LABUAN FINANCIAL SERVICES AUTHORITY ACT 1996

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 545 LABUAN FINANCIAL SERVICES AUTHORITY ACT 1996 As at 1 December 2011 2 LABUAN FINANCIAL SERVICES AUTHORITY ACT 1996 Date of Royal Assent … … 24 January 1996 Date of publication in the Gazette … … 1 February 1996 Latest amendment made by Act A1365 which came into operation on … … … … 11 February 2010 PREVIOUS REPRINTS First Reprint … … … 2002 Second Reprint … … … 2006 3 LAWS OF MALAYSIA Act 545 LABUAN FINANCIAL SERVICES AUTHORITY ACT 1996 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and commencement 2. Interpretation PART II THE AUTHORITY 3. The Authority and its objectives 4. Functions and powers of the Authority 4A. Power to issue guidelines 4B. Power to issue directions 4C. Power to publish information 5. Membership of the Authority 6. Tenure of office 7. Resignation and revocation 8. Vacation of office 9. Power of the Minister to give directions and require information 10. Authority to determine its own procedure 4 Laws of Malaysia ACT 545 Section 11. Authority may invite others to meetings 12. Remuneration or allowance 13. Common seal 14. Delegation of Authority’s function or powers 15. Authority may establish committees 16. Minutes 17. Disclosure of interest 17A. Preservation of secrecy 18. Appointment of officers and servants of the Authority 18A. Establishment of staff welfare fund 19. Power to grant loans and make advances to its officers and servants 20. Disciplinary committees 21. Appeal against decision of disciplinary committee 22. Power to make disciplinary regulations 23. Imposition of surcharge 24. Notification of surcharge 25. Withdrawal of surcharge 26. Recovery of surcharge 27. Composition of the Authority in special cases 28. Public servants PART IIA ENFORCEMENT POWERS AND PRESERVATION OF INFORMATION 28A. Interpretation in relation to Part IIA 28B. Submission of information 28BA. Power to report suspected offence and adverse conditions 28C. Examination 28D. Appointment of investigating officer, powers, functions and duties 28E. Powers of entry, search and seizure Labuan Financial Services Authority Section 28F. Power to examine persons 28G. Search of a person 28H. Obstruction to exercise of powers by an investigating officer 28I. Tipping off 28J. Admissibility of statements by accused persons 28K. Admissibility of statements and documents of persons who are dead or cannot be traced 28L. Admissibility of translation of documents 28M. Evidence taken in foreign states 28N. Admissibility of statements 28O. Protection of informers 28P. Assistance to other authority PART III FINANCE 29. The Fund 30. Expenditure to be charged on the Fund 31. Conservation of Fund 32. Levies 32A. Power to impose and collect fee 33. Accounts and reports 34. Power to borrow 35. Investment PART IV GENERAL 36. Protection against suit and legal proceedings 36A. Representation in civil proceedings 36AA. Additional powers of the Authority 36B. Compounding of offences 36C. Liability of director, officer, controller, etc. 36D. Power to prosecute offences 5 6 Laws of Malaysia Section 36E. Application for winding up 36F. Additional monetary punishment 36G. Power to impose administrative penalties 36H. Injunctions or other relief 36I. Special audit 37. Power to make regulations 38. Power of the Minister to make modifications 38A. Power to amend Schedule 38B. Service of documents on Labuan financial institutions 38C. Public Authorities Protection Act 1948 38D. Conflict between laws 38E. Procedure where none laid down 39. Savings and transitional SCHEDULE ACT 545 7 LAWS OF MALAYSIA Act 545 LABUAN FINANCIAL SERVICES AUTHORITY ACT 1996 An Act to establish the Labuan Financial Services Authority and to provide for its functions and powers, and for matters connected therewith. [15 February 1996, P.U. (B) 66/1996] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: PART I PRELIMINARY Short title and commencement 1. This Act may be cited as the Labuan Financial Services Authority Act 1996 and shall come into force on such date as the Minister may, by notification in the Gazette, appoint; and the Minister may appoint different dates for the coming into force of different provisions of this Act. Interpretation 2. (1) In this Act, unless the context otherwise requires— “accounting officer” includes every officer and servant who is charged with the duty of collecting, receiving, or accounting for, or 8 Laws of Malaysia ACT 545 who in fact collects, receives or accounts for, any money of the Fund, or who is charged with the receipt, custody or disposal of, or the accounting for, any store and property of the Authority or who in fact receives, holds or disposes of such store and property; “Authority” means the Labuan Financial Services Authority established under section 3; “Bank” means the Central Bank of Malaysia established under the Central Bank of Malaysia Act 1958 [Act 519]; “Chairman” means the Chairman appointed under section 5; “committee” means any committee established by the Authority under subsection 15(1); “corporation” means any body corporate formed or incorporated or existing within Malaysia or outside Malaysia and includes any foreign Labuan company as defined in the Labuan Companies Act 1990 [Act 441] but does not include— (a) any corporation sole; (b) any trade union registered under any written law; and (c) any society registered under any written law relating to co-operative societies; “dependant”, in relation to an officer or servant of the Authority, means the spouse, parent, children, including adopted children or step-children, or such other person as may be specified by the Authority with the consent of the Minister from time to time by notice published in the Gazette; “Director General” means the Director General appointed under section 5; “Fund” means the Fund established under subsection 29(1); “Labuan” means the Federal Territory of Labuan; Labuan Financial Services Authority 9 “Labuan financial institution” means any person— (a) providing Labuan financial services; or (b) incorporated, registered or established under the laws specified in the Schedule; “Labuan financial services” means any service provided by any person under any of the laws specified in the Schedule; “Minister” means the Minister for the time being charged with the responsibility for finance; “Registrar” means the Registrar of Companies under the Companies Act 1965 [Act 125], and includes any Regional Registrar, Deputy Registrar or Assistant Registrar of Companies. (2) (Deleted by Act A1365). PART II THE AUTHORITY The Authority and its objectives 3. (1) There is hereby established a body corporate by the name of “Labuan Financial Services Authority” with perpetual succession and a common seal, which may sue and be sued in its name and, subject to and for the purposes of this Act, may enter into contracts and may acquire, purchase, take, hold and enjoy movable and immovable property of every description and may convey, assign, surrender, yield up, charge, mortgage, demise, reassign, transfer or otherwise dispose of, or deal with, any movable or immovable property or any interest therein vested in the Authority upon such terms as it deems fit. (2) The objectives of the Authority are— 10 Laws of Malaysia ACT 545 (a) to promote and develop Labuan as an international centre for business and financial services; (b) to develop national objectives, policies and priorities for the orderly development and administration of the international business and financial services in Labuan; and (c) to act as the central regulatory, supervisory and enforcement authority of the international business and financial services industry in Labuan. Functions and powers of the Authority 4. (1) The functions of the Authority shall be— (a) to administer, enforce, carry out and give effect to the provisions of this Act and the laws specified in the Schedule and anything incidental to such laws and to ensure that such laws are complied with; (b) to exercise, discharge and perform such powers, duties and functions under the laws referred to in paragraph (a); (c) to maintain the good repute of Labuan as an international business and financial centre; (d) to carry out research and commission studies on financial services in Labuan; (e) to make recommendations for the creation and improvement of any facility likely to enhance the attraction of Labuan as a centre for financial services; (f) to co-operate with Labuan financial institutions and professional and industry associations in Labuan to promote and provide financial services and to foster high standards for Labuan financial services; Labuan Financial Services Authority 11 (g) to advise and make recommendations to the Minister on matters relating to Labuan financial services; and (h) to carry out all such activities and to do all such things as are necessary or advantageous and proper for the administration of the Authority, or for such other purposes as may be directed by the Minister. (2) The Authority shall have power to do all things expedient or reasonably necessary for, or incidental to, the performance of its functions and, in particular, but without prejudice to the generality of the foregoing— (a) to appoint such agents as it deems fit for the purpose of performing its functions; (b) to impose fees or any other charges it deems fit for giving effect to any of its functions or powers; (c) to do such other things as it deems fit to enable it to carry out its functions and powers effectively. (3) (Deleted by Act A1365). (4) The Authority may, with the written approval of the Minister, establish or participate in any body corporate— (a) for the purpose of promoting research and training in relation to offshore financial services; (b) for the purpose of enhancing the development of offshore financial services; or (c) if such establishment or participation is expedient or reasonably necessary for, or incidental to, the performance of the Authority’s functions provided under this Act or the laws specified in the Schedule. (5) (Deleted by Act A1365). 12 (6) Laws of Malaysia ACT 545 (Deleted by Act A1365). Power to issue guidelines 4A. (1) The Authority may, in respect of this Act or the laws specified in the Schedule or any other matter relating to Labuan financial services, issue guidelines to clarify any provision of this Act or the laws specified in the Schedule to facilitate compliance with the law by a Labuan financial institution or any other matters relating to Labuan financial services. (2) The Authority may amend or revoke any guideline issued under this section. Power to issue directions 4B. (1) Notwithstanding any provision to the contrary in any other law relating to Labuan financial services, when the Authority is satisfied that it is necessary to do so for the purpose of giving effect to the objectives of the Authority, the Authority may issue directions to a Labuan financial institution in respect of all or any of the following matters: (a) the policy to be followed by the Labuan financial institution relating to the conduct of the institution’s business in Labuan; (b) the supervision and regulation of the Labuan financial institution pursuant to the laws relating to Labuan financial services; (c) the monetary policy to be given effect to by the Labuan financial institution; and (d) the action to be taken by the Labuan financial institution relating to its members or servants. Labuan Financial Services Authority 13 (2) Any Labuan financial institution who