LABUAN FINANCIAL SERVICES AND SECURITIES ACT 2010

Labuan Financial Services and Securities LAWS OF MALAYSIA REPRINT Act 704 LABUAN FINANCIAL SERVICES AND SECURITIES ACT 2010 As at 15 October 2022 PUBLISHED BY THE COMMISSIONER OF LAW REVISION, MALAYSIA UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 2022 1 2 Laws of Malaysia Act 704 LABUAN FINANCIAL SERVICES AND SECURITIES ACT 2010 Date of Royal Assent … … … 31 January 2010 Date of publication in the Gazette 11 February 2010 … … Latest amendment made by Act A1654 which came into operation on … … … … 1 January 2019 Labuan Financial Services and Securities LAWS OF MALAYSIA Act 704 LABUAN FINANCIAL SERVICES AND SECURITIES ACT 2010 ARRANGEMENT OF SECTIONS Part I PRELIMINARY Section 1. Short title and commencement 2. Interpretation 3. Administration of the Act 4. Fit and proper person 5. Business in, from or through Labuan 6. Syariah matters Part II SECURITIES Division 1 PRELIMINARY 7. Interpretation Division 2 OFFERS 8. Offers or invitations which require the approval of the Authority 9. False or misleading statements 3 4 Laws of Malaysia Act 704 Section 10. Advertisements 11. Registration of prospectus 12. Document containing offer of securities to be made via Labuan trust company or bank licensee and to be deemed prospectus 13. Expert’s consent to issue of prospectus containing statement by him 14. Civil liability for misstatement in prospectus 15. Criminal liability for misstatement in prospectus 16. Labuan trust company or bank licensee as agent in offer 17. Prohibition of allotment unless minimum subscription received 18. Application monies to be held in trust until issuance or allotment Division 3 DEBENTURES 19. Power to issue debentures 20. Trustee for debenture holders 21. Exemptions and indemnifications of trustee from liability 22. Duties of trustee 23. Obligations of directors of borrowing company 24. Obligation of guarantor company to furnish information 25. Loan and deposits to be immediately repayable on certain events 26. Retention of over-subscriptions in debenture issues Part III MUTUAL FUNDS Division 1 PRELIMINARY 27. Interpretation Labuan Financial Services and Securities 5 Division 2 MUTUAL FUNDS Subdivision 1 PRIVATE FUNDS Section 28. Notification by private funds 29. Private fund to lodge an information memorandum or such other offering document 30. Exclusion of liability for errors or omission in the information memorandum or such other offering document Subdivision 2 PUBLIC FUNDS 31. Public funds shall be registered 32. Application by public funds 33. Power to grant or refuse registration of public funds 34. Registration procedure 35. Prospectus relating to public fund 36. Investors’ rights 37. Limitation 38. Certificate of compliance 39. Foreign public fund may be managed or administered in Labuan Division 3 LICENSING Subdivision 1 FUND MANAGERS AND FUND ADMINISTRATORS 40. Licensing of fund managers 41. Licensing of fund administrators 42. Application for fund manager’s licence 6 Laws of Malaysia Act 704 Section 43. 44. Application for fund administrator’s licence Power to grant or refuse licence Subdivision 2 TRUSTEES OR CUSTODIANS 45. Eligibility of trustees or custodians of public funds Subdivision 3 GRANT OF LICENCE OR REGISTRATION 46. Licence or registration Division 4 DUTIES 47. Duties of fund managers and fund administrators of public funds 49. Specific duties of fund managers of public funds 48. 50. 51. Duties of fund managers, fund administrators, trustees or custodians and directors under applicable law Duty to segregate client’s assets Duty of fund manager and custodian or trustee to be independent of each other Division 5 REGISTERS AND ACCOUNTING 52. 53. Registers Accounts and audit Part IV MARKET INTERMEDIARIES Division 1 PRELIMINARY 54. Interpretation Labuan Financial Services and Securities Division 2 SECURITIES LICENSEE Section 55. Securities licensee 56. Application for licence 57. Power to grant or refuse licence Division 3 GRANT OF LICENCE 58. Licence Part V LABUAN TRUST COMPANIES Division 1 PRELIMINARY 59. Interpretation 60. Licence required to carry on trust company business in Labuan 61. Licensing of trust companies 62. Terms and conditions of licence 63. Temporary continuation for winding-up Division 2 POWERS OF LABUAN TRUST COMPANIES 64. Disclosure of interests in relation to Labuan trust company 65. Labuan trust company’s power to act as executor 66. Labuan trust company’s power to act as administrator 67. Additional powers of a Labuan trust company 68. Labuan trust company’s power to act as sole trustee 69. Labuan trust company’s power to act as joint trustee with another 70. Delegation to Labuan trust company 7 8 Laws of Malaysia Act 704 Division 3 LABUAN MANAGED TRUST COMPANIES Section 71. Licensing of Labuan managed trust companies 72. Terms and conditions of licence as Labuan managed trust company Division 4 LABUAN PRIVATE TRUST COMPANIES 73. Meaning of “connected persons” 74. Registration as Labuan private trust company 75. Terms and conditions of registration as a Labuan private trust company 76. Duties of agent of Labuan private trust company 77. Powers of the Authority 78. Non-application of the provisions of this Part Division 5 MISCELLANEOUS 79. Labuan trust company subject to same control as any other executor 80. Affidavit of officer 81. Examination of books and accounts of a Labuan trust company 82. Retention of records 83. Money paid to a Labuan trust company to be held in trust 84. Commission, fees, charges and expenses levied by a Labuan trust company 85. Translation of accounts and records Part VI LABUAN BANKING Division 1 PRELIMINARY 86. Interpretation Labuan Financial Services and Securities 9 Division 2 LICENSING Section 87. Labuan banking business, Labuan investment banking business and Labuan financial business to be carried on only under licence 88. Application for licence to carry on Labuan banking business 89. Application for licence to carry on Labuan investment banking business 90. Application for licence to carry on Labuan financial business 91. Additional information 92. Grant of licence by the Authority 93. Requirement to use, and restriction on use of, the words “licensed Labuan bank”, etc. 94. Maintenance of capital adequacy ratio 95. Amendment or alteration of constituent documents of bank licensees 96. Authority to publish list of Labuan banks and Labuan investment banks Division 3 DUTIES OF BANK LICENSEES 97. Offices and subsidiaries 98. Prohibition of certain accounts 99. Financial statements, statistics and information to be submitted to the Authority Division 4 GENERAL PROVISION 100. Payment from a deceased person’s account Part VII LABUAN INSURANCE Division 1 PRELIMINARY 101. Interpretation 10 Laws of Malaysia Act 704 Division 2 LICENSING OF LABUAN INSURANCE BUSINESS AND LABUAN INSURANCE-RELATED ACTIVITIES Section 102. Licensing of Labuan insurance business and Labuan insurance-related activities 103. Application for insurance licence to carry on Labuan insurance business 104. Application for insurance licence to carry on Labuan insurance-related activities 105. Grant of insurance licence 106. Publication of list of all insurance licensees 107. Continuing licensing requirements Division 3 FINANCIAL REQUIREMENTS AND DUTIES OF AND RESTRICTIONS ON INSURANCE LICENSEES 108. Appointment of actuary 109. Margin of solvency 110. Separate accounts to be kept by Labuan insurer 111. Submission of financial statements 112. Subsidiaries and offices of insurance licensee 113. Restriction on business by Labuan insurer 114. Restrictions on and duties of Labuan insurance manager, Labuan underwriting manager and Labuan insurance broker 115. List of Labuan insurers to be supplied by Labuan insurance manager and Labuan underwriting manager 116. Conduct of business Division 4 PAYMENT OF POLICY MONIES UNDER A LIFE POLICY AND PERSONAL ACCIDENT POLICY 117. Application of this Division 118. Power to make nomination 119. Revocation of nomination 120. Payment of policy monies Labuan Financial Services and Securities Section 121. Trustee of policy monies 122. Nominee other than a nominee under section 121 123. Assigned or pledged policy monies 124. Payment of policy monies where there is no nomination 125. Payment to person incompetent to contract 126. Distribution of policy monies in due course of administration 127. This Division to prevail over policy and any other written law Division 5 WINDING-UP 128. Winding-up of Labuan insurer Part VIII COMPANY MANAGEMENT 129. Interpretation 130. Register of management companies 131. Application for licence 132. Grant of licence Part IX EXCHANGES Division 1 PRELIMINARY 133. Interpretation Division 2 EXCHANGES 134. Establishment of exchanges 135. By-laws of exchanges 136. Rules of exchanges 11 12 Laws of Malaysia Act 704 Section 137. Regulatory functions of exchanges 138. Powers of the committee 139. Dealing in securities 140. Register of trading agents and listing sponsors 141. Financial statements of an exchange 142. Persons not deemed to be carrying on business in Malaysia 143. Suspension of trading on exchanges 144. Minister’s power to suspend trading 145. Powers of the Authority Division 3 FALSE OR MISLEADING MARKET AND INSIDER DEALING 146. Creation of false or misleading market 147. Insider dealing 148. Defences 149. Dealing in securities 150. Procuring the acquisition or disposal of securities 151. Inside information 152. “Price-affected securities” and “price-sensitive information” 153. Information as an insider 154. Definition of “made public” 155. Exceptions Part X SELF-REGULATORY ORGANIZATIONS 156. Declaration or recognition of a self-regulatory organization 157. Rules of a self-regulatory organization 158. Restriction on decision-making 159. Obligations of and in relation to officers of a self-regulatory organization 160. Powers to direct a self-regulatory organization 161. Termination of arrangements and revocation of declaration or recognition 162. Amendments to the constitution of a self-regulatory organization Labuan Financial Services and Securities 13 Section 163. Protection for a self-regulatory organization 164. Financial statements of the self-regulatory organization 165. Powers of Authority with respect to self-regulatory organizations Part XI MISCELLANEOUS Division 1 APPEALS 166. Appeals Division 2 REVOCATION AND SURRENDER 167. Revocation of consent, licence or registration 168. Revocation procedure 169. Surrender of licence or registration 170. Consequences of revocation or surrender of licence Division 3 GENERAL 171. Payment systems 172. Transfer of business 173. Internal audit 174. External auditor 175. Accounts and records 176. Money or other property from illegal activities 177. Examination and inspection of books and documents of licensed entities 178. Secrecy 179. Translation 180. Application of Labuan Financial Services Authority Act 1996 181. Application of Labuan Islamic Financial Services and Securities Act 2010 14 Laws of Malaysia Act 704 Section 182. Application of Exchange Control Act 1953 183. Application of Capital Markets and Services Act 2007 184. Application of Labuan Companies Act 1990 and Companies Act 1965 185. Non-application of certain laws 186. Immunity 187. General penalty 188. Offences by body corporate 189. Annual and licence fees 190. Fees and penalties to be paid into Fund 191. Procedure where none laid down 192. Misrepresentation 193. Enforcement 194. Power to compound 195. Service of documents 196. Power of the Minister to make regulations 197. Power of the Minis