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Labuan FSA Revises Governance and Market Conduct Framework for Labuan Trust Companies
Labuan Financial Services Authority (Labuan FSA) has issued the Governance and Market Conduct Framework for Labuan Trust Companies, which will largely come into effect on 1 July 2016.

The framework is designed to provide the minimum standards that will need to be adhered by a Labuan trust company (LTC) operating in Labuan International Business and Financial Centre (Labuan IBFC). It is also intended to reflect Labuan FSA’s minimum expectations in relation to the various attributes of an LTC in terms of its governance, management, internal controls, obligations and responsibilities as well as its market conduct practices vis-à-vis its clients.

The framework is made up of three sections:

  • Part I: Corporate Governance – a set of principles on how the LTC should be directed or controlled to fulfil its goals and objectives, in a manner that adds value to the company and is beneficial to its stakeholders in the long term 
  • Part II: Market Conduct – details the responsibilities and proper practices to be implemented by LTCs to heighten clients’ confidence and protection 
  • Part III: Reporting Requirements – covers the areas in which LTCs are required to notify Labuan FSA regarding changes pertinent to their business details. 

It will replace the Guidelines for a Trust Company (dated January 2005) and the Directive on Internal Audit Requirement for Labuan Trust Companies (dated 20 April 2011). 

For the framework, please refer to the attachment.

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