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Labuan Money Broking
  • The submission should include, but is not restricted to, the following:
    1. 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.
    2. 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.
    3. A business plan detailing the operations and strategies of the applicant.
    4. Audited financial statements for the last two years, if applicable.
    5. Any other information that is relevant to the application.
  • The applicant company:
    1. 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. 
    2. Maintain an operational office in Labuan. The operational office should be used for business purposes only and must be appropriately furnished with office equipment. 
    3. 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. 
    4. Ensure that the counterparties, i.e. principal broker and liquidity provider are regulated by a recognised supervisory or regulatory authority. 
    5. 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. 
    6. For Labuan money broker’s business model/customer interface which is exclusively or substantially electronic, proper management of technology risk must be in place: 
      1. data/system security and arrangements for IT systems maintenance, resilience and support must be supported by a dedicated IT staff; 
      2. notify Labuan FSA as soon as possible, upon discovery of any incident of system malfunction and intrusion; and 
      3. 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: 
        1. an executive summary of the relevant incident; 
        2. an analysis of the root cause and the description of the impact of the relevant incident to the money broking business; and 
        3. a description of the remedial measures taken to address the root cause and consequences of the relevant incident. 
    7. 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.
  • All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
    Type of Fees
    Amount
    Annual Fee
    RM5,000
    USD1,500
    Marketing Office Fee
    RM7,500
    USD2,500
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