Mutual Fund - Capital Markets

A mutual fund or fund means a Labuan company, a corporation incorporated under the laws of any recognised country or jurisdiction, a partnership, a protected cell company, a foundation or a unit trust which:

Collects and pools funds for the purpose of collective investment with the aim of spreading investment risk; and
Issues interests in a mutual fund which entitles the holder to redeem his investments that is agreed upon by the parties and receives an amount computed by reference to the value of a proportionate interest in the whole or part of the net assets of the aforesaid types of entities, as the case may be, and includes an umbrella fund whose interests in a mutual fund or units are split into a number of different classes of funds or subfunds and whose participants are entitled to exchange rights in one part for rights in another.

Two types of funds are prescribed under the Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654), namely private funds and public funds.

key highlights

21 number of fund managers in 2020

61.3% of the fund managers were from the Asia and the Pacific region, mainly from Malaysia and Singapore

View list of Fund Managers

Private Fund

Private funds are mutual funds:

whose securities are owned or held by:

not more than 50 investors where the first-time investment of each of such investors is not less than RM250,000 or such other sum as may be prescribed by Labuan FSA or the equivalent in any foreign currency; or
any number of investors where the first-time investment of each of such investors is not less than RM500,000 or such other sum as may be prescribed by Labuan FSA or the equivalent in any foreign currency; or

which is designated as a private fund under regulations made under the Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654).

Islamic private funds are private funds with similar definition to the above and are in compliance with Shariah principles.

Notification Requirements

A private fund can carry on its affairs by giving notice in writing of its scope and nature of business to Labuan FSA. The notification shall be accompanied with an information memorandum or such other offering document and should be lodged through a Labuan licensed entity. The information memorandum or such other offering document will be deemed as a prospectus and a lodgement fee of USD600 is applicable.

Governing Legislation

Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654)

Labuan Islamic Financial Services and Securities (Amendment) Act 2022 (Act A1655)

Labuan Companies Act 1990

Labuan Business Activity Tax Act 1990

Labuan Limited Partnerships and Labuan Limited Liability Partnerships Act 2010

Labuan Foundations Act 2010

Public Fund

Labuan public funds are those whose securities are offered for subscription to any members of the general public.

Registration Requirements
Application Requirements
Specific Requirements
Fees

Registration Requirements

No public fund shall carry on business in or from within Labuan unless it has been registered under Section 33(1)(a) of the Labuan Financial Services and Securities Act 2010 (LFSSA) or in the case of an Islamic public fund, Section 38(1)(a) of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA). The annual fee payable is RM2,000 (USD600).
Application Requirements
A copy of the Memorandum and Articles of Association / Partnership agreement / trust deed / charter / other constituent documents as the case may be of the fund.
Names, addresses, profiles and relevant experience of the director / general partner / designated partner / trustee / council members of the fund (Board of the public fund), whichever applicable. The appointment of any members of the Board of the public fund requires prior written approval from Labuan FSA.
The profile of the promoter/custodian/trustee/fund manager, whichever applicable.
An audited annual account of the promoter and fund manager, where applicable, for the three years preceding the application.
The profile of the qualified person as its Shariah adviser in the case of a Labuan Islamic public fund.
A signed declaration by the Board of the public fund on confidentiality and secrecy with regard to the operation and administration of the fund.
A certificate from an expert as required under Section 11 of the LFSSA or Section 16 of the LIFSSA that includes a statement certifying that the Labuan public fund complies with the requirements under Part III of LFSSA or Part IV of the LIFSSA and the Guidelines on the Establishment of Labuan Mutual Funds Including Islamic Mutual Funds.
A copy of the prospectus of the Labuan public fund which should comply with Section 35 of the LFSSA or Section 40 of the LIFSSA, either in draft or final form.
Specific Requirements
Appoint a fund manager, trustee, administrator and custodian (service provider) approved by Labuan FSA.
Ensure that the duties of the fund manager and custodian or trustee of the Labuan public fund are independent from each other. The duties of the fund manager for the public fund are provided under Sections 47, 48, 49 and 50 of the LFSSA and Sections 46, 47, 48 and 49 of the LIFSSA.
Maintain a registered office in Labuan. For a Labuan public fund which is permitted to be managed by a non-Labuan licensed fund manager, at least one of the service providers must be approved by Labuan FSA.
Ensure that all subscriptions are repaid immediately if the minimum level of subscription required is not met within the stipulated time.
Conduct its business with due diligence and sound principles.
Ensure that the shareholder and every members of the Board of the public fund including any other relevant person, are fit and proper persons in accordance with the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA.
Maintain adequate and proper accounting and other records in line with the Directive on Accounts and Record-Keeping Requirement for Labuan Entities issued by Labuan FSA that will sufficiently explain its transaction and financial position and indicate clearly its names and registration number on its letterhead, stationery and other documents.
Appoint an approved auditor to carry out an annual audit of the accounts in respect of the business operations and submit the audit report to the investors and Labuan FSA pursuant to Section 174 of the LFSSA and Section 135 of the LIFSSA within six months after the close of each financial year.
Comply with the requirements of Section 53 of the LFSSA and Section 54 of the LIFSSA with regards to its accounts and audit requirements.
Provide half yearly reporting to the investors, which includes (but not limited to) the following:
Portfolio valuation report showing actual portfolio mix of the fund;
The net asset value of the investment;
Independent verification/confirmation of existence of the fund’s assets; and
Other pertinent information to the investor with regard to the fund’s performance.
Notify Labuan FSA of any amendment or alteration to any of its constituent document within 30 days of the changes being effected including its business plan.
Obtain approval from Labuan FSA for any change to the members of the Board of the public fund.
Ensure fair and orderly winding down of the matured fund including having an auditor to ensure that all assets have been properly returned to investors.
Comply with the relevant laws and regulations of the jurisdictions where it intends to operate including obtaining the necessary approval.
Ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and Guidelines on Anti-Money Laundering and Counter Financing of Terrorism which is relevant to Labuan IBFC.
Ensure proper policies and procedures are in place to ensure a sound compliance framework that safeguards clients’ interests.
Fees

All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year. If any of the mutual funds uses a protected cell company (PCC) structure, the annual fee would be as follows:
Type of fees
Amount
Annual Fee
RM2,000
USD600
PCC Structure
Amount
Core
RM5,000
USD1,500
Each Cell
RM2,000
USD600

Registration Requirements
No public fund shall carry on business in or from within Labuan unless it has been registered under Section 33(1)(a) of the Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654) (LFSSA) or in the case of an Islamic public fund, Section 38(1)(a) of the Labuan Islamic Financial Services and Securities (Amendment) Act 2022 (Act A1655) (LIFSSA). The annual fee payable is USD600.
Application Requirements
A copy of the Memorandum and Articles of Association / Partnership agreement / trust deed / charter / other constituent documents as the case may be of the fund.
Names, addresses, profiles and relevant experience of the director / general partner / designated partner / trustee / council members of the fund (Board of the public fund), whichever applicable. The appointment of any members of the Board of the public fund requires prior written approval from Labuan FSA.
The profile of the promoter/custodian/trustee/fund manager, whichever applicable.
An audited annual account of the promoter and fund manager, where applicable, for the three years preceding the application.
The profile of the qualified person as its Shariah adviser in the case of a Labuan Islamic public fund.
A signed declaration by the Board of the public fund on confidentiality and secrecy with regard to the operation and administration of the fund.
A certificate from an expert as required under Section 11 of the LFSSA or Section 16 of the LIFSSA that includes a statement certifying that the Labuan public fund complies with the requirements under Part III of LFSSA or Part IV of the LIFSSA and the Guidelines on the Establishment of Labuan Mutual Funds Including Islamic Mutual Funds.
A copy of the prospectus of the Labuan public fund which should comply with Section 35 of the LFSSA or Section 40 of the LIFSSA, either in draft or final form.
Specific Requirements
Appoint a fund manager, trustee, administrator and custodian (service provider) approved by Labuan FSA.
Ensure that the duties of the fund manager and custodian or trustee of the Labuan public fund are independent from each other. The duties of the fund manager for the public fund are provided under Sections 47, 48, 49 and 50 of the LFSSA and Sections 46, 47, 48 and 49 of the LIFSSA.
Maintain a registered office in Labuan. For a Labuan public fund which is permitted to be managed by a non-Labuan licensed fund manager, at least one of the service providers must be approved by Labuan FSA.
Ensure that all subscriptions are repaid immediately if the minimum level of subscription required is not met within the stipulated time.
Conduct its business with due diligence and sound principles.
Ensure that the shareholder and every members of the Board of the public fund including any other relevant person, are fit and proper persons in accordance with the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA.
Maintain adequate and proper accounting and other records in line with the Directive on Accounts and Record-Keeping Requirement for Labuan Entities issued by Labuan FSA that will sufficiently explain its transaction and financial position and indicate clearly its names and registration number on its letterhead, stationery and other documents.
Appoint an approved auditor to carry out an annual audit of the accounts in respect of the business operations and submit the audit report to the investors and Labuan FSA pursuant to Section 174 of the LFSSA and Section 135 of the LIFSSA within six months after the close of each financial year.
Comply with the requirements of Section 53 of the LFSSA and Section 54 of the LIFSSA with regards to its accounts and audit requirements.
Provide half yearly reporting to the investors, which includes (but not limited to) the following:

Portfolio valuation report showing actual portfolio mix of the fund;
The net asset value of the investment;
Independent verification/confirmation of existence of the fund’s assets; and
Other pertinent information to the investor with regard to the fund’s performance.

Notify Labuan FSA of any amendment or alteration to any of its constituent document within 30 days of the changes being effected including its business plan.
Obtain approval from Labuan FSA for any change to the members of the Board of the public fund.
Ensure fair and orderly winding down of the matured fund including having an auditor to ensure that all assets have been properly returned to investors.
Comply with the relevant laws and regulations of the jurisdictions where it intends to operate including obtaining the necessary approval.
Ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and Guidelines on Anti-Money Laundering and Counter Financing of Terrorism which is relevant to Labuan IBFC.
Ensure proper policies and procedures are in place to ensure a sound compliance framework that safeguards clients’ interests.
Fees
All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year. If any of the mutual funds uses a protected cell company (PCC) structure, the annual fee would be as follows:
Type of fees
Amount
Annual Fee
USD600
PCC Structure
Amount
Core
USD1,500
Each Cell
USD600

Governing Legislation

Labuan Financial Services and Securities Act 2010

Labuan Islamic Financial Services and Securities Act 2010

Labuan Companies Act 1990

Labuan Business Activity Tax Act 1990

Labuan Limited Partnerships and Labuan Limited Liability Partnerships Act 2010

Labuan Foundations Act 2010

List of Fund Managers

A - F
G - Z

Go to FAQs

List of Fund Managers

A - F
G - Z

A - F
Arpels Fund Management Limited
Asian Asset Management Limited
Atlantis Capital Ltd
Berkeley Capital Asset Management Ltd
CCIB Asset Management Limited
Cogent Asset Management Ltd
Cremorne Capital Fund Management Limited
Farrringdon Asset Management Ltd. (also approved to conduct innovative financial services related business)

FinTech Digital Asset Management Limited
FTAG Asset Management Ltd (formerly known as GCX Financial Group Ltd)

Fulton Capital Management Ltd.Function Group (Labuan) Limited
Function Group (Labuan) Limited
G - Z
GA Peninsular Capital Limited
Genesis Investment (L) Limited
IAFC Asset Management Ltd.
Orbis Private Solutins S.A
Pacific Invesco Capital Ltd
Suisse Pacific Capital Partners A.G
Takumi Asset Management (Labuan) Ltd.
Washington Square Investment Management (Asia Pacific) Limited

A - F
G - Z

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FAQs

1. What is Labuan banking?
Labuan banking means the business of receiving deposits on current accounts, deposit accounts, savings accounts, and includes the investment banking business, Labuan financial business, Islamic banking business and such other transactions and terms and conditions as specified by Labuan FSA in any currency including Malaysian Ringgit where permitted by Bank Negara Malaysia.
2. What is investment banking?
Investment banking means the business of providing credit facilities and consultancy and advisory services relating to corporate and investment matters, including making investments on behalf of any person. Other activities include undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities.
3. What is Islamic banking?
Islamic banking is defined as a banking business that is in accordance with Shariah principles.
4. Who may apply for Labuan banking licence?
Organisations that meet the following minimum criteria may apply for a Labuan banking licence:
Must be a bank or financial institution
Possesses a sound track record
Accorded a good credit rating by acceptable rating agencies
Supervised by a competent regulatory authority; and
Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS).
5. What is the minimum working minimum fund for an investment bank?
RM10 million or its equivalent in any other currency.