonably require for the purpose of determining the application.