Money Broking - Sectors & Offerings

Money broking is defined as the business of arranging transactions between buyers and sellers in money with brokers acting as an intermediary in consideration of brokerage fees paid or to be paid, but does not include the buying or selling of foreign currencies by the broker as a principal in such markets.

Companies with money broking business may only transact business in foreign currency and not deal in Malaysian Ringgit except for the purpose of defraying administrative and statutory expenses. Labuan money brokers are prohibited from dealing with residents other than authorised dealers under the Exchange Control Act 1953.

key highlights

78 number of money brokers in 2020

74.3% of Labuan money brokers were from Asia (Asia-Pacific and the Far East), mainly from Malaysia, Singapore and India

View list of Labuan Money Brokers

Application Requirements
Operational Requirements
Fees

Application Requirements
The submission should include, but is not restricted to, the following:

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.
Maintain an operational office in Labuan. The operational office should be used for business purposes only and must be appropriately furnished with office equipment.
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.
Ensure that the counterparties, i.e. principal broker and liquidity provider are regulated by a recognised supervisory or regulatory authority.
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.
For Labuan money broker’s business model/customer interface which is exclusively or substantially electronic, proper management of technology risk must be in place:
data/system security and arrangements for IT systems maintenance, resilience and support must be supported by a dedicated IT staff;
notify Labuan FSA as soon as possible, upon discovery of any incident of system malfunction and intrusion; and
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:
an executive summary of the relevant incident;
an analysis of the root cause and the description of the impact of the relevant incident to the money broking business; and
a description of the remedial measures taken to address the root cause and consequences of the relevant incident.
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.
Operational Requirements
The LCA requires a Labuan company to employ the services of a trust company to act as its incorporation agent. The services offered by a trust company include, but are not limited to, the following:

Provides the registered office and resident secretary.
Performs the secretarial duties of the Labuan company including lodgement of any documents required under the LCA.
Makes available any of its trust officers for appointment as resident director and resident secretary.
Fees

Type of fees
Amount
Annual Fee
RM5,000
USD1,500
Marketing Office Fee
RM7,500
USD2,500

Application Requirements
The submission should include, but is not restricted to, the following:

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.
Maintain an operational office in Labuan. The operational office should be used for business purposes only and must be appropriately furnished with office equipment.
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.
Ensure that the counterparties, i.e. principal broker and liquidity provider are regulated by a recognised supervisory or regulatory authority.
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.
For Labuan money broker’s business model/customer interface which is exclusively or substantially electronic, proper management of technology risk must be in place:

data/system security and arrangements for IT systems maintenance, resilience and support must be supported by a dedicated IT staff;
notify Labuan FSA as soon as possible, upon discovery of any incident of system malfunction and intrusion; and
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:

an executive summary of the relevant incident;
an analysis of the root cause and the description of the impact of the relevant incident to the money broking business; and
a description of the remedial measures taken to address the root cause and consequences of the relevant incident.

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.
Operational Requirements
The LCA requires a Labuan company to employ the services of a trust company to act as its incorporation agent. The services offered by a trust company include, but are not limited to, the following:

Provides the registered office and resident secretary.
Performs the secretarial duties of the Labuan company including lodgement of any documents required under the LCA.
Makes available any of its trust officers for appointment as resident director and resident secretary.
Fees
Type of fees
Amount
Annual Fee
RM5,000
USD1,500
Marketing Office Fee
RM7,500
USD2,500

Governing Legislation

Labuan Financial Services and Securities Act 2010

Labuan Companies Act 1990

Labuan Business Activity Tax Act 1990

Related Guidelines and Circulars

Guidelines on Carrying Out Money Broking Business in Labuan IBFC

List of Labuan Money Brokers

A - C
D - K
L - P
Q - Z
0 - 9

Go to FAQs

List of Labuan Money Brokers

A - C
D - K
L - P
Q - Z
0 - 9

A - C
AFS Global Limited
Albus Capital Inc.
Alfa Assets Group Limited
Alpha Data Ltd.
Antos Pinnacles Ltd
Auric International Markets Limited
Belfrics International Limited (formerly known as Po Tai Global Development Limited)
BX Financial Group Limited
Caps Solutions Ltd.
CDG Global (Labuan) Limited
CFX Prime Clearing Corporation (also approved to conduct digital financial services related business)
City Credit Capital (Labuan) LTD
D - K
Deriv (FX) Ltd. ((formerly known as Binary (FX) Ltd.) also approved to conduct digital financial services related business)
Forex River Ltd.
FTAG Capital Markets Ltd (formerly known as GCOX Ltd)
Fusang Exchange Ltd
FXgate Ltd.
Golden Brokers Limited
Hirose Financial MY Limited (also approved to conduct digital financial services related business)
Huobi Labuan Limited
HWGG Capital P.L.C. (also approved to conduct digital financial services related business)
Hyper Global Trade Pte. Ltd
ICE-FX Markets Limited
ICM Trader Ltd
IFC Markets Ltd
IRC Ltd.
L - P
Ledger Technologies Limited
Lirunex Limited
Makasky Limited
Market Alliance Limited
MGK Global Limited
MX Capital Financial Limited
Neurogine Capital (L) (also approved to conduct digital financial services related business)
Ngel Partners Pte. Ltd.
Ortega Capital Limited
Pocket Trader (Malaysia) Limited
Q - Z
Revollet International Limited
RoboMarkets Asia Ltd
Saba Capital Inc.
Select Investment Company Limited
SG Advisory Limited
Strategy Station Ltd.
Suite Dynamics Financial Ltd.
THDEX LIMITED
Tickmill Asia Ltd
Topworth Investments Ltd.
TradeUltra Limited
Tradewinds Futures Limited
TVM Global Limited
uTrada Limited
UW Global Inc.
VDX Capital Ltd
VENN PRIME SECURITIES LIMITED
Ventura Prime FX Limited
0 - 9
4XHUB Limited

A - C
D - K
L - P
Q - Z
0 - 9

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For company search, please click on the link provided : https://www.lfsacoral.gov.my/reefs/

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View List of Banks

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.