* Labuan Financial Services And Securities Act 2010

Original Language Title: * Labuan Financial Services And Securities Act 2010

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Laws of MALAYSIA _ _ _ _ _ _ _ _ _ _ _ _ _ ONLINE VERSION of the PRINT TEXT that UPDATE _ _ _ _ _ _ _ _ _ _ _ _ _ Act 704 FINANCIAL SERVICES and SECURITIES ACT of LABUAN 2010 As on 1 June 2015 2 FINANCIAL SERVICES and SECURITIES ACT of LABUAN 2010 date of Assent......... January 31, 2010 the date of publication in the Gazette......... February 11, 2010 3 laws of MALAYSIA Act 704 FINANCIAL SERVICES and SECURITIES ACT of LABUAN 2010 ARRANGEMENT of SECTIONS part I preliminary section 1. Short title and commencement 2. Interpretation 3. Administration of Act 4. People who are fit and proper 5. Business in, from or through Labuan 6. Shariah matters PART II 1 the START of TERM SECURITIES 7. Interpretation of TERM 2 offers 8. Offer or invitation which requires Board approval 4 laws of Malaysia ACT 9 Section 704. False or misleading statement 10. Ad 11. Registration of prospectus 12. Documents containing the offer of securities shall be made by the Labuan trust companies or licensees of the bank and shall be deemed to be a prospectus 13. The agreement of the expert on the production of the prospectus containing statement by him 14. Civil liability due to erroneous statement in the prospectus 15. Criminal liability because of a mistaken statement in the prospectus 16. Labuan trust companies or licensees of the bank as agent for the offer of 17. Prohibition of allotment unless minimum payment received 18. Money application should be held on trust until the publication or allotment 3 TERM DEBENTURES 19. Authority to issue debentures 20. Trustee for holders of debentures 21. Waiver and indemnity the Trustees from liability 22. Duties of Trustees 23. The obligations of Directors of borrowers 24. The company's obligation of the guarantor to provide information 25. Loan and deposit shall be refunded immediately upon the occurrence of certain 26. The detention of the issue of debentures terpohon buy excessive financial services and Labuan Securities 5 PART III CHAPTER 1 the BEGINNING of the MUTUAL FUNDS section 27. Interpretation of CHAPTER 2 MUTUAL FUNDS SUBPENGGAL 1 PRIVATE FUNDS 28. Notification by the private fund 29. Private fund shall submit information memorandum or any other offer documents 30. Waiving of liability because of an error or omission in the information memorandum or any other offer documents SUBPENGGAL 2 PUBLIC FUNDS 31. Public funds must be registered 32. Application by public funds 33. Power to allow or refuse to allow the registration of public funds 34. Procedure of registration 35. The prospectus relating to public funds 36. Investor rights 37. Limitations of 38. Certificate of conformity 39. Foreign public funds can be managed or administered in Labuan 6 laws of Malaysia ACT 704 SUBPENGGAL 1 TERM 3 LICENSING FUND MANAGERS and FUND ADMINISTRATOR section 40. Licensing Fund Manager 41. Licensing Administrator 42 funds. Application for Fund Manager's license 43. Application for license administrators 44 funds. The power to grant or refuse to grant the license SUBPENGGAL 2 a TRUSTEE or GUARDIAN 45. The eligibility of a trustee or guardian of public funds SUBPENGGAL 3 GRANT of a LICENSE or REGISTRATION 46. License or registration DUTIES of Division 4 of 47. Obligations of the Fund managers and fund administrator for public fund 48. Obligations of the Fund managers, fund administrators, trustees or guardians and directors under law applicable 49. Specific obligations for public funds Manager funds 50. The obligation to set aside assets Securities and financial services customers Labuan 7 Section 51. Obligations of the Fund managers and custodians or trustees to act independent of each other TERM 5 CHECK and ACCOUNTING 52. Express 53. Accounts and audit PART IV CHAPTER 1 the BEGINNING of MARKET INTERMEDIARIES 54. Interpretation of TERM 2 LICENSEE SECURITY 55. Securities licensee 56. Application for licence 57. The power to grant or refuse to grant the license TERM 3 GRANT of LICENSE 58. 8 license laws of Malaysia ACT 704 part V LABUAN TRUST COMPANIES TERM 1 preliminary section 59. Interpretation of 60. License required to conduct business trust companies in Labuan 61. Trust company registration 62. Terms and conditions of license 63. Continuation of the temporary for the winding up of TERM 2 LABUAN TRUST COMPANIES POWER 64. Disclosure of interest in relation to the Labuan trust companies 65. Labuan trust companies power to act as executor 66. Labuan trust companies power to act as the administrator of 67. The extra power of Labuan trust companies 68. Labuan trust companies power to act as a sole trustee is 69. Labuan trust companies power to act as trustee along with other Trustees of the 70. Delegation to the Labuan trust companies TRUST COMPANIES MANAGED TERM 3 LABUAN 71. Labuan trust companies licensing managed 72. The terms and conditions of the licence as a trust company managed Labuan financial services and Labuan Securities 9 of Division 4 of PRIVATE TRUST COMPANIES in LABUAN Section 73. Meaning "person related to 74. Registration as a private trust companies in Labuan 75. Terms and conditions of registration as a private trust companies in Labuan 76. The duties of private trust company agent Labuan 77. Power Board 78. Disapplication of the provisions of this section 5 TERM of the VARIOUS Section 79. Labuan trust companies subject to the same control as any executor other 80. Affidavit of officers 81. Examination of the books and accounts of the trust companies in Labuan 82. Retain a record 83. Money paid to Labuan trust companies shall be held upon trust 84. Commissions, fees, charges and expenses levied by Labuan trust companies 85. The translation of the accounts and records of PART VI BANKING LABUAN 86. Interpretation of the 10 laws of Malaysia ACT 704 CHAPTER 2 LICENSING Section 87. Banking business of Labuan, Labuan investment banking business and financial business of Labuan shall be carried out only under licence 88. Application for a license to carry out banking business Labuan 89. Application for a license to run the investment banking business of Labuan

90. An application for a license to conduct financial business Labuan 91. 92. Additional information Grant of a license by the Board 93. Requirements to use, and restrictions on the use of the words "bank Labuan licensed", etc.
94. The preservation of capital adequacy ratio of 95. Amendment or variation of constituent documents of bank licensee 96. The Board shall publish the list of Labuan and Labuan investment bank CHAPTER 3 DUTY of LICENSEE BANK 97. Offices and subsidiaries 98. Prohibition of certain accounts 99. Financial statements, statistics and information should be submitted to the Board of Division 4 GENERAL PROVISIONS 100. Payment of the deceased's account of the financial services and securities Labuan 11 PART VII 1 the START of TERM LABUAN INSURANCE 101. Interpretation of TERM 2 LABUAN INSURANCE BUSINESS LICENSING and INSURANCE RELATED ACTIVITIES LABUAN 102. Business licensing and related activities insurance Labuan Labuan insurance 103. Applications for licences to carry on insurance business insurance Labuan 104. Application for the insurance license to carry out related activities insurance Labuan 105. Grant of licences 106 insurance. Publication of a list of all insurance licensees 107. Continuation of the licensing requirements of CHAPTER 3 of the FINANCIAL NEEDS and OBLIGATIONS and RESTRICTIONS on LICENSEE 108 INSURANCE. The appointment of actuarial 109. Solvency margin of 110. Separate accounts shall be kept by the insurer Labuan 111. Presentation of the financial statements of 112. The subsidiaries and offices of insurance licensees 113. Restrictions on business by insurers Labuan 114. Restrictions on insurance Manager duty and Labuan, Labuan underwriting Manager and insurance broker Labuan 115. List of insurers Labuan shall be given by the Manager of insurance underwriting Manager and Labuan Labuan 12 laws of Malaysia ACT 116 Section 704. Conduct of business CHAPTER 4 PAYMENT POLICY MONEYS UNDER the POLICY of LIFE and PERSONAL ACCIDENT POLICIES 117. The adoption of this term of the 118. The power to make the naming of 119. The cancellation of the naming of 120. Payment of moneys policy 121. Trustee for policy moneys 122. Nominee other than a nominee under section 121 123. Money policy diserahhakkan or backed up 124. Payment of money policy if there is no nomination 125. Payments to people who are not competent to contract to 126. Division of policy moneys in the normal course of the administration of 127. This term to overcome policy and any other written law CHAPTER 5 WINDING UP 128. Winding up of insurers Labuan PART VIII MANAGEMENT COMPANY 129. Interpretation of 130. Express company management 131. Application for licence 132. Grant of licences of Labuan Securities and financial services 13 PART IX EXCHANGE TERM 1 preliminary section 133. Interpretation of TERM 2 BURSA 134. The establishment of the Exchange's 135. By-laws of bursa 136. The rules of the bursa 137. The regulatory function of the bursa 138. Authority the Committee is 139. Quoted securities 140. Express agent trading and listing sponsor 141. The financial statements of the bursa 142. The person is not deemed to conduct business in Malaysia 143. Suspension of trading on bursa 144. Minister's power to suspend trading of 145. Power Board CHAPTER 3 FALSE or MISLEADING MARKET and TRANSACTIONS of PEOPLE in 146. The creation of false or misleading market 147. Transactions of people in 148. Defense 149. Quoted securities 14 laws of Malaysia ACT 704 Section 150. Get the acquisition or disposal of securities 151. Internal information 152. "The affected Securities price" and "sensitive information" price 153. Information as people in 154. The definition of "broadcast to the public" 155. Exclusion of part X 156 SELF-REGULATORY ORGANIZATION. Declaration or recognition of self-regulatory organization 157. Rules of self-regulatory organization 158. Restrictions on decision making 159. The obligations of officers and obligations relating to the self-regulatory organization officer 160. The power to give directions to the self-regulatory organization's 161. Termination of arrangements and cancellation declaration or recognition of 162. Amendments to the Constitution of the self-regulatory organizations 163. Protection of the self-regulatory organization's 164. The financial statements of the self-regulatory organizations 165. Powers of the Board in respect of self-regulatory organization PART XI VARIOUS term APPEAL Section 166. Appeal of Labuan Securities financial services and 15 TERM 2 CANCELLATION and SURRENDER of section 167. Cancellation of the agreement, licences and registration of 168. Procedure for cancellation of 169. Surrendering a license or registration of 170. As a result of cancellation or surrender of a licence TERM of the 3 AM 171. 172. Payment systems 173. business transfer Internal audit 174. The external auditors 175. Accounts and records of 176. Money or other property from illegal activities law 177. Inspection and review of the books and documents of the licensed entity 178. Confidentiality of 179. Translation of 180. Application of Act 1996 181 Labuan financial services. The adoption of the financial services and Securities Act of Islam Labuan 2010 182. Application of the Exchange Control Act 1953 183. Application of the capital markets and Services Act 2007 184. Application of the companies Act 1990 Labuan and the companies Act 1965 185. Non-compliance with certain laws 186. Immunity 187. 188. General penalty Offences by body corporate 189. Annual fee and license fee 190. Fees and penalties shall be paid into the funds of the 191. Procedure when there is no procedure stated 192. Misstatement 16 laws of Malaysia ACT 704 Section 193. Enforcement of 194. Power to compound 195. Delivery of document 196. Power of Minister to make regulations 197. Minister's power to issue directions 198. Minister's power to amend the schedule of 199. Power of Minister to give exemption 200. Publication of Gazette notification, 201. Revocation, exemption and transitional 202. Survivorship rights, liabilities, etc., of another under the repealed Act, the FIRST SCHEDULE SECOND SCHEDULE of the THIRD SCHEDULE of the 17 laws of MALAYSIA Act 704 FINANCIAL SERVICES and SECURITIES ACT of LABUAN 2010 an act to provide for the licensing and regulation of financial services and securities in Labuan, the establishment of an Exchange and for other matters connected therewith.

[11 Feb 2010]



Enacted by the Parliament of Malaysia as follows: part I preliminary short title and commencement 1. (1) this Act may be cited as the financial services act and Labuan Securities 2010.

(2) of this Act come into force on such date as the Minister may, by notification in the Gazette.


Interpretation 2. (1) in this Act, unless the context otherwise requires — "actuary" means a person who is a Fellow of any professional associations listed in the second schedule or 18 laws of Malaysia ACT 704 a person recognized by the Board as an actuary for the purposes of this Act, which appears in the list of actuarial maintained by the Board;

"trust" means any trust established under the laws of Malaysia relating to the Labuan or the law of any country or jurisdiction is recognized for the purpose, or having the effect, to provide facilities for participation as a beneficiary under the trust in any profits or income arising from the acquisition, holding, management or disposal of any property;

"national language" means the Malaysian national language as defined in the national language Act 1967 [Act 32];

"bank Labuan" means a person licensed to carry on banking business of Labuan under part VI;

"Labuan investment bank" means a person licensed to carry on banking business Labuan investment under part VI;

"related", in relation to a corporation, means pertaining within the meaning of section 4 of the companies act of Labuan 1990 [Act 441];

"transacts securities" means, whether as principal or agent, make or offer to make with any person or induce or attempt to induce any person to make or offer to make — (a) any agreement for, or with a view to, acquire, dispose of, apply to buy, or underwriting securities; or (b) any agreement the meaning or purpose of diakuinya is to earn profit for the financial services and securities Labuan 19 any party of securities or by reference to fluctuations in value of the securities;

"public funds" means funds with other private funds;

"mutual funds" or "Fund" means a Labuan company, a corporation incorporated under the laws of any country or jurisdiction is recognised, a partnership, a protected cell company, a Foundation, or a trust that — (a) to collect and raise funds for the purpose of joint investments with the goal of distributing investment risk;
and (b) withdraw interest in mutual funds that mengehakkan the holder to redeem its investment agreed by the parties and receive an amount calculated by reference to the value of interest follow rates in whole or part of the net assets of the entity types mentioned earlier, as the case may be, and includes the umbrella fund interest in mutual funds or unit is divided into some number of different classes of Fund or funds to small and the members reserve the right to modify in one piece to the rights in the part that other;

"private funds" means funds with — (a) that its security is owned or held by — (i) not more than fifty investors who first investments every investor is not less than two hundred and fifty thousand dollars or such other amount as may be determined by the Board or equal value in any foreign currency; or 20 laws of Malaysia ACT 704 (ii) any number of investors first investment where investors is not less than five hundred thousand dollars or such other amount as may be determined by the Board or equal value in foreign currency; or (b) determined as a private fund under regulations made under this Act;

"debenture" includes stocks, bonds, notes, debentures and any evidence of indebtedness of a corporation for other borrowed money, whether or not stocks, bonds, notes, debentures and any evidence of indebtedness other constitute a charge on the assets of the Corporation, but shall not be construed as applicable to any of the following: (a) any instrument which confirms or creating indebtedness for , or for money borrowed to pay the consideration payable under a contract of sale or supply of goods, property or services or any rental contracts in the normal course of business;

(b) cheques, bank drafts or any other bills of Exchange or letter of credit;

(c) Note the bank guarantees or insurance policies;
(d) the statement, bank account books or other documents showing any balance in current accounts, deposits or savings;

(e) any agreement to get a loan if the lender and the borrower is signing the agreement and if borrowing money that is in the normal course of business the lender, and any promissory note issued under such agreement;
Financial services and Labuan Securities 21 (f) any instrument or product or class of instrument or product may be prescribed by the Board;

"established", relating to persons specified in the first column of the first schedule, has the meaning specified in the third column of the first schedule which are appearing with that person;

"constituent document" means the statutes, Charter, memorandum of Association and of Association, rules, by-laws, partnership agreement, or other instruments, under which or with it someone established and business scope, functions, powers and duties of the person described, whether contained in a single document or more;

"a licensed entity" means a person licensed or registered to conduct any activities under any part;

"Labuan licensed institution" means a person licensed to carry out financial business of Labuan under part VI;

"approved auditor" means a person approved by the Board of Auditors under section 10 of the companies Act 1990 Labuan;

"rules", in relation to a bursa established under Part IX, means the rules governing the conduct of the Exchange or its members;

"Labuan" means the Federal territory of Labuan;


"Board" means the Board of Labuan financial services established under section 3 of the Labuan Financial Services Act 1996 [Act 545];

"licence" means a licence granted or renewed under this Act;

22 laws of Malaysia ACT 704 "liability" includes every type of debt, duties and obligations, whether currently or in the future, or whether vested or contingent;

"Court" means a court having competent jurisdiction;
"Court" means the High Court or a high court judge;

"foreign currency" means any currency other than dollars;

"determine", if there is no way referred to, means determine from time to time in writing, and the power to determine which include the power to determine the different basis for different people or class, category or description of different people;

"set", if there is no way referred to, means set by order published in the Gazette, and the power to set includes power to make different provisions in the order for different people or class, category or description of different people;

"Minister" means the Minister charged with the responsibility for finance;

"country or jurisdiction recognized" means country or jurisdiction as determined by the Board;

"person" includes a corporation, a partnership, a group of persons, incorporated or unincorporated and a corporation sole;

"those who control", in relation to an applicant for a licence or entity licensed under this Act, means a person — financial services and Labuan Securities 23 (a) shall be entitled to exercise, or control the exercise of, not less than one-third of the vote tied with voting shares at the applicant or the licensed entity;

(b) have the authority to appoint, or cause to be appointed, the majority of the directors of the applicant or the licensed entity; or (c) has the authority to make, or cause to be made, the results with respect to the business or administration of the applicant or licensed entities, and to implement that decision or cause the decision was implemented;

"expert" includes any engineers, accountants, solicitors, valuers, auditors or any other person profession or reputation gives authority to a statement made by him;

"officer", in relation to a corporation includes — (a) a Director, Secretary or employee of the Corporation that includes the principal officer;

(b) a receiver and Manager of any part of the undertaking of the Corporation appointed under a power contained in any instrument; and (c) a liquidator of the Corporation appointed in a voluntary winding up;

but does not include — (A) a recipient who is not a Manager;
(B) a receiver and manager appointed by the Court; and 24 laws of Malaysia ACT 704 (C) a liquidator appointed by the Court or by creditors;

"the trust officer" means an officer of Labuan trust companies approved and determined to be an officer of the trust by the Board;

"authorized officer" means an officer duly authorized by the Board under subsection 3 (2);

"principal officer", in relation to a licensed entity, means a person, regardless of whatever name called, that is, responsible, subject to the authority of the Director, for business trips and the licensed entity administration;

"Office" includes principal place of business, branch, agency, business move, place of business established and maintained for a limited period of time only, electronic terminals and any other place of business;

"resident" means any person who — (a) in relation to a natural person, was a citizen or permanent resident of Malaysia; and (b) in relation to any other person, is someone who has established a place of business, and is operating, in Malaysia, and includes a person designated as the resident pursuant to section 43 * the Exchange Control Act 1953 [Act 17];

"licensee bank" means a bank Labuan or Labuan investment banks licensed under part VI;

* NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758].
Financial services and Labuan Securities 25 "licensee Malaysian bank" means a bank which is a licensee or a subsidiary of a bank Office of Malaysia;

"the insurance licensee" means a person licensed under part VII;

"Director", in relation to persons specified in the first column of the first schedule, has the meaning specified in the second column of the first schedule which are appearing with that person;

"Fund Manager" means a person who, for valuable consideration, provides management services only or together with investment advice or administrative service in respect of securities for the purpose of investment, including the quoted securities or any other activities as determined by the Board;

"keeper" means the person charged by a mutual fund for the care of the property of the Fund pursuant to this agreement to that effect;

"the Fund Administrator" means a person who, for valuable consideration, provides for mutual funds administrative services or facilities only or together with accountancy services;

"the establishment", in relation to — (a) the company means incorporation;
(b) statutory bodies, means the creation under laws that establish, appoint or membentuknya;

(c) cooperative means registration, incorporation or otherwise exist according to the law as a cooperative;

(d) partnership, including a limited partnership and limited liability partnerships, means the formation;
26 laws of Malaysia ACT 704 (e) sole ownership of the means of its business registration; and (f) any body, association or group of persons, whether incorporated or unincorporated, which require registration or any other form of recording or recognition under any law

legal writing before the body, association or other group of people that can start its activities with valid means of recording, registration or recognition under the written law;

"regulations" means regulations made under this Act;

"Corporation" means any body corporate established or incorporated or exists in Malaysia or outside Malaysia and includes the company's Labuan but shall not include — (a) a corporation sole;
(b) a trade union registered under any written law as a Trade Union; and (c) any association registered under any written law relating to co-operative societies;

"Declaration" means a statement of fact in writing the person who made it sign and declare as true before the Commissioner or an officer of a magistrate or a notary public;

"partnership" means a limited partnership or limited liability partnerships;

Labuan Securities and financial services 27 "limited liability partnership" means a limited liability partnerships formed under the Limited Partnerships and limited liability partnerships Labuan 2010 [Act 707], part X of the Financial Services Act and Labuan Islamic securities 2010 [Act 705], or under the law of any country or jurisdiction recognized notwithstanding any statutory definition to the contrary;

"limited partnership" means a limited partnership formed under the Limited Partnerships and limited liability partnerships Labuan 2010, part X of the financial services and Securities Act of Islam Labuan 2010, or under the law of any country or jurisdiction recognized notwithstanding any statutory definition to the contrary;

"the participants", relating to persons specified in the first column of the first schedule, has the meaning specified in the fourth column of the first schedule which are appearing with that person;

"home country supervision authority" means any authority or body in Malaysia or in any other countries that carry out the function of supervision over the operation of any of the licensed entity;

"prospectus" means any prospectus, notice, circular, advertisement or invitation which invites the application or offer to apply for a purchase or buy securities, or offer any securities to applied for purchase or purchased;

"record" means a facility for the storage of information that can be recovered or produced back then;

"ringgit" means ringgit in Malaysia;

"securities" means any investment which is usually known or can be described as security, and includes — 28 laws of Malaysia ACT 704 (a) shares, debentures, stock, funds, interests in a partnership or limited partnership or limited liability company, trust or Foundation or a protected cell company or Corporation;

(b) debentures, bonds or notes of, or issued by any body (incorporated or unincorporated), Government, local government or authority;

(c) the certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant to apply for purchase or buy any of the investments described in paragraphs (a) and (b); and (d) securities as defined in the financial services and Securities Act of Islam Labuan 2010;

"subsidiary" shall have the meaning assigned to it under the companies act of Labuan 1990;

"Labuan trust company" means a person licensed to conduct business trust companies under section 61 and 71;

"private Labuan trust company" means a company's Labuan Labuan company or foreign business trust company for a private trust and is registered with the Board in the bottom of Division 4 of part V;

"foreign companies" means — (a) a company, Corporation, organization, association or other body incorporated outside Malaysia; or (b) an organization, association or other body incorporated under the law of the place may sue or be sued against him, or hold property in the name of Secretary Securities and Labuan financial services or other organizations 29, association or body that appointed accordingly for the purpose, and that does not have a head office or principal place of business in Malaysia;

"domestic company" means a company incorporated under the companies Act 1965 [Act 125];

"Labuan company" has the meaning assigned to it in the companies act Labuan 1990;

"Labuan foreign company" means a foreign company registered under part VIII of the Labuan 1990;

"holding company" has the meaning assigned to it in the companies act Labuan 1990;

"protected cell company" means a company incorporated, or converted into a protected cell companies, according to the provisions of Division VIIIB Of Labuan 1990 or any similar entity established under the laws of any country or jurisdiction recognized notwithstanding any statutory definition to the contrary;

"financial year" means the period not exceeding fifty three weeks that in the end the balanced fund account balance or, if the account of the Fund could not be balanced or if the period of fifty-three weeks to do so is exceeded, calendar year;

"bye-laws" means the terms written with reference to her Committee regulate its own procedure and include any term that applies as set out in the memorandum and articles of Association of an Exchange established under this Act;

"Foundation" means a foundation established under the Labuan Foundation 2009 [Act 706], part XI of the Act Services 30 laws of Malaysia ACT 704 Labuan Islamic financial and Security 2010 or any similar linked entities established under the laws of any country or jurisdiction recognized notwithstanding any statutory definition to the contrary.

(2) any reference in this Act of "this Act" shall, unless otherwise expressly stated, be deemed to include a reference to any regulations, rules, orders, notifications or other subsidiary legislation made under this Act.

(3) Notwithstanding the definition of "securities" under this Act and

"interest" as defined in section 66 of the companies Act 1990 Labuan, the Minister may, on the recommendation of the Board, fixing any instrument or product or class of instrument or product as security for the purposes of this Act and the Labuan financial services Board Act 1996.


Administration of Act 3. (1) the Board is responsible for the proper administration of this Act, subject to the direction and control of the General Minister.

(2) the Board may authorize any member or officer to perform any of its functions, exercise any of its powers or perform any of its obligations under this Act.

(3) subject to such limitations, if any, as may be prescribed, an authorized officer shall perform all functions, exercise all the powers and perform all the duties of the Board as authorized and every function is executed, the powers and duties of such wishes shall be deemed to have been implemented, carried out and fulfilled for the purposes of this Act.

Labuan Securities and financial services 31 (4) all courts, judges and those who acted in judicial shall give judicial notice of the seal and signatures of the Board.


People who are fit and proper person 4. (1) every licensed entities shall ensure that its directors, principals and senior officers, if applicable, his trust remained a person fit and proper during their appointment with the licensed entity.

(2) If a Director, officer or principal officer of the trust, if applicable, no longer a fit and proper person, licensed entities and principal officer or Director, officer of the trust, where applicable, shall as soon as reasonably practicable, notify the Board in writing about it, together with the details of those changes.

(3) in determining whether a person is fit and proper person under this Act, the Board may take into account the following: (a) the integrity, efficiency, ability to think wisely and the financial position of that person;

(b) whether the person has been sentenced bankrupt, whether in Malaysia or elsewhere;

(c) whether the person has been convicted of a criminal offence in Malaysia or elsewhere and if the penalty imposed is imprisonment for one year or more, either by itself or in addition to a penalty; and (d) any other criteria set out in the guidelines issued by the Board.
32 laws of Malaysia ACT 704 (4) a person is obliged to give written notice to the Board, as soon as practicable, of any occurrence of material that can be reasonably expected to affect its status as a fit and proper person.

(5) If the Board is satisfied that a person is not fit and proper person, the Board may disqualifying the person from acting upon its properties as Director, principal officer or an officer of the trust, as the case may be, for the licensed entity.


Business in, from or through Labuan 5. (1) any person licensed to conduct any activity under this Act shall be carried out only in, from or through Labuan except that the licensed entity may conduct any business in Malaysia outside Labuan as permitted by the Board from time to time: provided that nothing-nothing in this section permits an entity licensed to carry out any activity regulated under the capital markets and Services Act 2007 [Act 671] , if the regulated activity is carried out in Malaysia in addition to Labuan.

(2) Notwithstanding subsection (1), a mutual funds, a Fund Manager and an administrator of funds established, licensed or registered, as the case may be, under section III shall be deemed to be carrying on business in Labuan although that business conducted wholly outside Labuan or Labuan outside of a place of business or registered office in Labuan and the phrase "carrying on business from Labuan" includes doing business outside of Labuan from a place of business or registered office in Labuan.



Financial services and Labuan Securities Shariah Matters 33 6. Any person — (a) intending to make an offer for subscription or purchase, or offer the invitation to apply for the purchase or purchase, securities in or from the Labuan;
or (b) carry out any business regulated under Parts III, IV, VI, VII and X, which expressly in line with Shariah principles shall comply with the applicable provisions of the financial services and Securities Act of Islam Labuan 2010 and in doing so, shall be deemed to have complied with all applicable laws in Labuan in relation to that matter.

PART II CHAPTER 1 PRELIMINARY Interpretation SECURITIES 7. (1) in this part, unless the context otherwise requires — "the company of the borrower" means a Labuan company which is or will be under a liability, whether or not the liability at the present time or in the future, to repay any money received or receivable by it as a response to an offer made under section 8 to apply for the purchase or purchase debentures of the company Labuan;

34 the laws of Malaysia ACT 704 "company guarantor", in relation to the borrower's company, means a corporation that has been guaranteeing, or has agreed to guarantee, refund any money received or receivable by the company of the borrower as a response to an offer made under section 8 to apply for the purchase or purchase debentures of the company of the borrower;

"sponsor", in relation to a prospectus issued by or relating to a company of Labuan, the company sponsors means a party in the preparation of the prospectus or any part thereof that are relevant, but shall not include any person who merely act upon his professional nature or on its properties as an advisor; and "secured debenture" means — (a) any debenture stated on his face as a secured debenture; and (b) any debentures issued on terms that give the holder of debentures of, the rights and the power to vote and demand a poll in respect of business and undertaking of the company, either

In addition to the rights of members of the company or in lieu of any such right.

CHAPTER 2 offers an offer or invitation which requires Board approval 8. (1) subject to subsection (2) to (6), a person, his officers, directors, agents or any other person on his behalf, may not make an offer to apply for a purchase or buy, or issue an invitation to apply for Securities and Labuan financial services 35 purchase or purchase of securities or from in Labuan without prior written approval of the Board.

(2) no offer or invitation to apply for purchase of debentures, or to deposit money with or lend money to a company or a company's Labuan Labuan foreign, can be made to a resident of Malaysia, except by a holder of a licence bank unless otherwise authorized in writing by the Board.

(3) an applicant shall submit to the Board any document and any other information relating to the offer or invitation in accordance with such form and manner and at any time required by the Board.

(4) where an application has been made to the Board under this section, the Board may — (a) approval of an offer or invitation with or without variation and subject to such terms and conditions as he thinks fit; or (b) refuse an offer or invitation.
(5) an offer or invitation the following securities are exempt from the requirement to obtain the approval of the Board under subsection (1): (a) offer or the offer of securities, if — (i) an offer or invitation is directed to a category of people who can be identified to which the offer or the offer is communicated directly by the person making the offer or invitation or by agents who he appointed;
or 36 laws of Malaysia ACT 704 (ii) only members in that category to which the offer or the offer is made are persons who may receive an offer or invitation, and they have enough information to allow a reasonable assessment of the offer or invitation, and the number of persons to whom an offer or invitation is presented not more than fifty;

(b) an offer or invitation debentures, if — (i) the first time every holder of debentures beginning is no less than two hundred and fifty thousand ringgit or the same number in any other currency and they had enough information to allow a reasonable assessment of the offer or invitation; or (ii) the investment the first time every Member debentures beginning is less than two hundred and fifty thousand ringgit or the same number in any other currency and the number of persons to whom an offer or invitation is presented not more than fifty and they had enough information to allow a reasonable assessment of the offer or invitation;

(c) an offer or invitation of securities in a mutual funds that meet the needs of mutual funds under part III;

(d) an offer or invitation of securities pursuant to a take-over offer that complies with relevant laws applicable to the offer; and Labuan Securities and financial services 37 (e) an offer or invitation securities or any class or category of securities is determined by the Board.

(6) any determination or determination-determination made under paragraph (5) (e) shall be subject to any conditions, restrictions or limitations imposed by the Board.

(7) any person making an offer or invitation of securities berlanggaran with subsection (1) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.

(8) a person who is not a licensee of the bank and make such an offer or invitation under subsection (2) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


False or misleading statements 9. (1) where any statement or information are required to be submitted to the Board in connection with any offer or invitation of securities made pursuant to subsection 8 (3), an applicant and any authorized officer may not — (a) submit or cause to be presented any statement or information is false or misleading;

(b) submit or cause to be presented any statement or information that has a material omission; or (c) engage in or assist or menyubahati behaviors he knows is misleading or 38 laws of Malaysia ACT 704 deceptive or likely to mislead or deceive the Board.

(2) be a defence against prosecution or any proceedings for a violation of subsection (1) if it is proved that the defendant, after making a reasonable inquiry in circumstances that, having reasonable grounds to believe, and has trust until the time the statement was made or the information given or the behavior is done believe that — (a) a statement or information that is true and not misleading;

(b) the omission is not material;
(c) there is omission of a material; or (d) the behavior in question is not misleading or deceptive.

(3) any person who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Ad 10. (1) no advertising offers, or exciting attention to an offer or bid for re, securities under subsection 8 (1), which is the offer of securities that are not exempted under subsection 8 (5), for publication in Labuan until the ad was approved by the Board.

(2) an application for approval for an ad must be submitted to the Board together with a copy of the financial services and Labuan Securities 39 the ads according to verified any manner directed by the Board.

(3) any person who publish or cause to be published in Labuan an advertisement without first obtain the approval of the Board commits an offence and shall, on conviction, to a fine not exceeding ten thousand

ringgit.


Registration of prospectus 11. (1) subject to subsection (2), one cannot publish, offer to purchase or purchased over-the-counter, making the invitation to apply for securities purchased, purchase or in or from the Labuan unless a prospectus relating to the offer or invitation that has been registered with the Board.

(2) the requirements under subsection (1) shall not apply if an offer or invitation is made pursuant to or in connection with an offer or invitation which are exempted under subsection 8 (5).

(3) the Board may not register the copy of any prospectus — (a) if the prospectus contains any statement or matter which in his opinion is misleading in terms of the nature and context of the statement included; and (b) unless — (i) a copy of the signed by every Director and every person whose name there is an attached as Director for the Corporation or the operator in the case of public funds which apply for registration under section 31 or by agent 40 laws of Malaysia ACT 704 their duly authorised in writing submitted to the Board on or before the date of its production;

(ii) the prospectus appears to comply with the requirements of this Act and the regulations or the Board is satisfied that any deviation from the requirements of this Act or the regulations by the prospectus that is appropriate and is not likely to confuse someone who invest based on faith in the contents of the prospectus; and (iii) was also submitted to the Board — (aa) in the case of a prospectus relating to public funds — (i) a certificate from a certifying that the prospectus complies with the requirements of part III; and (ii) if all or any part of the prospectus, it is not in the national language or in English, a translation of the prospectus or any part of the prospectus in the national language or English, which is verified by the satisfaction of the Board;

(bb) in the case of any other, a copy of the prospectus, which verified as determined, any consent required by section 13 for the production of financial services and securities prospectus Labuan 41 and any material contracts referred to in the prospectus or, in the case of any such contract is not in writing, a memorandum giving full particulars thereof, which verified as specified.

(4) If a prospectus is issued without a copy of such a corporation is registered and every person with disedarinya become a party in the production of the prospectus commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.

(5) in relation to a prospectus relating to a public fund, the prospectus shall, in addition to — (a) to expose the complete, true and clear on all the facts and circumstances that can facilitate a person's potential investors make a reasonable assessment in determining whether to buy or apply for purchase of shares of a public funds;

(b) contain a summary statement on the rights of the investor under section 36; and (c) if the public funds that have been in operation for a complete financial year, accompanied by or contain references about the availability of the financial statements for the financial year that public funds, which immediately before the date of the offer and the Auditors ' reports thereon.

(6) if — 42 laws of Malaysia ACT 704 (a) any changes occur that affect materially any required so disclosed under subsection (5); or (b) there had been a material change that affects the matters disclosed in the prospectus, then the Fund Manager for the public fund or sponsor, as the case may be, shall, within thirty days from the occurrence of the change include the changes in the prospectus relating to the offer or public funds pursuant to subsection 8 (1) and give a copy to each of the investors and to the Board.


Documents containing the offer of securities shall be made by the Labuan trust companies or licensees of the bank and shall be deemed to be a prospectus 12. (1) where a Corporation be apportioned or issue or agree to be apportioned or issue any securities to any person under subsection 8 (1), and if such an offer is not excluded under subsection 8 (5), an offer or invitation of the securities shall be made through his agent to be trust companies in Labuan or licensee bank.

(2) any document that through it the offer under subsection 8 (1) is made shall for all purposes be deemed to be a prospectus issued by the Corporation, and all written law and the pillars of law about the contents of the prospectus and of liability in respect of advertisements and statements and ketidakdedahan in the prospectus, or otherwise relating to prospectuses, shall apply and have effect accordingly as if the securities were offered under subsection 8 (1) and as if the person to whom the offer in respect of any of the securities is the applicant bought for him but without prejudice to the liability, if any, financial services and Labuan Securities 43 person making the offer in respect of representation or ketidakdedahan in the document or otherwise.

(3) for the purposes of this Act, unless the contrary is proved, shall be evidence that an allotment, or an agreement to be apportioned, security has been made by a corporation with a view to offering the securities under subsection 8 (1) if indicated — (a) that an offer of securities under subsection 8 (1) has been made within six months after the allotment or agreement to be apportioned it;
or (b) that at the date of offer of securities under subsection 8 (1) is made, the total of the consideration to be received by the Corporation in respect of the securities has not received such.

(4) the requirements of this section of the prospectus shall have effect as if the person making the offer is intended by this section is a person named in a prospectus as directors of a corporation.


(5) in addition to other requirements in compliance with this part, that participate in the tender documents shall state — (a) the net amount of the consideration received or receivable by the Corporation that made the offer in respect of securities which are intended by the offer; and (b) the place and time for the contract under which the securities have been or will be assigned may be inspected.

(6) If an offer is intended by this section to be made by the Corporation, is sufficient if the documents referred to 44 laws of Malaysia ACT 704 in subsection (1) was signed on behalf of the Corporation by two directors of the Corporation and any such Director may authorize its agent in writing to sign on his behalf.


The agreement of the expert on the production of the prospectus containing statement by him 13. (1) a prospectus inviting application for purchase or purchase of securities of a corporation and includes a statement purporting to be made by an expert or as based on a statement made by an expert shall not be issued unless there is in the prospectus a statement that the expert has given and has not withdrawn such consent.

(2) if any prospectus is issued by a corporation berlanggaran with this section, the Corporation and every person with disedarinya to become a party to the issuance of the prospectus commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or both of each.


Civil liability due to erroneous statement in the prospectus 14. (1) subject to this section, every person who follows shall be liable to pay compensation to all persons who apply to buy or purchase any securities based on faith in a prospectus for any loss or damage suffered by reason of a statement not true it, or by reason of the ketidakdedahan deliberately it about any matter that in his knowledge and that he knows is material, that is every person who — financial services and Labuan Securities 45 (a) is an independent at the time of the issuance of the prospectus;

(b) allow or cause to himself named and has been named in the prospectus as a Director or as an agreed to become a Director either immediately or after an interval of time;

(c) is a sponsor of the Corporation; or (d) allow or cause the production of the prospectus.

(2) Notwithstanding anything in subsection (1), if the consent of experts required for the issuance of a prospectus and he has given that consent, he may not be alone-points by virtue of the agreement be liable as a permit or cause the production of the prospectus except in respect of an untrue statement to be made by him as an expert, and inclusion in the prospectus is the name of a person as a trustee for holders of debentures Auditors, bankers, barrister, advocate or solicitor or stockbroker or share shall not be simply because for that reason only be construed as a consent by that person for the issuance of the prospectus.

(3) No person shall be liable under subsection (1) if he proves — (a) that, after giving consent to become a Director of the Corporation, he has to withdraw consent prior to production of the prospectus, and that the prospectus was issued without permission or consent;

(b) that the prospectus was issued without his knowledge or consent and that he had 46 laws of Malaysia ACT 704 immediately give public notice of a reasonable about it once he's aware of the prospectus production;

(c) that after the issuance of the prospectus and before allotment or sale underneath him, once aware of any statement is not true in the prospectus, has withdraw consent and gave reasonable public notice of the withdrawal and the reasons therefor; or (d) that — (i) in respect of every statement not true not purporting to be made on the truth of an expert or a public official documents or statements, he has reasonable grounds to believe, and has trust until the time allotment, publication or sale of the securities that the statement is true;

(ii) in respect of every untrue statement purporting to be a statement made by an expert or based on a statement made by an expert or contained in what purports to be a copy of or extract from a report or valuation of an expert, it's true-true depiction of the statement, or a copy of the true and clean an extract of the report or the assessment , and he has reasonable grounds to believe, and has trust until the time the prospectus, that production specialist who made the statement to make it and that the experts have given the consent required by section 13 of the Securities and Labuan financial services 47 production the prospectus and has not withdrawn such consent before a copy of the prospectus sent submit to registration or , in the knowledge that person, before any allotment, publication or sale under the prospectus; and (iii) in respect of every untrue statement purporting to be a statement made by an officer or official contained in anything in the form of a copy of or extract from a public official document, it is a correct and accurate picture of the statement or copy of or extract from the document.

(4) subsection (3) does not apply in the case of a person who is liable, because he has given the consent required from him by section 13 as one that has allowed or caused the issuance of prospectus in respect of an untrue statement purporting to be made by him as an expert.

(5) any person other than this subsection shall also be liable under subsection (1), because he has given the consent required from him by section 13,

as someone who has allowed the production of a prospectus in respect of an untrue statement purporting to be made by him as an expert wouldn't be so liable if he proves — (a) that, after giving consent under section 13 of the issuance of the prospectus, he had to withdraw that consent in writing before a copy of the prospectus submitted to the Board;

(b) that, after a copy of the prospectus and submission to the Board before publishing or sale of 48 laws of Malaysia ACT 704 under the prospectus, he has, once aware of the untrue statement, withdraw consent in writing and gave reasonable public notice of the withdrawal and the reasons therefor; or (c) that he was competent to make that statement and that he has reasonable grounds to believe and have believed up to the time of publication or sale of the securities that the statement was true.

(6) if — (a) a prospectus bearing the name of a person as a Director of a corporation, or as having agreed to become a Director, and he does not give consent to become a Director, or he has to withdraw consent prior to the issuance of the prospectus, and has been disallowed or give consent for the issuance of the prospectus; or (b) the consent of a person is required under section 13 for the issuance of prospectus and he either had the agreement does not give or has to withdraw the consent prior to production of the prospectus, the directors of the company except for any Director who without the knowledge or consent of the prospectus is issued, and any others who allow or cause the issuance of the prospectus, shall be liable to indemnify the named or consent so required against all damages , costs and expenses which he may be liable as a result of his name are included in the prospectus or the inclusion of a statement purporting to be made by him as a financial services and Labuan Securities specialist in the prospectus 49, or in defending itself against any action or legal proceedings brought against him concerning it.


Criminal liability because of a mistaken statement in the prospectus 15. (1) where in any prospectus, or in any type of advertisements referred to in section 10, there is a statement not true or ketidakdedahan accident, any person allowing or causing the production of prospectuses or advertising commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or both, unless he proves that the statement or ketidakdedahan is immaterial or that he had reasonable grounds to believe and have believed until the time of the issuance of the prospectus, that the statement was true or ketidakdedahan is not material.

(2) a person shall not be deemed to have allow or cause the issuance of a prospectus simply because she gave the consent required by this Chapter for the inclusion of a statement purporting to be made by him as an expert into the prospectus.


Labuan trust companies or licensees of the bank as agent for the offer of 16. (1) No allotment or publication of any of the securities of a corporation which offered under subsection 8 (1), which is the offer of securities that are not exempted under subsection 8 (5), may be made unless the securities have been offered through a Labuan trust company or licensee of the bank.

50 laws of Malaysia ACT 704 (2) for the avoidance of doubt, a Labuan trust company or licensee of the bank shall be the agent of a corporation that offers of securities under subsection 8 (1) through the Labuan trust companies or licensees of the bank to accept an application for the issue of such securities and shall be described in the prospectus.

(3) all money due upon the application of the securities of a corporation shall be paid to the Labuan trust companies or licensees of the bank acts as an agent for the Corporation, and pending the receipt of the amount of the minimum payment due by the Labuan trust companies or licensees of the bank, it shall hold all money received by him on trust for the applicant, and if the amount of the minimum payment is not received by the Labuan trust companies or licensees of the bank within the time specified in the the prospectus, Labuan trust company or licensee the bank shall, subject to any right under the terms of the prospectus to deduct any costs and charges due to it or to the Board relating to prospectuses or the offer or his actions as a broker in the matter, refund such application or part thereof which is remaining after the cut has been made, if any, in accordance with the terms of the prospectus to applicants pro rata based on their respective amounts paid by them.

(4) when the Labuan trust companies or licensees bank acting as agent of a corporation receiving the minimum payment amount on behalf of the Corporation, Labuan trust companies or licensees of the bank shall be subject to a right to deduct the remuneration and expenses that should have been out of the money, holding the money and any further application money as agent of such Corporation.




Financial services and Labuan Securities 51 Prohibition allotment unless minimum payment received 17. (1) No allotment or publication of any of the securities of a corporation which offered pursuant to subsection 8 (1), which is the offer of securities that are not exempted under subsection 8 (5), may be made unless — (a) the minimum fees paid; and (b) the amount of money payable on application security requested the purchase has been received by the Corporation, but if a cheque for the amount of the money due has been received by the Corporation, the amount of money shall be deemed to have not received by the Corporation until the cheque is paid by the bank that issued it.

(2) the minimum payment shall be —


(a) is calculated based on the price at which the securities are offered or will be offered; and (b) calculated regardless of any amount due in addition to cash.

(3) the amount payable upon the application of each of the securities offered shall be not less than five per cent of the price at which the securities are offered or to be offered.

(4) any condition requiring or binding any applicant for securities so as to waive compliance with any requirement of this section shall be invalid.

(5) no Corporation may publish or be apportioned, and no officer or sponsor a corporation can allow or permit so issued or allotted, 52 laws of Malaysia ACT 704 securities under subsection 8 (1) based on a prospectus after the expiry of six months from the issuance of the prospectus.

(6) any person who contravenes this section commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Money application should be held on trust until the publication or allotment 18. (1) subject to subsection 16 (3) and (4) and subsection 17 (1), all the money of the application and other money paid prior to publication or allotment of any applicant for the securities offered under subsection 8 (1) by a corporation, shall, until publication or allotment of securities is made, held upon trust for the applicants and the money shall be paid into and held in a separate trust account , pending publication or the allotment.

(2) in the event of default in compliance with this section, every officer of the Corporation that defaults and that with disedarinya and knowingly permit or allow the default commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.

3 TERM of authority to issue debentures DEBENTURES 19. (1) subject to these Terms and the terms and conditions of the memorandum and perkaranya, something the company's Labuan financial services and securities shall Labuan 53 has the power to issue debentures upon such terms and conditions as he may think fit and in particular, but without limiting the generality of the previous, can issue debentures — (a) on which a charge on any or all of the assets of the company;

(b) that can be changed from the debentures to shares in the company; or (c) as a secured debenture.
(2) the debt due under any debentures, whether sealed or signed on behalf of the company, shall be a special debts of the company, and if the debentures issued by the branch of a company, shall be located in the branch.

(3) the Minister may make regulations — (a) restrict the right of a Labuan company or any particular class of Labuan company to issue debentures convertible into shares; and (b) prescribing the terms and conditions or events or events with which conversion to be or can be done.


Trustee for holders of debentures of 20. (1) every company Labuan offering debenture under subsection 8 (1), which is the offer of debentures which are not exempted under subsection 8 (5), shall make provision in such debentures, or in a trust deed relating to the debenture, for the appointment of a Labuan trust company as trustee for holders of debentures.
54 laws of Malaysia ACT 704 (2) a company borrower cannot be apportioned any debentures until a Labuan trust company was appointed as trustee for the holders of the debentures.

(3) the Board may approve any other person to act as trustee along with Labuan trust companies for the debenture holders.

(4) in the event of default by a company borrower in compliance with this section, the company of the borrower and every officer of the company of the borrower in default commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Waiver and indemnity the Trustees from liability 21. (1) subject to this section, the terms, provisions or covenants of a debenture or deed a contract terms with holders of debentures secured by a trust deed shall be invalid in so far as the terms, provisions or covenants, as the case may be, will have the effect of — (a) to exempt the trustee from liability for violating any provision of this part or for breach of trust or for not showing the level of care and effort required of it as a trustee;

(b) to indemnify a trustee of liability for violating any provision of this part or for breach of trust or for not showing the level of care and effort required of it as a trustee, financial services and Labuan Securities 55 unless the terms, provisions or covenants that — (A) discharge the trustee from liability because of anything done or not done before the release is given; or (B) allow a debenture holder meetings to approve the release of a trustee from liability because of anything done or not done before the release is given.

(2) for the purposes of paragraph (1) (B) — (a) a release approved if holders of debentures of, who voted for the resolution that holds as many as seventy-five percent of the nominal value of debentures held by all holders of debentures that are present at the meeting and to vote on such a resolution; and (b) a holder of debentures of, present at the meeting and voting on the resolution that if — (i) the holder of the debenture be personally present at the meeting and to vote on such a resolution;
or (ii) If a proxy is granted, the holder of the debenture was represented at the meeting by a proxy and the proxy vote to the ruling.


Duty of trustee 22. (1) the trustee for holders of debentures of — (a) shall exercise reasonable efforts to determine whether or not the company's assets of the borrower and the guarantor, every company that is or is likely to

56 laws of Malaysia ACT 704 there either as security or otherwise, sufficient, or is likely to be or would be sufficient, to explain the principal debt if and when the debt is payable;

(b) shall be to his satisfaction that every prospectus relating to the debenture does not contain any item that is not in accordance with the terms of the debenture or deed of trust related;

(c) shall exercise reasonable efforts to determine whether or not the borrower companies and each company the guarantor has committed any breach of the terms, provisions or covenants debentures or the trust deed;

(d) unless it is satisfied that the breach of the terms, provisions or covenants debenture or deed of trust that will not materially prejudice the security, if any, for debentures or debenture holder's interest, shall take all steps and do all things which it is authorised to do to cause the company the borrower and any guarantor meremedikan any breach of the terms, provisions or the Covenants;

(e) if the company of the borrower or any guarantor, when so required by the trustee, not meremedikan any breach of the terms, provisions or covenants debenture or deed of trust that, should present the matter at the meeting of debenture holders, submit any suggestions for protecting their investments as may be deemed necessary and appropriate by the trustee and the debenture holder instructions thereto; and Labuan Securities and financial services 57 (f) if the borrower's company submit to holders of debentures of such a compromise or arrangement, shall give them a statement that describes the effect of the compromise or arrangement and, if he thinks fit, recommend to them a trip that appropriate action to be taken by them in connection with it.

(2) If, after reasonable investigation, trustee for holders of debentures at any time are of the opinion that the company's assets of the borrower and guarantor of any company that is or ought to have, whether as collateral or otherwise, insufficient or might not be sufficient to explain the principal debt if and when the debt to be paid, the trustee can submit an application in such form as may be determined by the Board to seek a direction under this subsection and the Board may , on the application, after giving the company the borrower the opportunity to make representations in respect of the application, through written instructions delivered to the borrower in the registered office in Labuan, impose any restrictions on the activities of the companies of the borrower, including restrictions on advertising to get the deposits or loans and borrowings by the company of the borrower, as may be deemed necessary by the Board to protect the interests of holders of debentures , or the Board may, and if the lenders require such company shall, direct the trustee to submit an application to the Court for an order under subsection (4) and the trustee shall apply accordingly.

(3) where — (a) after reasonable investigation, trustee for holders of debentures at any time are of the opinion that the company's assets of the borrower and guarantor of any company that is or is supposed to have inadequate, or might not be enough, for the 58 laws of Malaysia ACT 704 explains the principal debt if and when the debt is payable; or (b) the company has contravenes or fails to comply with a direction made by the Board under subsection (2), the trustee may, and if the borrower company has requested the trustee to do so, the trustee shall, apply to the Court for an order under subsection (4).

(4) where an application is submitted by the trustee to the Court under subsection (2) or (3), the Court, after giving the company the borrower the opportunity to be heard, may, by order, do all or any of the following matters, that is to say — (a) direct the trustee so that calling a meeting of the debenture holders for the purpose of presenting in front of them any information relating to their interests as may be deemed necessary or appropriate by the trustee and for the purpose of getting their instructions thereto , and provide any instructions relating to the conduct of the meeting as the Court may think fit;

(b) withhold all or any action or proceeding before any court by or against the company of the borrower;
(c) prevent the payment of any money by the company of the borrower to holders of debentures of the company or the borrower to any debenture holders of that class;

(d) appoint a receiver of any property that is collateral, if any, for such debentures or any part thereof; or the Securities and Labuan financial services 59 (e) provide any further instructions from time to time as may be necessary to protect the interests of holders of debentures of the company, a member of the borrower or any guarantor or the public, but in making any such order of the Court shall take into account the rights of all creditors of the borrower company.

(5) the Court may vary or revoke any order made under subsection (4) as he may deem fit.

(6) a trustee at made any application to the Board or the Court shall take into account the nature and type of collateral given current debentures that offered under subsection 8 (1), and, if there is no collateral given, shall take into account the position of the holder of the debentures as unsecured creditors of the borrower.

(7) a trustee may rely on any certificate or report given or statement made by any advocate, auditor or officers of the company or the guarantor of the borrower company, if the trustee has reasonable grounds to believe that the advocate, auditor or the officer competent to give or make recommendations, reports or the statement.

(8) this section shall not apply to an offer or invitation of securities under subsection 8 (5).


Obligations of the directors of the borrower


23. (1) Directors of the borrower shall — (a) at the end of a period not exceeding three months which ended on a day, not later than the date of the prospectus may be, if any, or the date of debenture 60 laws of Malaysia ACT 704 issued pursuant to a deed of trust, the trustee for holders of debentures of the company of the borrower is required to notify the company of the borrower in writing; and (b) at the end of each subsequent period thereafter, i.e. a period of three months or such shorter time as may be allowed by the trustee in such special circumstances, provide a report in relation to the period and which comply with the requirements of subsection (2) and, within thirty days after the end of each period, submit a copy of the report relating to that period to the Board and to the trustee.

(2) the report referred to in subsection (1) shall be signed by not less than two directors on behalf of all the directors and shall state in detail any prejudice the security or the interests of holders of debentures and, without prejudice to the generality of the previous, shall state — (a) whether or not the company limit the amount that the borrower can borrow has been exceeded;

(b) whether or not the borrower companies and each company the guarantor has follow and implement all the provisions and covenants governing their respective through or in debentures or any deed;

(c) whether or not any event has occurred which causes or may cause the debentures or any provisions of a deed of trust may be enforceable and, if so, details of the incident;
Financial services and Labuan Securities 61 (d) whether or not any circumstances touch the borrower company, its subsidiaries or its guarantor or any of them have occurred that materially affect any mortgage or charge created by debentures or of any trust deed and, if so, details of the circumstances;

(e) whether or not there have been any substantial changes in the nature of business of the borrower company or any of its subsidiaries or any guarantor since the first debentures issued under subsection 8 (1) previously not reported as required by this section and, if so, details of the change; and (f) if the borrower's company has been depositing money with, or lend money to, or assume any liability, a Corporation pursuant to section 4 of the companies Act 1990 Labuan deemed related to the borrower company, details of — (i) the total amount that has been deposited or lent such and extent of any liability that has been acquired within the period covered by the report; and (ii) the total amount owed to the borrower in respect of the money has been deposited or lent such and extent of any liability that has been taken over in such a way at the end of the period covered by the report, with the distinction between deposits, loans and acquisition liabilities secured by unsecured, but excluding any deposits with or loans to or any liabilities acquired on behalf of a corporation if 62 laws of Malaysia ACT 704 of the Corporation have guarantee payment back the borrower debentures of the company and have the bail with a charge on its assets for the benefit of the trustee for holders of debentures of the company of the borrower.

(3) if there is a trustee for holders of any debentures issued by a company of the borrower, the borrower companies and each company sureties have guarantee the repayment of money that have been diperdapatkan through the issuance of debentures shall, within twenty-one days after the creation of the charge, giving the Trustees on behalf of the debenture holders, whether or not any claim shall have been made , a written particulars of any charge created by the Corporation or its guarantor, as the needs of the situation, and when the amount to be advanced on bail of charges is not specific within seven days after the advance, details about the amounts or the amounts actually first, but if any such advances be automatically combined in a current account with bankers or trade, is sufficient for details of the net amount outstanding in respect of any advances is given every three months.

(4) the Director of every company borrowers had issued debentures under subsection 8 (1), excluding those excluded under subsection 8 (5), and Director of every company guarantor who have guarantee the repayment of money that diperdapatkan through the issue of debentures shall, on a date not later than nine months after the expiry of each financial year of the company of the borrower, or the guarantor company, cause to be made and delivered to the Board and to the trustee of a profit and loss account together with a detailed statement on the outstanding liability under the debentures for the period starting from the end of the financial year until the expiration of six months after the end of that financial year and a balance sheet as at the end of the period of intended by the profit and loss account.

Labuan Securities and financial services 63 (5) where any guarantor, a company incorporated in any State or territory that is named for the purposes of this section by the Minister, handed over to the relevant authorities in any State or territory that is named is a profit and loss account and balance sheet for the period in question, it shall be sufficient compliance with the requirements of subsection (4) if , with the consent of the Trustees, submission to the Board and a trustee of the certified copies of the profit and loss account and the balance sheet submitted the same.

(6) If a Director of a company borrower does not deliver to the trustee a report as required under subsection (1), or if a Director of a company of the borrower or the guarantor not directors of the company

submit to the Board and a trustee of the profit and loss account, detailed statement and balance sheet as required under subsection (4) within the time specified that, the trustee shall, as soon as possible, submit notice of that fact to the Board.

(7) any person who contravenes subsection (1) or (4) commits an offence and shall, on conviction, to a fine not exceeding ten thousand ringgit.

(8) this section shall not apply to an offer or invitation of securities under subsection 8 (5).


The company's obligation of the guarantor to provide information 24. (1) for the purposes of the preparation of any report required by this Act that was signed by or on behalf of the Director of a company of the borrower or any of them, the company of the borrower may be, by notice in writing, require any guarantor company that gives it any information relating to the company's guarantor is required by this Act so contained in the report, and its guarantor 64 laws of Malaysia ACT 704 shall provide that information to the borrower before a date , which is a date not later than fourteen days after the notice is given, as specified in that behalf in the notice.

(2) a surety company that does not comply with the requirements contained in the notice given under subsection (1) and every officer of the company who is in default commits an offence and shall, on conviction, to a fine not exceeding ten thousand ringgit.

(3) this section shall not apply to an offer or invitation of securities under subsection 8 (5).


Loan and deposit shall be refunded immediately upon the occurrence of certain 25. (1) where in any prospectus issued in connection with an offer or invitation under subsection 8 (1) to apply for a purchase or purchase debentures of a Labuan company there is a statement about any purpose or specific project for which money received by the borrower company as the response to an offer or invitation is to be used, the company of the borrower shall from time to time report to the trustee for holders of debentures of the company that the borrower of the progress that has been made towards achieving the
that purpose or complete the project.

(2) if it appears to the trustee to whom a report given by the company of the borrower that the purpose or project that has not been achieved or completed in the time specified in the prospectus in which the purpose of the project or want to be achieved or completed or, if no time is so specified, within a reasonable time, the trustee may, and, if in its opinion it is necessary to protect the interests of holders of debentures of the , the trustee shall give notice to the company of the borrower and Labuan Securities financial services 65 requires it to repay money received and, within one month after notice is given, submit a copy of the notice to the Board.

(3) the Trustees may not give notice under subsection (2) if it is satisfied that — (a) that the purpose or project has been largely achieved or completed;

(b) that the interests of the debenture holder has not materially termudarat by failure to achieve or accomplish the purposes or the project within the time stated in the prospectus or in reasonable time; or (c) that the failure to achieve or accomplish the purposes or the project due to the circumstances, in addition to a lack of money, beyond the control of the borrower company that cannot be predicted reliably by the company of the borrower at the time the prospectus was issued.

(4) this section shall not apply to an offer or invitation of securities under subsection 8 (5).


The detention of the issue of debentures terpohon buy excess 26. (1) a company borrower cannot accept or hold costs to issue debentures for more than the amount of the issue as disclosed in the prospectus unless the borrower company expressed in the prospectus that — (a) that the company expressly preserve the right to receive or withhold the issue of debentures terpohon buy the excess; and 66 laws of Malaysia ACT 704 (b) a limit on the amount of the issue of debentures terpohon buy excess is acceptable or detained.

(2) subject to any regulations, if a company borrower stated in a prospectus relating to an issue of debentures that the company expressly preserve the right to receive or withhold the issue of debentures terpohon buy excess — (a) the company the borrower cannot make, allow or unblock any statement or reference about backup assets for publication is made or is contained in any prospectus in relation to the issue Apart from a statement or reference to total assets and total liabilities of the company of the borrower and its guarantor, if any; and (b) the prospectus shall contain a statement or references about the total assets and total liabilities of the borrower company real if the issue of debentures terpohon buy excess on limit as stated in the prospectus that received or detained.
(3) any borrower who contravenes this section commits an offence and shall, on conviction, to a fine not exceeding ten thousand ringgit.

PART III CHAPTER 1 MUTUAL FUNDS BEGINNING Interpretation 27. In this section, unless the context otherwise requires — financial services and Labuan Securities 67 "investor" means a person, including the guardian and underwriters, who is the owner of securities issued by a mutual funds but does not include a person who took the initiative to form or organize business mutual funds and no ownership in the Fund;

"operator", in respect of a mutual funds, means — (a) if the mutual funds is a corporation, a Director of the Corporation;

(b) if the mutual funds is a limited partnership, a general partner in the limited partnership;

(c) if the mutual funds is a limited liability partnership, partner specified in the limited liability partnership; or


(d) if the mutual funds is a trust, a trustee for the trust;

"sponsor" means a person acting alone or together with others directly or indirectly taking the initiative in setting up or organize a mutual funds business, but does not include a guardian or an Underwriters who receive underwriting commissions without taking part in the establishment or organization of the mutual funds business;

"public funds registered" means a public funds registered under section 33;

"share" means a share or more in the share capital of a company mutual funds including, in the case of a company limited by guarantee, the interest of a member of the company and includes an interest in a partnership and mutual funds a shares in a unit trust mutual funds.

68 the laws of Malaysia ACT 704 CHAPTER 2 MUTUAL FUNDS SUBPENGGAL 1 FUNDS PRIVATE Notification by private funds 28. A private fund reserves the right to do business or arrange or administer its affairs by giving written notice to the Board stating the details of the scope and type of business.


Private fund shall submit information memorandum or any other offer document 29. (1) a private fund shall submit information memorandum or any other document relating to the private fund which describes the business and Affairs of the private funds to the Board.

(2) Information Memorandum or any other document referred to in subsection (1) shall be submitted by a private funds through licensed entities shall be reasonably satisfied that — (a) information memorandum or any other offer document submitted that refers to a private fund as defined under this section; and (b) there have been instances of fraud in the establishment of the private fund.

Labuan Securities and financial services 69 (3) an information memorandum or any other offer document submitted by a private fund shall be deemed to be a prospectus to the extent the information memorandum is in relation to the private fund liability for any statement or information that is false or misleading or that of which there is a material omission.

(4) when the Board receives information memorandum or any other offer documents under subsection (1), the Board shall be recorded the particulars thereof in the register maintained pursuant to Chapter 5 of this part.


Waiving of liability because of an error or omission in the information memorandum or any other offer documents 30. If an information memorandum or any other offer document submitted by private funds to the Board under section 29, both the Board nor any of its officers or employees shall not be liable for any loss or damage suffered by any person by reason of anything of the type of error, Error statement or omission found therein.

SUBPENGGAL 2 PUBLIC FUNDS public funds shall be registered as of 31. (1) no public funds can do business or arrange or administer its affairs unless the registration was allowed under paragraph 33 (1) (a).

(2) subject to subsection (3), no public funds can be proposed business conduct or arrange or 70 laws of Malaysia ACT 704 administers its affairs unless the conditional acceptance has been granted under paragraph 33 (1) (b).

(3) a public fund proposed for which a conditional acceptance has been granted under paragraph 33 (1) (b) may not conduct business or arrange or administer its affairs without the prior written consent of the Board in advance.


Application by public fund 32. (1) an application to the Board under subsection 31 (1) or subsection 31 (2) shall be accompanied by the following: (a) a statement indicating the scope and type of business to be conducted by the applicant in or from the Labuan;

(b) the instrument that through it the applicant is established or any other evidence required by the Board so that the Board is satisfied that the applicant was established with valid under the laws of Malaysia relating to the Labuan or under the law of any country or jurisdiction is recognised;

(c) a statement of the following: (i) the address of applicant's place of business and his address for delivery in relation to Labuan;

(ii) the name and address of the person in Labuan authorised to represent the applicant and to accept delivery on his behalf;

(iii) the address of applicant's place of business outside Labuan; and Labuan Securities and financial services 71 (iv) name, address, and relevant experience of the Director of the Fund;

(d) a declaration signed by the directors of the investment fund seeking about it confidential and secret;

(e) if available, copies of the prospectus, either in the form of a draft or final, for the public funds.

(2) public funds or public funds of a proposed shall submit any other information as determined by the Board from time to time.

(3) if any changes were made or incurred in respect of any information under subsection (1) shall be determined by the Board, the applicant, when registration or conditional acceptance, as the case may be, shall, within thirty days after the change occurred filed a notice indicating the type of the change with the Board.


Power to allow or refuse to allow the registration of public funds 33. (1) the Board may allow or refuse to authorise — (a) the registration of an public funds; or (b) conditional acceptance of a proposed public funds.

(2) an authorization under subsection (1) may be made subject to such terms, conditions, limitations or restrictions.

(3) a conditional acceptance under paragraph (1) (b) shall be valid and effective for a period not exceeding six months from the date of receipt of the conditional is allowed.
72 the laws of Malaysia ACT 704 (4) a conditional acceptance may be renewed for a period not exceeding three months when the application is made to

The Board and is accompanied by any document or information required by the Board.

(5) Notwithstanding the conditional acceptance have been allowed under paragraph (1) (b) to a public fund proposed, the Board may permit the registration of a proposed public funds as a public fund under paragraph (1) (a).


Procedure for registration 34. (1) if the Board allows the registration of an public funds under paragraph 33 (1) (a), the Board shall — (a) register the public funds in the register maintained under Chapter 5 of this part; and (b) issue a certificate of registration to the public funds.

(2) if the Board allows the conditional acceptance under peranggan 33 (1) (b), the sponsor of a proposed public funds shall, before the expiry of the acceptance period conditional or contingent that sends refurbished penerimaaan submit to the Board — (a) conditional acceptance from the Board;
(b) evidence to the satisfaction of the Board that the proposed that public funds were established lawfully in Labuan or any country or jurisdiction is recognised; and (c) the information referred to in subsection 32 (1).
Labuan Securities and financial services 73 (3) where the Board is satisfied that the proposed public funds referred to in subsection (2) has complied with the requirements of that subsection, the Board may authorize the registration of the public funds.

(4) If the Board allows the registration under subsection (3), the Board may register the public funds in the register maintained under Chapter 5 of this section and issue a certificate of registration.


The prospectus relating to public funds 35. (1) no public funds can be registered, in or outside Labuan, make an offer of securities unless before the offer is made, the public fund registered a prospectus submitted to the Board in accordance with the requirements of the prospectus under section 11.

(2) for the avoidance of doubt, the civil and criminal liability for erroneous statements in the prospectus provided under part II shall apply also for the prospectus submitted under this section.


Investor rights 36. (1) where a registered public funds to publish a prospectus or any amendment to the prospectus containing any misrepresentation in relation to any matters required that disclosed under subsection 11 (5), a person purchasing any securities pursuant to the prospectus or the amendment to the prospectus that is deemed to have relied on the misrepresentation and shall have the rights provided in subsection (2).

(2) a person referred to in subsection (1) may choose to use the right of action — 74 laws of Malaysia ACT 704 (a) for the purchase of cancellation; or (b) for damages, you jointly and severally against the Fund and every person who, although aware of the misrepresentation, signed the prospectus or the amendment to the prospectus and complying with the publication and submission or cause the prospectus or amended prospectus signed or issued and filed.

(3) for the purposes of this section, "misstatement" means — (a) any statement which is untrue or misleading about any required so that the consolidation referred to in subsection (1); or (b) an omission to disclose any such matters.

(4) No person shall be liable under this section if he proves that the purchaser purchased the shares offered by the prospectus or the amendment to the prospectus to find out about the misstatement.

(5) the right to act in order to obtain the cancellation or damages conferred by subsection (2) is in addition to any other rights which belong to the aggrieved it in law.


Limitations of 37. Notwithstanding any other written law to the contrary, an action under subsection 36 (2) shall not be instituted after — (a) one hundred and eighty days from the day the aggrieved the first aware of the misrepresentation; or financial services and Labuan Securities 75 (b) one year from the date of purchase transactions that raise cause the action, whichever is earlier.

Certificate of conformity of 38. Every public funds registered doing business outside of Labuan under the law of any country or jurisdiction is recognized shall, in every year, within ninety days of the end of its financial year, submit to the Board a certificate of compliance or a document equivalent no matter by whatever name called from competent authorities responsible for the regulation and supervision of the conduct of its business in the country or jurisdiction recognized that.

Foreign public funds can be managed or administered in Labuan 39. A public fund that is registered with valid under the law of any country or jurisdiction is recognised need not be registered as public funds under section 33 as long as the public funds administered or managed in Labuan by a Fund Administrator, guardian, trustee or the Fund Manager, which is licensed, registered or eligible under this section.

CHAPTER 3 SUBPENGGAL 1 LICENSING FUND MANAGERS and FUND ADMINISTRATOR Licensing Fund Manager 40. (1) No person shall do business as fund managers a public funds unless such person is 76 laws of Malaysia ACT 704 Labuan company who have been granted a licence to act as Fund Manager under this section.

(2) Notwithstanding subsection (1), the following person can conduct business as fund managers a public funds: (a) the person still and continue to be a qualified Manager and authorized for mutual funds under the law of any country or jurisdiction is recognised and has received the written consent of the Board to conduct business as General Manager of public funds; and (b) licensee bank.
(3) Fund managers fund management activities relating to private funds only not required to be licensed under this section.


Licensing Administrator Fund 41. (1) No person shall do business as an administrator of the Fund a fund public unless that person is the company's Labuan or Labuan trust companies and has been given a license to act as an administrator of funds under this Act.

(2) Notwithstanding subsection (1), the following person can

doing business as an administrator of a public fund of funds: (a) licensee bank;
(b) Labuan trust companies;
(c) licensee of securities under part IV;
(d) the management company licensed under part VIII; and Labuan Securities and financial services (e) 77 people still continue to be the Fund Administrator and qualified and authorised for mutual funds under the law of any country or jurisdiction is recognised and has received the written consent of the Board to conduct business as fund administrator for public funds.

(3) the administrator of the funds to carry out the administration of funds relating to private funds only not required to be licensed under this section.


Application for licence 42 fund managers. An application for a license to conduct business as fund managers a public fund shall be — (a) made in such form as may be determined by the Board; and (b) accompanied by — (i) the particulars of the human and financial resources and Administration facilities on the applicant for the conduct of its business with reliable and efficient;

(ii) a statement of the following: (aa) the address of applicant's place of business and his address for delivery in relation to Labuan;

(bb) the name and address of a person in Labuan authorized to represent the applicant and to accept delivery on his behalf; and 78 laws of Malaysia ACT 704 (cc) the address of applicant's place of business outside Labuan; and (iii) any information or documents required by the Board for the purpose of determining the application.


Application for license administrator 43 funds. An application for a license to conduct business as an administrator of funds a public funds shall be — (a) made in such form as may be determined by the Board; and (b) accompanied by such information or documents required by the Board for the purpose of determining the application.


The power to grant or refuse to grant the license 44. (1) on receipt of an application, the Board may grant or refuse to grant the license.

(2) the grant of a license shall be made subject to such terms, conditions, limitations or restrictions.

(3) except with the written consent of the Board, no changes may be made in respect of identity, residence, your domicile, ownership or holding shares in the Fund Manager or fund administrators in the effective period of the license.

(4) the Board cannot provide — (a) licences to the Fund Manager of a public funds; or financial services and Labuan Securities 79 (b) license to administrators of funds a public funds, unless the Board is satisfied that the applicant is a fit and proper person to be involved in fund management or business administration funds to mutual funds.


SUBPENGGAL 2 a TRUSTEE or CUSTODIAN trustee or guardian Qualifications public funds 45. (1) No person shall do business as trustee of a public funds unless such person is a Labuan trust company.

(2) No person shall do business as guardian of a public funds unless such person is the holder of a licence to the bank or trust company of Labuan.

(3) this section shall not apply to someone who still and continue to be a trustee or guardian qualified and authorized for public funds under the law of any country or jurisdiction is recognised and has received permission from the Board to conduct business as trustee or custodian of a public fund.

SUBPENGGAL 3 GRANT of a LICENSE or REGISTRATION of a licence or registration 46. A licence granted or registration under this part shall — (a) in such form as may be determined;
80 laws of Malaysia ACT 704 (b) remain in force until revoked; and (c) can be received in all courts as prima facie evidence of the facts stated therein.

CHAPTER 4 DUTIES Duty fund managers and fund administrator for public funds 47. Fund Manager or fund a Fund Administrator and public officer shall, in the exercise of their powers and duties — (a) act honestly;
(b) use the appropriate level of care and as can be expected with reasonable at someone in the position;

(c) Act for the Betterment of investor interest in public funds and, if there is a discrepancy between the investor interest with its own significance, giving priority to the interests of investors;

(d) treat investors who hold the interest of the same class equally and attendees who hold the interests of different classes in a fair;

(e) shall not use information obtained through his position as Fund Manager or fund administrators or officers to make — financial services and Labuan Securities 81 (i) improper advantage for themselves or others; or (ii) cause harm to investors in public funds;

(f) ensure that all payments from property public funds is made according to the constituent documents of the public funds, this Act and any regulations;

(g) report to the Board, as soon as practicable after that he realized would be any infringement of — (i) this Act and any regulations; or (ii) public funds the constituent documents that causes, or is likely to cause harmful effects, materially at investor interest; and (h) take action reasonable caution to make and keep adequate records on all matters, transactions and transactions, including accounting records.


Obligations of the Fund managers, fund administrators, trustees or guardians and directors under law applicable 48. Obligation of the Fund Manager, the Fund's administrator, trustee or guardian and their Director imposed on them under this Term are in addition to and does not reduce the obligation otherwise imposed on them by any applicable law.


82 the laws of Malaysia ACT 704 specific Obligations for public funds Manager funds 49. (1) the Fund Manager of a public funds shall be — (a) ensure that a written agreement is made with each customer before a transaction carried out on behalf of clients;

(b) understand the investment objective, direction, investment restrictions and risk profile of each client, if applicable, the

must be reviewed and updated at least every year;

(c) be reasonably careful in, and have a reasonable and adequate basis for, providing investment policy or recommendation of investment;

(d) obtain the approval of each client on the basis of an investment or investment recommendation prior to carry it out;

(e) provide complete and accurate information to each client in order to make investment decisions based on information when approving investment policy or recommendation that investment;

(f) avoid any misrepresentation in any investment policy or recommendation of investment; and (g) ensure that there is enough money and property in customer's account to carry out the transaction.

(2) a written agreement referred to in paragraph (1) (a) shall include, inter alia, the following: (a) investment objective, direction, investment restrictions and risk profile of the customer;

Financial services and Labuan Securities 83 (b) notification of any significant changes in investment policy or recommendation of investment;

(c) methods and how to make reports to the customer;
(d) authorisation clearly on management discretion;

(e) the frequency of written report regarding the performance and review the money or property of customers who compared with benchmark is appropriate;

(f) the amount of the fees and charges payable by the customer;
(g) the intention of the Fund Manager to accept, or the practice of receiving, Commission is easy;

(h) details of the arrangements care; and (i) any other matter determined by the Board from time to time.

(3) a fund manager who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both an obligation to separate the assets of customers 50. (1) the Fund Manager for public funds shall ensure that every client's assets deposited into trust accounts and maintained by a guardian or trustee or any other person authorized by the Board, as the case may be, not later than the next business day the bank or any other day designated by the Board, following the day that the Fund Manager receives the customers assets.
84 laws of Malaysia ACT 704 (2) if the assets of the customers who are required to be deposited into a trust account by this section is received by the Fund Manager in a place outside Malaysia, the Fund Manager may deposit such assets into a trust account that disenggarakannya in that place.

(3) trust account referred to in subsection (1) and (2) must always be kept separate from the accounts of the Fund Manager, and should be marked as such in the books fund managers in relation to each customer account, so that the money, property or other valuable consideration, it is not at any time been a part of or is mixed with the General assets of the Fund Manager, and all investments made by the company as trustee shall be determined in such a way so that the trust associated with that investment can be identified easily at any time.

(4) customer Assets held in a trust account shall not be used for the payment of debts or fund managers cannot be paid or taken for implementation under an order or court process for the payment of debts fund managers.

(5) no nothing in this section shall be construed as a delete or affect any claim or lien valid owned by any person of or over any customer assets held in the trust account or towards or over any assets of the customers who received for the purchase or disposal of securities before the assets are deposited into the trust account.

(6) any person who contravenes this section commits an offence and shall, on conviction, to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or both.


Financial services and Labuan Securities 85 Duty fund managers and custodians or trustees to act independent of each other 51. (1) the Fund managers and custodians or trustees of a public fund shall be — (a) different people and act independent of each other;

(b) not being a corporation related to the other; and (c) does not have an Executive Director or other officer of the same.

(2) any person who contravenes this section commits an offence and shall, on conviction, to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or both.

TERM 5 CHECK and ACCOUNTING Express 52. (1) the Board may keep separate registers for — (a) private funds;
(b) public funds; and (c) the Fund managers and fund administrator for public funds.
(2) the register referred to in subsection (1) may contain — 86 laws of Malaysia ACT 704 (a) the information required under section 29, 32, 42 and 43 in respect of each person who has been given the license or allowed to be registered or has received written consent under this Act;

(b) date of licence, registration or permission, as the case may be; and (c) the date of the licence or registration or authorization is cancelled.

(3) the register kept under this section shall be in such form as may be determined by the Board.

(4) the Board may issue to any person, upon the request of that person, a certificate of conformity in accordance with any shape, on payment of such fees, as may be prescribed.

(5) No person shall exercise such powers or perform such duties under this section may, with the disedarinya, have any financial interest in any person who has been given the license under which it is registered, or a written authorization under this section.


Accounts and audit 53. (1) every registered public funds shall be — (a) keep or cause to be kept the accounts and records and shall, after the end of each financial year, cause to be prepared a statement of accounts for the financial year, which shall include a balance sheet and an income and expenditure account in accordance with General accepted accounting principles applicable in Malaysia or in any country or jurisdiction is recognised;

Labuan Securities and financial services 87


(b) saving any accounting records and financial statements or copies of to say in place of its business in Labuan and make it available for inspection by the Board or any person authorized in writing by the Board;

(c) keep in place its business in Labuan and is making it available to the Board or any person authorized in writing by the Board of any record, statement, document or other information that may be prescribed in writing by the Board;

(d) within a period of three months from the end of each financial year submit to an auditor of the financial statements referred to in peranggan (a) and any records and other information that is required for an audit in accordance with generally accepted auditing principles applicable in Malaysia or any country or jurisdiction is recognised; and (e) provide or make available for inspection by all investors of the Fund financial statements referred to in paragraph (a) together with the Auditors ' reports thereon.

(2) the accounting and financial statements are required to be kept pursuant to subsection (1) may be kept in any currency and in any language, but if the accounting records and the financial statements are kept in the national language or languages other than English, a translation into the national language or English, which is verified by the satisfaction of the Board, shall be kept by the public funds together with the accounting records and the financial statements.




88 the laws of Malaysia ACT 704 PART IV CHAPTER 1 the BEGINNING of MARKET INTERMEDIARIES Interpretation 54. In this section, unless the context otherwise requires "securities licensee" means a person, which is to get the return value, provide investment advice or administrative service in respect of securities for the purpose of investment, including the quoted securities or any other activities as determined by the Board.

2 TERM SECURITIES LICENSEES licensee security 55. (1) No person shall carry on business as a securities licensee unless the person is a Labuan company license has been given to act as licensee of securities under this section.

(2) Notwithstanding subsection (1), the following person can conduct business as a licensee of securities: (a) the Fund Manager referred to in subsection 40 (1) and (2); and (b) licensee bank.



Labuan Securities and financial services Application for licence 56 89. (1) an application to the Board under subsection 55 (1) to be licensed as a securities licensee under this part shall be made in writing to the Board by or on behalf of the applicant.

(2) an application for a license to conduct business as a licensee securities shall — (a) made in such form as may be specified by the Board; and (b) accompanied by — (i) any application fee prescribed by the regulations;

(ii) details of the human and financial resources and Administration facilities available for the applicant to conduct its business with reliable and efficient;

(iii) a statement of the following;
(aa) the address of applicant's place of business and his address for service relating to the Labuan;
(bb) the name and address of a person in Labuan authorized to represent applicants and received a presentation on his behalf; and (cc) the address of applicant's place of business outside Labuan;

(iv) a statement which means that the applicant has declared 90 compliance laws of Malaysia ACT 704 to Act anti-money laundering, terrorism financing and revenue from illegal activities 2001 [Act 613] and shall ensure that it will update the policy and tatacaranya periodically to comply with his will; and (v) any other information or documents required by the Board with reasonable for the purpose of determining the application.


The authority to give or refuse to give licence 57. (1) on receipt of an application under section 56, the Board may allow or reject the application.

(2) the grant of a licence under this section may be made subject to such terms, conditions, limitations or restrictions.

(3) except with the written consent of the Board, no changes may be made in respect of identity, residence, your domicile, ownership or shareholding securities licensees in the effective period of such licence.

3 TERM of the GRANT of a LICENSE Licence 58. A licence granted under this part shall — (a) in such form as may be determined;
(b) specify any terms, conditions, restrictions or limitations;
Financial services and Labuan Securities 91 (c) in force until the licence is cancelled; and (d) can be received in all courts as prima facie evidence of the facts stated therein.

Part V LABUAN TRUST COMPANIES INITIAL interpretation of the TERM 1 59. In this section, unless the context otherwise requires — "the estate" means any property, whether real estate or personal property, which dikomitkan to the administration or management of a Labuan trust company as executor, administrator, trustee, receiver, guardian, Committee or agent;

"Labuan managed trust company" means a person who carries on the business of the trust company when the business is managed by another Labuan trust companies according to the provisions of Chapter 3 of this part;

"trust maker" means — (a) any person holding the assets of the trust or make a testamentary disposition on trust or to a trust, but does not include a person who makes a contribution to a trust and described such a trust instrument; and;

92 the laws of Malaysia ACT 704 (b) if there is more than one maker trust named in the trust instrument, trust maker named it must be related people;

"business trust" means — (a) to establish or use Office transfer shares or share registration office;

(b) administer, manage or otherwise mengurusniagakan property as an agent, the personal representatives of the law or the Trustees, whether through the servants or agents or otherwise;

(c) maintain an agent for the purpose of searching for or obtain business, whether the resident agent

on an ongoing basis in Labuan or not;

(d) maintain an Office, agency or branch, either an Office, agency or branch is used also for any purpose by a another entity or not;

(e) grant — (i) the accounting and management services; or (ii) the directors, Secretary and registered office of the company, Labuan incorporated or registered under the companies act and the company's Labuan Labuan 1990 foreign registered under the Act;

(f) form or register a company under the companies act of Labuan 1990 and generally act as agents of delivery for any documents that are required to be submitted by a company or a person under the Act; and Labuan Securities and financial services 93 (g) providing any other services approved by the Board from time to time, to or on behalf of any person;

"trust instrument" means an instrument in writing through it a trust created and includes a declaration of trust one party and an instrument that changes the terms of the trust.


License required to conduct business trust companies in Labuan 60. No person shall carry out or make transactions or submit himself to be run or mentransaksikan any business trust companies unless — (a) that person incorporated or registered under the companies Act 1990 and the Labuan is licensed to do so under this Act; or (b) the person is licensed as a trust company managed Labuan.


Registration of trust companies 61. (1) subject to section 60, a person incorporated or registered under the companies act of Labuan 1990 may apply to the Board, in the prescribed form, for a license to conduct business trust companies in Labuan.

(2) an applicant may apply to the Board for a licence under subsection (1) by meeting the following criteria: 94 laws of Malaysia ACT 704 (a) the applicant has contributed at least equivalent amount with one hundred and fifty thousand dollars in any foreign currency to fund the company's working capital or Labuan or Labuan the foreign company;

(b) the applicants either — (i) has, or will get a professional indemnity insurance policy with coverage of not less than one million dollars or equivalent in any foreign currency or any amount or kind of other currency as determined by the Board;
or (ii) has been deposited with the Board of collateral worth one hundred thousand ringgit or equivalent in any foreign currency or any amount or kind of other currency as determined by the Board;

(c) the applicant is unable to perform its obligations, including its liability to shareholders; and (d) the applicant's directors and officers responsible for the management of trust companies in Labuan Labuan, is fit and proper.

(3) a Labuan trust company shall have: (a) at least two trust officers, one of whom shall be placed in Labuan; and (b) place of business in Labuan.



Financial services and Labuan Securities 95 62 license terms and conditions. (1) the Board may approve an application for a license as a Labuan trust companies subject to such terms and conditions, if any, as he thinks fit.

(2) every Labuan trust companies shall deliver a notice in the prescribed form to the Board on — (a) any change to the place of its business in Labuan; and (b) any change of his trust officer, within seven days from the effective date of the change or Exchange stated that.

(3) every trust companies in Labuan should always indemnified under a professional indemnity insurance policy with coverage of not less than one million dollars or equivalent in any foreign currency or such other amount as determined by the Board during the company operates as a Labuan trust company.

(4) no Labuan trust companies can open any Office or acquire or establish such subsidiary outside Labuan without the prior written consent of the Board in advance.

(5) any person who contravenes subsection (4) commits an offence and shall, on conviction, to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding one year or to both.




96 laws of Malaysia ACT 704 continuation of temporary for the winding up of 63. Notwithstanding any provision to the contrary, the Board may authorize in writing the Labuan trust companies to conduct business until such extent and for such periods of time specified in the authorization is only for the purpose of enabling the Labuan trust companies winding-up its affairs arising from cancellation of his/her license.

CHAPTER 2 the POWER of LABUAN TRUST COMPANIES disclosure of interest in relation to the Labuan trust companies 64. Every trust company off in any other manner have, either directly or indirectly, an interest in a contract or proposed contract or a party in a transaction which the company and act upon the nature of the fiduciary either as trustee or otherwise, shall, as soon as that can be implemented reliably, giving details of his interest to the customers concerned and the Board.


Labuan trust companies power to act as executor 65. Labuan trust companies if something was appointed the company either alone or in association with any other person as executor in a will on someone in a pewasiat or kodisil to the will that, no matter when the will or kodisil has been made, the Labuan trust companies may act as executor and can apply to obtain probate for the will and any kodisil him , and can do and perform all such acts and duties as executor with full and seberkesannya like any other executors.
Financial services and securities Labuan Labuan trust companies 97 Power to act as the administrator of 66. (1) in any case that a person can apply for a grant of letters of administration the estate of a deceased person, whether with or without a will, the person can be attached —


(a) join a Labuan trust companies in the application for the grant of letters of administration of the estate for himself and the Labuan trust companies Association; or (b) authorize the Labuan trust companies to apply for grant of letters of administration of the estate.

(2) if the administration of an estate, whether with or without the will attached, are attributed to a Labuan trust company the company either alone or in association with any other person, the Labuan trust companies may do and perform all such acts and obligations belong to the position of administrator or administrator with, as the case may be, even if it is incorporated.


The extra power of Labuan trust companies 67. A Labuan trust company be appointed as agent or trustee under any solution or other instrument creating a trust, or to execute any trust or duty permitted by this Act or by the memorandum or article his association or by any instrument which form a Labuan trust companies that, to run, and be appointed as such, regardless of when a solution or instrument creating the trust or impose the obligation was made , and either as the original trustee, trustee of new or additional trustee, and 98 laws of Malaysia ACT 704 can do and perform all such acts and the duties of a trustee with full and seberkesannya like any other trustee.

Labuan trust companies power to act as a sole trustee is 68. (1) a Labuan trust company may be appointed or continue to act as a sole trustee while there are provided for by the terms of the instrument creating the trust or any power or otherwise that there shall be more than one trustee to carry out the trust.

(2) Notwithstanding subsection (1), a Labuan trust companies cannot be appointed or shall not be entitled to act as a sole trustee in any case that the instrument creating the power or trust expressly prohibit — (a) the appointment of a Labuan trust company;
(b) provides that there shall be another trustee in addition to a Labuan trust company; or (c) provides that a Labuan trust companies cannot be appointed to act as a sole trustee.

Labuan trust companies power to act as trustee along with 69 other trustee. (1) a Labuan trust company may act as trustee, executor or agent in association with Labuan trust company or any other person if — (a) the instrument under which the trust companies Act provide for such;
Financial services and Labuan Securities 99 (b) the trust company is authorized or required to do so by law; or (c) the court order the same.
(2) a Labuan trust company shall not be liable for breach of trust or loss due to any act or omission on the part of Trustees, executors or agents with whom the trust companies Act, unless the trust companies in Labuan itself has been actively involved in, or agree with, the criminal breach of trust.


Delegation to the Labuan trust companies 70. (1) be valid for any executor, administrator, trustee or agent to delegate, by deed or in writing to a Labuan trust company the company either alone or in association with any company or other person, as its representative, all trusts and powers as may be delegated by him lawfully.

(2) all actions performed by the Labuan trust companies as recipients of such wakilan shall, against any person who deals with trust companies in Labuan without notice of cancellation of such power by the executor, administrator, trustee or agent that, be valid and in force notwithstanding such cancellation.

CHAPTER 3 the MANAGED TRUST COMPANIES trust companies Licensing LABUAN Labuan managed 71. (1) the following person may be licensed as trust companies managed Labuan unless that person is — 100 laws of Malaysia ACT 704 (a) the company the company's Labuan Labuan or foreign; or (b) a foreign company that is licensed, registered or approved trust companies to do business in other jurisdictions.

(2) the Board may grant or refuse to grant the licence to that person as trust companies managed Labuan and impose any terms and conditions on the licence as he considers necessary.

(3) an application for a licence under this part shall be accompanied by — (a) the production of a detailed proposed management agreement between applicants with Labuan trust companies;

(b) production of certified copies of the certificate of incorporation or constituent documents of the applicant; and (c) the submission of a letter of good standing or any other documents of the same type from the appropriate authority of the country of origin of the applicant, if applicable.


The terms and conditions of the licence as Labuan trust companies managed 72. (1) before starting a business as a trust company managed Labuan, every trust company managed Labuan shall appoint a Labuan trust company Trust Manager managed Labuan for him to conduct the business of the company his trust.

(2) every trust company managed Labuan shall at all times ensure that Labuan trust companies the Securities and financial services still Labuan 101 and continue to be licensed as a Labuan trust company under this Act.

(3) for the avoidance of doubt, except for section 61 and 62 and of Division 4 of this part, all the provisions applicable to a Labuan trust company under this Act shall also apply for a Labuan trust company managed.

(4) If, after his appointment as Manager of the trust managed Labuan for a Labuan trust company managed License Manager trust managed the Labuan cancelled under section 168, the managed trust company shall elect a new managed trust manager within four weeks following the date of the licence the Labuan trust companies managed cancelled, and if not do so managed trust company licences shall be cancelled automatically by the Board.

TERM 4


LABUAN TRUST COMPANIES PRIVATE Meaning "person related" 73. For the purposes of Division 4 — (a) a "personal trust" means a trust that each of a trust are those relating to relating to the trust maker;

(b) a person is a person in respect of any of the following relationships: (i) the wife or husband;
(ii) his children and wives or their husbands;
(iii) her parents, including step-parents;
102 the laws of Malaysia ACT 704 (iv) grandfather or his grandmother and grandfather or grandmother wife or husband;

(v) his multi-millionaire father-in-law parents, including step-parents-in-law;
(vi) the brother or brother, brother or sister, ur brother or sister, sister or wife or ur sister and their husbands;

(vii) the brother or brother wife or her husband, brother or step-brother's wife or her husband, sister or wife or sister, husband or sister Emmy wife or husband and wife or husband and their children;

(viii) brother or abang parents, brother or step-parents, brother sister sister parents, sister or step-sister and his parents, wife or their husbands;

(ix) the children of brother or brother, brother or step-brother, sister or brother or sister or step-sister of his parents, who are present or in the future, including stepchildren and wife or their husbands; and (x) childrens brother or his brother, brother or sister, ur brother or sister, sister or ur sister, availability or in the future, including stepchildren and wife or their husbands;

(c) for any of the relationships specified in paragraph (b) which can exist with sepemendaan or relationship, the relationship the same sedarah can exist with transport.
Labuan Securities and financial services 103 registration as a private trust companies in Labuan 74. (1) No person may be registered as a private trust company unless such person is — (a) a Labuan company; or (b) a foreign company Labuan.
(2) an applicant may apply to the Board, in the prescribed form for registration as a private trust companies in Labuan Labuan by meeting the following criteria: (a) the applicant to the satisfaction of the Board that the applicant will hold trust company service only for a private trust or private trust-a trust created or to be created by or at the direction of the trust maker or an individual or individuals who are those related to the makers of trust described in the trust instrument;

(b) furnishing certified copies of trust instrument executed and any instrument of trust executed after that;

(c) submission of a letter of undertaking that it will not conduct any business trust companies other than those of the private trust or private trust-trust; and (d) it shall appoint a Labuan trust companies as agents.

(3) the Board may refuse to register the applicant as a private Labuan trust companies if the Board has reason to believe that the applicant is likely to 104 laws of Malaysia ACT 704 conduct business in a manner that is prejudicial to the public interest or the interest of any beneficiary of the trust in respect of which the applicant is a private service.

(4) the Board may, as he may deem necessary, impose, vary or revoke any term or condition on any registration under this Term with the request it in writing.


Terms and conditions of registration as a private trust companies in Labuan 75. (1) a private Labuan trust companies shall, at all times, ensure that — (a) it complies with paragraph 74 (2) (a); and (b) his agent is a Labuan trust company licensed under this section.

(2) subject to subsection (3), a private trust companies in Labuan cannot be registered under this Chapter in such a period as it is in violation of subsection (1).

(3) If, after his appointment as agent of the private trust companies in Labuan, the agent license revoked, subsection (2) does not apply and the Labuan trust companies private shall continue to be registered for a period of thirty days following the date of the agent's licence be revoked.


The duties of private trust company agent Labuan 76. (1) a Labuan trust companies cannot act as an agent of a private trust companies in Labuan unless the agent took all reasonable steps to financial services and Labuan Securities 105 to his satisfaction that the Labuan trust companies private — (a) compliance with paragraph 74 (2) (a); or (b) if the private trust companies in Labuan is not at that time a private trust business, that private trust companies in Labuan will, on commencement of business trust devices, compliance with paragraph 74 (2) (a).

(2) private Labuan trust company Agent should periodically take all reasonable steps to his satisfaction that the Labuan trust companies private continue to comply with paragraph 74 (2) (a).

(3) the frequency of the agent to review compliance by private Labuan trust companies over paragraph 74 (2) (a) shall be determined by the agent on the basis of its evaluation on the risks of private trust companies in Labuan is not in compliance with that section.

(4) the agent shall take all reasonable steps to ensure that your copy of the most recent record the following in respect of each private Labuan trust companies for which he acts as agent stored at its Office in Labuan at all times: (a) a trust instrument and any deed or document that changes the terms of the trust, in respect of each trust concerned; and (b) documentation and other information upon which he relies to his satisfaction that the Labuan trust companies private compliance with paragraph 74 (2) (a).

106 the laws of Malaysia ACT 704 (5) If at any time an agent of a private trust companies in Labuan trust companies private opinion of Labuan were not in compliance with paragraph 74 (2) (a), the agent shall immediately notify the Board in writing of his opinion of it.


Power Board 77. (1) Notwithstanding anything to the contrary in any

trust instrument, if the Board is satisfied that in the interest of a private trust is necessary for all or any of the trusts for which private Labuan trust companies act as the trustee transferred to trustees new to administered by the trustee, the Board can mempetisyen the Court for that purpose.

(2) where the Board to take action pursuant to subsection (1), the Court may, after hearing representations from the Board or any other person it appears to the Court as affected, ordered the transfer of any such trust to a new trustee, and make any additional order or side or give any direction it deems fit by the Court.

(3) without prejudice to any provision under any written law, the Board shall have locus standi or right in law to make a presence, starting and conducting proceedings pursuant to subsection (1).

(4) the Board may claim legal costs incurred in the exercise of its powers under subsection (1) of the person concerned or private trust companies in Labuan, as the case may be.


Disapplication of the provisions of this Division and Labuan Securities financial services 107 78. The provisions of Chapter 1, 2, 3 and 5 of this section shall not apply to private trust companies in Labuan unless otherwise provided under this part.

CHAPTER 5 MISCELLANEOUS Labuan trust companies subject to the same control as any other executor 79. If a Labuan trust company was appointed as executor, administrator, trustee, agent or representative of the company shall be subject to the control of all aspects of the same and to the removal or restriction of the Act, and generally to the jurisdiction of the Court, as the same way as any executor, administrator, trustee, agent or other representative.


Affidavit officer 80. In all the things a Labuan trust companies required or authorized to make any affidavit, declaration or statement, the company can do so through any of the authorized officer appointed for that purpose.


Examination of the books and accounts of the Labuan trust companies 81. (1) any person who — (a) to the satisfaction of the Court that he has an interest under any trust that currently are under the control or management of a Labuan trust company; and 108 laws of Malaysia ACT 704 (b) protest against an act or decision of the Labuan trust companies based on any ketidakteraturan or of the Labuan trust companies while performing the action or decision-making, may apply to court for any entries in books and accounts of the Labuan trust companies relating to the action or decision is examined.

(2) if the Court received an application under subsection (1), the Court may appoint an auditor to examine entries in books and accounts of the Labuan trust companies and the Auditors shall report dapatannya to the Court.

(3) if it is proved through the findings of the Auditors that there had been a kind of ketidakteraturan or by the Labuan trust companies, the Court may make any order it thinks fit.

(4) for the purposes of this section, an auditor does not include any internal auditors the Labuan trust companies.


Retain the record of 82. (1) a Labuan trust company shall maintain any records required to be kept under this Act for a period of not less than six years from the date the account is closed or the transaction completed or terminated.

(2) any Labuan trust companies who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Financial services and Labuan Securities 109 money paid to Labuan trust companies shall be held upon trust 83. (1) any money, property or other valuable consideration paid or given or held by a Labuan trust company on its fiduciary nature should always be kept separate from money, property or valuable consideration Labuan trust companies, and must be marked as such in the books of Labuan trust companies in relation to each particular trust to always be distinguished from any other in the register and other account book kept by the Labuan trust companies , so as not to let the money, property or return value is a part of or is mixed with the General assets of Labuan trust companies, and all investments made by the company as trustee shall be determined in such a way so that the trust to which the investment belongs to can be identified easily at any time.

(2) any Labuan trust companies which do not comply with the requirements of subsection (1) and every officer of the Labuan trust companies that default commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or both of each.


Commissions, fees, charges and expenses levied by Labuan trust companies 84. (1) a Labuan trust company shall be entitled — (a) if the trust companies hold inheritance on behalf of any person, receives from the estate of a Commission, in addition to all the money spent properly by the Labuan trust companies and fees due to him and that may be imposed against the estate; and 110 laws of Malaysia ACT 704 (b) in all other matters, the levy of fees, charges and expenses in respect of any work performed by the Labuan trust companies for or on behalf of any person.

(2) if the Court is of the opinion that any commissions, fees, charges or expenses levied in respect of any estate or in respect of any work performed by the Labuan trust companies is outrageous, the Court may, upon the application of any person, who in his stead estate is held, or on his behalf the work undertaken, review commissions, fees, charges or expenses that, and can reduce it if it thinks fit.

(3) the commissions, fees, charges or expenses entitled by a Labuan trust company under this section shall not be

in any way affected or reduced by reason of any other person may be entitled to a Commission, fees, charges or expenses in respect of the work performed.

(4) a Labuan trust company shall have the right to share commissions, fees, charges or expenses that he is entitled to it under this section with any other person.


The translation of the accounts and records 85. If any account or other record required to be kept under this Act shall not be stored in the national language or English, Director of the Labuan trust companies shall cause a true translation of the account and the records made from time to time at lat intervals not exceeding seven days and shall cause the translation is saved together with the accounts and records of the original.




Labuan Securities and financial services 111 PART VI CHAPTER 1 the BEGINNING of BANKING LABUAN 86 Interpretation. In this section, unless the context otherwise requires — "the bank's licence" means a licence granted pursuant to an application under section 88 and 89, according to the requirements of the section context;

"business credit building" means the business of providing any credit facility to any person for the purpose of real to — (a) purchasing immovable property;
(b) the construction, reconstruction or renovation of any building or other structure, for the purpose of residential, commercial or industry;

"capital moneys" means paid up capital and reserves;

"commodity derivative instruments" includes, to the extent that the instrument is not a derivative financial instrument, commodity futures, commodity forwards, commodity swaps, commodity options or other commodities instruments that have the same features, which can be reasonably required settled with cash or securities or other derivative instrument;

"line of credit" means — 112 laws of Malaysia ACT 704 (a) any advances, loans or other facilities in whatever form or by whatever name called, which pemberiannya the person to advance, loan or other facilities is given have access, directly or indirectly, to the money people give it away; or (b) any liability incurred on behalf of any person;

"business credit mark" means any business a sign, a cheque, card, vouchers, stamps, booklets, coupons, forms or documents or other things granted or issued to a person, referred to as "customer", by people who run the business, referred to as "producers", which the producer undertakes to it — (a) that upon submission of the marks, whether any other action is also required to or not , the manufacturer will supply cash, goods or services on credit; or (b) that if, when presented the mark to a third party, whether any other action is also required to or not, a third party that provides cash, goods or services, the issuer will pay such third parties on their behalf, either by deleting any discount or Commission or not, and as its payment shall be made thereafter to the producer by the customers , and for the purposes of this definition, the use of a sign to operate a machine provided by the manufacturer or by a third party shall be calculated as the production of the sign to the person who set up the machine;

"deposit" means an amount of money received or paid on terms — financial services and Labuan Securities 113 (a) under which the money will be paid back, with or without interest or at a premium or discount;

(b) under which the money can be repaid, whether in whole or in part, in any consideration of money or value of money, and the repayments that either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person who received it, regardless of whether the transaction was described as a loan , advance, investment, savings, sale or sale and repurchase, but shall not include money paid by bona fide — (A) by advance payment or part under a contract of sale, rental or provision of property or other services, and may be reimbursed only in respect of the property or service that is not or does not in fact sold, rented or otherwise provided;

(B) by a guarantee for the implementation of a contract or through a guarantee in respect of any loss that may be caused by the non-performance of a contract;

(C) without prejudice to paragraph (B), through the guarantee for penghantarserahan or the return of any property, whether in certain circumstances or otherwise; and (D) in any other circumstances, or to or by any other person, as determined by the Board;

114 laws of Malaysia ACT 704 "derivative financial instruments" means the futures, forward, swap, or options, or other financial instruments of the same its characteristics but shall not include — (a) all appearing in the balance sheet as a receivable and payable, including the receivable and payable acquires its value or on a contract basis requires the flow of money from the price of any securities or other index , such as mortgage-backed securities, obligations based on interest only and based on principal alone, and indexed debt instruments; and (b) features of the options contained in the balance sheet as a receivable and payable, such as conversion features and the call of the convertible bonds;

"derivative instruments" means instruments whose value depends on the value of the asset or index such as backup currency, securities, commodities or other derivative instrument and includes derivative financial instruments derivative instruments and commodities;

"business development funding" means the business of providing capital or other credit facilities on terms that will requires it used for the development of industry, agriculture, commercial or other economic development; and for the purposes of this definition, "development" includes the start of any new venture industry, agriculture, commercial or other economic venture or expansion or repair any such existing efforts;

"factoring business" means a business acquire debt

payable to any person;

"Labuan banking business" means — financial services and Labuan Securities 115 (a) deposit-taking business to current accounts, deposit accounts, savings account or any other account specified by the Board;

(b) Labuan investment banking business;
(c) financial business Labuan;
(d) the Islamic banking business of Labuan;
(e) any other business as may be determined by the Board with the approval of the Minister, in any currency (including ringgit if permitted by the Exchange Control Act 1953 * or any other relevant laws and regulations in force);

"Labuan financial business" means — (a) business credit building;
(b) a business sign credit;
(c) financing business development;
(d) leasing business;
(e) factoring business;
(f) a business broker money;
(g) Labuan Islamic finance business; or (h) any other business as may be determined by the Board with the approval of the Minister, * NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758].
116 the laws of Malaysia ACT 704 in any currency (including ringgit if permitted by the Exchange Control Act 1953 * or any other relevant laws and regulations in force);

"Labuan investment banking business" means — (a) the business of giving credit facilities;
(b) providing business consultancy and advice relating to corporate matters including investment and dealing securities or manufacturing and investment management on behalf of any person;

(c) business conduct foreign exchange transactions, interest rate swap, derivative instrument transactions or financial instruments issued or any similar risk management activities is another;

(d) Islamic investment banking business of Labuan;
(e) business financial Labuan; or (f) any other business as may be determined by the Board with the approval of the Minister, "Labuan Islamic banking business" means the Islamic banking business carried out by a person who is licensed to do so under part VI of the financial services and Securities Act of Islam Labuan 2010;

"Labuan Islamic financial business" means Islamic finance business carried out by a person who is licensed to do so under part VI of the financial services and Securities Act of Islam Labuan 2010;

* NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758].
Financial services and Labuan Securities 117 "Labuan Islamic investment banking business" means the Islamic investment banking business carried out by a person who is licensed to do so under part VI of the financial services and Securities Act of Islam Labuan 2010;

"business leasing" means the business of leasing or pensubpajakan property on rental for the purpose of the use of such property by the tenant leasing regardless of whether it is with or without an option to buy the property, including Charter ships, and for the purposes of this definition, "property" includes any plant, machinery, equipment or other items attached to or to be mounted on the ground and "Charter vessel" means a bareboat charter only and does not include the carriage of passengers or cargo via sea or carter ships in navigation or based on time;

"bank" means a licensed bank as defined in * of the banking and financial institutions Act 1989 or Islamic banks as defined in * * the Islamic Banking Act 1983;

"money broker business" means a business transaction between buyer with arrangements available in the money market or foreign exchange intermediaries as a broker fee paid or payable as a reward, but does not include the purchase or sale of foreign currency or dollars as the principal in such markets;

"payment system" means any system of arrangements for the transfer, the clearing or settlement of monies or securities, but does not include — * NOTE — of the banking and financial institutions Act 1989 [Act 372] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758]. ** The ENTRIES — the Islamic Banking Act 1983 [Act 276] was repealed by the Islamic financial services Act 2013 [Act 759] — see sections 282 and 283 of Islamic financial services act 2013 [Act 759].
118 laws of Malaysia ACT 704 (a) payment system established or operated by Bank Negara or operated on behalf of Bank Negara, the Central Bank of Malaysia Act 2009 [Act 701];

(b) the clearing center defined under the capital markets and Services Act 2007;

(c) the internal payment system operated by a person solely for the purpose of its own that do not migrate, clarify or resolve money or securities for third parties; and (d) a system that merely facilitates the start of payment instructions;

"paid-up capital", in respect of the applicant under section 88, 89 and 90 or licensee bank, means the amount of money contributed by the members to it doing business but does not include credit facilities granted to him by the members.

CHAPTER 2 LICENSING of banking business of Labuan, Labuan investment banking business and financial business of Labuan shall be carried out only under the 87. (1) No person shall carry on the business of banking investment banking business of Labuan, Labuan or Labuan financial business unless — (a) such person was the company's Labuan Labuan company or foreign; or (b) that person is banks, Securities and Labuan financial services and holds a valid licence 119 to conduct such business.

(2) any person who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding ten million ringgit or to imprisonment for a term not exceeding five years or both, and in the case of a continuing offence, can in addition, a daily fine not exceeding ten thousand dollars for each day the offence continues to do.



Application for a license to carry out banking business Labuan 88. (1) an application for a license to carry out banking business of Labuan shall be made in writing by or on behalf of the applicant to the Board.

(2) an application for a license to carry out banking business at the company's Labuan Labuan should be accompanied by the following: (a) the applicant's constituent documents duly certified by an officer of the applicant by any other means acceptable to the Board; and (b) a statement of the following: (i) the name, place and date of incorporation of the applicant;
(ii) the principal business of the applicant and principal place of business of the applicant; and (iii) the name and address of the applicant and the Director participants each holding ten per cent of the paid-up capital of the applicant or more;

120 laws of Malaysia ACT 704 (c) a statement regarding the name, address, qualifications, work experience and positions proposed for all officers to be responsible for the management of Labuan banking business of the applicant;

(d) a proposed amendment to the constituent documents of the applicant that the effect is that the sole and exclusive purpose of the company is Labuan is to conduct banking business of Labuan;

(e) if the applicant — (i) is a company which is a subsidiary of a Labuan company holder, a copy of the balance sheet audited on the business of the company the registered holder for every three financial year immediately before the date of the application;

(ii) is a non-subsidiary company off of any corporation, a copy of the balance sheet audited about business with prizes that each holding ten per cent of the paid-up capital of the applicant or more for each of the three financial year immediately before the date of the application;

(f) an assurance be obtained and an undertaking given by the applicant in respect of banking business Labuannya, in such manner and form acceptable to the Board, and guarantee and undertaking shall provide for, inter alia, that — (i) the applicant shall comply with the financial obligations and requirements imposed under this Act and shall settle the liability of the applicant in respect of banking business Labuannya;
Labuan Securities and financial services 121 (ii) no participant applicant who holds ten percent of paid-up capital or more can be changed without the prior written approval of the Board;

(iii) every Director or officer of the principal applicant who is responsible for the management of the banking business of Labuan applicants should be people who are fit and proper and the appointment of a Director or principal officer shall be made only after consultation with the Board.

(3) an application for a license to carry out banking business of Labuan by a Labuan company proposed to be incorporated under the companies act of Labuan 1990 ("Labuan company proposed") should be accompanied by the following: (a) document konstituennya proposed certified accordingly by any authorized officer in accordance with any other means acceptable to the Board;

(b) a statement of the following: (i) the name, place and date of incorporation for the applicant;

(ii) the proposed main business and principal place of business for the applicant; and (iii) the name and address of the Director proposed for applicants and participants suggested that each holding ten per cent of the paid-up capital of the applicant or more;

(c) a statement regarding the name, address, qualifications, work experience and positions proposed for 122 laws of Malaysia ACT 704 all officers who will be responsible for the management of banking business of Labuan applicant;

(d) a copy of the balance sheet audited about business participants proposed that each will hold ten percent of its paid up capital or more for every three financial year immediately before the date of the application; and (e) a statement about an assurance be obtained and an undertaking given by the members suggested that they would cause the company's Labuan a proposed, when incorporated, to get a guarantee and gives an undertaking as referred to in paragraph (2) (f).

(4) an application for a license to carry out banking business in Labuan Labuan company by a foreign should be accompanied by the following: (a) documents duly certified konstituennya by any authorized officer in accordance with any other means acceptable to the Board;

(b) a statement of the following: (i) the name, place and date of incorporation of the applicant;
(ii) the principal business and principal place of business of the applicant; and (iii) the name and address of the applicant and the Director participants each holding ten per cent of the paid-up capital of the applicant or more;

(c) a proposed amendment to the constituent documents of the applicant that the effect is that the purpose of financial services and Labuan Securities sole and exclusive company 123 Labuan foreigners is to conduct banking business of Labuan;

(d) a copy of the balance sheet audited business of applicant for every three financial year immediately before the date of the application;

(e) an undertaking given by the applicant in respect of banking business Labuannya, in such manner and form acceptable to the Board, and undertaking shall provide for, inter alia, that — (i) the applicant shall comply with the financial obligations and requirements imposed under this Act and shall settle the liability of the applicant in respect of banking business Labuannya;

(ii) if the applicant is a foreign company's Labuan, that it shall immediately notify the Board of any change in the members holding ten per cent paid-up capital or more;

(iii) every Director or officer of the principal applicant who is responsible for the business management Labuannya banking should be people who are fit and proper and the appointment of a Director or principal officer shall be made only after consultation with the Board.

(5) an application for a license to carry out banking business of Labuan by a foreign company that wishes to be registered as a foreign company's Labuan under the companies act of Labuan 1990 ("Labuan proposed Foreign Companies") shall be accompanied by the following: 124 laws of Malaysia ACT 704


(a) the constituent document under which the foreign company to be established in Labuan, appropriate certified by any of his officers proposed by any other means acceptable to the Board;

(b) a copy of the balance sheet for every three financial year immediately before the application date;

(c) a statement of — (i) the name, place and date of incorporation of the foreign company;

(ii) the principal business and principal place of business of the foreign company;

(iii) the name and address of the Director of the foreign company;
(iv) the name and address of the participant of the foreign companies each holding ten per cent of the paid-up capital of a foreign company or more;

(v) the name, address, qualifications, work experience and positions proposed for all company officials a proposed foreign Labuan which will be responsible for the management of banking business Labuannya; and (d) an undertaking given by a foreign company such as is mentioned in paragraph (4) (e).

(6) an application for a license to carry out banking business of Labuan by banks should be accompanied by the following: (a) the applicant's constituent document certified accordingly by the applicant by any other means acceptable to the Board; and Labuan Securities and financial services 125 (b) a copy of the balance sheet audited business of applicant for every three financial year immediately before the date of the application;

(c) a statement of the following: (i) the name, place and date of incorporation of the applicant;
(ii) the principal business and principal place of business of the applicant; and (iii) the name and address of the applicant and the Director participants each holding ten per cent of the paid-up capital of the applicant or more; and (d) a statement regarding the name, address, qualifications, work experience and positions proposed for all officers to be responsible for the management of Labuan banking business of the applicant.


Application for a license to run the investment banking business of Labuan 89. An application for a license to run the investment banking business of Labuan shall be made in writing by or on behalf of the applicant to the Board and the provisions of section 88 in relation to banking business of Labuan shall also apply for him except "Labuan banking business" shall be read as "Labuan investment banking business".


Application for a license to conduct financial business Labuan 90. An application for a license to conduct financial business of Labuan shall be made in writing to the Board of 126 laws of Malaysia ACT 704 by or on behalf of the applicant and shall be accompanied by any documents, statements and information as may be determined by the Board.


Additional information 91. The Board may, from time to time, upon receipt of an application under section 88, 89 or 90 and before a determination made, orally or in writing, require the applicant to provide such additional information orally or in writing, or to provide any additional documents, as may be found necessary by the Board for the purpose of determining the suitability of applicants for licences.


Grant of a license by the Board 92. (1) on receipt of an application for a licence under section 88, 89 or 90 and after given all the information and documents required by the Board under this section, the Board may approve the application, with or without conditions, or reject the application.

(2) where the Board rejects the application, the Board shall notify the applicant in writing of the rejection.

(3) if the Board approves an application for a licence under subsection (1), the Board shall issue a license to the applicant upon the applicant meet the conditions imposed under the application for the license.

(4) a licence granted under this section shall remain in force until the license surrendered or revoked in accordance with this Act.

(5) No applicant may be granted a licence bank under this section without the consent in writing of the Board if its capital money was less than ten million ringgit or equivalent amount of financial services and securities Labuan 127 thereto in any foreign currency in cash or in such amount as may be determined in writing by the Board.

(6) the Board may, after consultation with the Minister, by notice in writing to Licensee bank, change the existing terms and conditions or impose such additional terms and conditions, in respect of banks, from time to time as he thinks fit.


Requirements to use, and restrictions on the use of the words "bank Labuan licensed", etc.

93. (1) the holder of the license the bank shall at all times paste or paint, or ensure that always sparks or dicatkan, in a conspicuous place outside his Office and so that each can be read easily, whose name, and the word "licensed" or bank Labuan Labuan investment banks "licensed", as the case may be.

(2) the holder of a licence bank shall, in any bill head, letter paper, printed forms, notices, advertisements, or any other documents issued from his Office and in the course of its business, print in a way easier to view name, his/her license and the word "licensed" or bank Labuan Labuan investment banks "licensed" as the case may be.

(3) No person, who is not a licensee bank, may, without the written consent of the Board, wear or use the word "licensed" bank Labuan, Labuan investment bank "licensed" or any derivative of such words in any language that can be construed as indicating that person carries on the business of banking or investment banking business in Labuan Labuan.

(4) any person who contravenes subsection (3) commits an offence and shall, on conviction, to a fine not exceeding ten million ringgit or to imprisonment for a term not exceeding 128 laws of Malaysia ACT 704 five years or both, and in the case of a continuing offence, in addition, a daily fine not exceeding ten thousand dollars for each day the offence continues to do.


Maintenance of capital adequacy ratio of 94. (1) No licensee may conduct banking business bank Labuan or Labuan investment banking business if its capital money is less than the amount determined in writing by the Board.


(2) every licensee shall maintain the bank at all times, any capital adequacy ratio, which is determined in writing by the Board from time to time and no licensee may conduct banking business bank Labuan or Labuan investment banking business if the capital adequacy ratio specified is not complied with, except with the approval of the Board.

(3) the license the bank shall at all times maintain capital funds to reflect risk dibeban capital ratio as may be specified in writing by the Board from time to time.

(4) the Board may direct the licensee bank to take to correct any deficiency in the ratio determined in accordance with any other means as the Board may think fit.


Amendment or variation of constituent documents of bank licensee 95. (1) every licensee that is a corporation bank Labuan shall, before making any amendment or alteration to any document konstituennya, providing financial services and Labuan Securities 129 Board details of writing of the amendment or variation of a proposed for approval by the Board.

(2) every licensee bank which is a company or a foreign bank Labuan Malaysia shall, within three months after made any amendment or alteration to konstituennya documents, giving the Board a written details about the amendment or variation of such certified accordingly by a Director of that bank licensee in a manner acceptable to the Board.

(3) no holder of a licence bank may make any amendment or alteration to the konstituennya document to the contrary with any written law.

(4) no participant licensee bank which holds fifteen per cent of the paid-up capital of that bank licensee or more can be changed without the prior written approval of the Board and, if the licensee is a company bank Labuan foreign licensees the bank shall immediately notify the Board of any change of the members holding fifteen per cent paid-up capital or more.


The Board shall publish the list of Labuan Labuan investment bank and 96. The Board shall publish every year not later than 31 March of each year a list of all the bank's Labuan Labuan investment bank and existing as at 31 December of the previous year and their license number in the Gazette, and if any licence issued, cancelled or surrendered, after such broadcasting, the Board shall cause to be published a list that has been changed on all bank Labuan Labuan and investment banks and their license number with the Gazette as soon as practicable.


130 the laws of Malaysia ACT 704 CHAPTER 3 OBLIGATIONS of LICENSEE BANK subsidiary and Office 97. Licensee of the bank which is a company of Labuan may, subject to the prior written consent of the Board, open any Office other than the principal place of business in Labuan, or acquire or establish such subsidiary.


Prohibition of certain account 98. (1) no holder of a licence bank may receive any money on deposit or loan is repayable on demand by cheque, drafts, orders or any other instruments issued by the depositor of the bank license.

(2) Every holder of a licence bank shall conduct an investigation with appropriate efforts before opening any account for a client.

(3) any person who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding ten million ringgit or to imprisonment for a term not exceeding five years or both, and in the case of a continuing offence, can in addition, a daily fine not exceeding ten thousand dollars for each day the offence continues to do.





Labuan Securities and financial services 131 financial statements, statistics and information should be submitted to the Board of 99. Licensee shall comply with the requirements of the bank in respect of the financial statements, statistics and information to the Board as specified in the third schedule.

CHAPTER 4 GENERAL PROVISIONS AS to the payment of the deceased's account is 100. (1) Notwithstanding anything in any law or pillars of law, licensee bank can, without submitting the letter of probate or letter of administration, payment of any sums not exceeding an amount equivalent to five thousand dollars found on the deceased's credit to any person submitting satisfactory evidence of — (a) the death of the deceased; and (b) of its rights under the law against the amount of money found on the deceased's credit.

(2) the holder of a licence bank shall not make any payment under subsection (1) if the licensee the bank has received other claims against any money found on the deceased's credit.

(3) the licensee or the Director or officer is not liable in respect of any claim by any person in connection with any payment made in accordance with this section but that person can recover sums due to it legally from the person to whom the payment has been made.
132 laws of Malaysia ACT 704 PART VII LABUAN INSURANCE TERM I preliminary Interpretation 101. (1) in this part, unless the context otherwise requires — "domestic insurance business" means the business of insurance contract matter is — (a) property for the time the contract is made in Malaysia or in transit to or from Malaysia;

(b) vessels or aircraft registered in Malaysia and all liabilities arising from the operation of such ships or aircraft;

(c) life or any contingency relating to any person who, at the time the contract is made, is a resident; or (d) any type of risk with respect to any person who, at the time the contract is made, is a resident;

"business insurance" means insurance business non-business life insurance but includes accident insurance, medical, surgery and hospitalization expenses in relation to any person;

"insurance business" means the business of implementing and carrying out the contract —


Labuan Securities and financial services 133 (a) which protect people against loss or possible loss in respect of the risk to which such person may be exposed; or (b) to pay a sum of money or other thing of value in the event of an incident, and includes reinsurance business;

"insurance licence" means a licence granted under this part;

"the acquisition of insurance" means a person insured by a policy of insurance;

"insurer" means a person who carries on the business of insurance;

"Labuan insurer" means a person who is licensed to conduct insurance business of Labuan;

"Labuan kaptif insurance business" means insurance business off his acquisition was a corporation related to the Corporation or an affiliate for insurers the Labuan or acquisition of the insurance was any other person in respect of which the insurer Labuan has been authorised by the Board to provide insurance or reinsurance;

"Labuan insurance broker" means a person licensed to — (a) arrange for the insurance business of Labuan on behalf of prospective policy owner or the owner of the existing policy;

(b) arrange for Labuan reinsurance business on behalf of any insurers who are seeking reinsurance; or 134 laws of Malaysia ACT 704 (c) analyze the financial circumstances of someone else and prepare plans to meet the needs and financial objectives that person, whether fees imposed on him or her or not;

"Labuan insurance business" means the business of insurance is not a domestic insurance business and transacted in foreign currency, and includes takaful and retakaful business, business insurance kaptif Labuan and any other off insurance business as approved by the Board;

"Labuan insurance Manager" means a person licensed to provide service management or administration in respect of insurance business of Labuan but shall not include an underwriting Manager Labuan;

"Labuan underwriting Manager" means a person, who is not a bona fide employees, licensed to provide underwriting services, including business administration, to one insurer Labuan or more;

"business life insurance" means insurance business relating to any payment of money with it policy policy insured based on death or the occurrence of any contingency dependent on the conclusion or the endless human life and includes any extension side protection and reinsurance of such business;

"Malaysian insurers" means the insurer licensed under * the Insurance Act 1996 [Act 533] or * * Takaful Act 1984 [Act 312];
"net premium income", in relation to a financial year means the premiums receivable under the contract * ENTRIES — the Insurance Act 1996 [Act 553] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758]. * * NOTE — of Takaful Act 1984 [Act 312] was repealed by the Islamic financial services Act 2013 [Act 759] — see sections 282 and 283 of Islamic financial services act 2013 [Act 759].
Financial services and Labuan Securities 135 insurance or reinsurance net of any premium payable for reinsurance arranged with respect to contracts of insurance or reinsurance thereof;

"policy" means a policy of insurance and includes cover note or any contract of insurance in writing whether or not contained in or didalilkan by an instrument in the form of an insurance policy; and any reference to the policy the insurer includes a reference to any policy in respect of which the insurer has any liability, whether or not the policy issued by the insurer or the liability is transferred to the insurer of the other insurers;

"owner's policy" means any person who takes a policy;

"the reinsurance business" means a business with it reinsurer bear part of liability under the contract of insurance other insurer or reinsurer to another;

"reinsurer" means a person who carries on or mengurusniagakan or submit himself as running or mengurusniagakan reinsurance business;

"funds work" means — (a) in relation to the company's Labuan, paid-up capital which is not tercacat by the loss; and (b) in relation to the company's Labuan branch or foreign insurers are Malaysia, the surplus assets against liabilities which shall be maintained in its Office in Labuan.

(2) if fifteen percent or more of voting shares of a corporation held by a corporation to another corporation 136 laws of Malaysia ACT 704 who first mentioned shall be deemed to be an associate Corporation to a corporation the other, and any reference in this Act regarding "Corporation affiliate" shall be construed as a reference to the Corporation that the first-mentioned corporation or the other , as the case may be.

CHAPTER 2 BUSINESS LICENSING and RELATED ACTIVITIES INSURANCE LABUAN LABUAN INSURANCE Licensing insurance business insurance related activities and Labuan Labuan 102. (1) No person shall carry out or mengurusniagakan or submit himself to be run or mengurusniagakan any Labuan insurance business unless that person is — (a) the company's Labuan;
(b) the foreign company Labuan; or (c) a branch of a Malaysian insurers, and hold a valid insurance license.

(2) No person shall carry out or mengurusniagakan or submit himself to be run or mengurusniagakan any business as General Manager of insurance underwriting Manager of Labuan, Labuan or Labuan insurance broker or any related activities insurance Labuan others unless that person holds a valid insurance.

(3) except with the written approval from the Board in advance, someone who is not a licensee of insurance cannot be Labuan Securities and financial services 137


wearing or using the word "insurer" Labuan, Labuan insurance "Manager", "underwriting Manager Labuan", "insurance broker Labuan" or any derivative of that word in any language that can be construed as indicating that the person carries on insurance business insurance related activities or Labuan Labuan.

(4) this section shall not apply to the holder of a licence bank as defined in part VI, which distribute insurance products for insurers Labuan subject to approval from the Board in advance.


Applications for licences to carry on insurance business insurance Labuan 103. (1) every applicant for a licence to carry on the insurance business insurance Labuan shall be to the satisfaction of the Board that — (a) the applicant is, or will be, a company of Labuan or Labuan company or branch of a foreign insurer Malaysia;

(b) the funds of the applicant's work — (i) in the case when the applicant proposes to carry on insurance business either life or general insurance business, is at least seven million five hundred thousand dollars or equivalent in any foreign currency or any amount or kind of other currencies as determined by the Board;

(ii) in the case when the applicant intends to conduct reinsurance business alone-138 laws of Malaysia ACT 704 points, is at least ten million dollars or equivalent in any foreign currency or any amount or kind of other currencies as determined by the Board; or (iii) in the case when the applicant proposes to carry on insurance business kaptif Labuan alone, is at least three hundred thousand dollars or equivalent in any foreign currency or any amount or kind of other currencies as determined by the Board;

(c) the amount of money specified in paragraph (b) stored in the applicant's account with a bank in Labuan, as proved by the certificate of the bank that, at the time the application is made;

(d) the person in control of the directors and officers, the principal applicant is a fit and proper person to have to do with insurers Labuan;

(e) the applicant either — (i) has established, or will create its Labuan with sufficient knowledge and expertise about Labuan insurance business to be carried out; or (ii) has appointed, or shall elect, an underwriting Manager Labuan or Labuan licensed insurance managers in Labuan with sufficient knowledge and experience about Labuan insurance business to be carried out, except in respect of applicants applying for business financial services and Labuan Securities insurance 139 kaptif Labuan, Labuan underwriting Manager only only be appointed; and (f) the applicant will be members of the Association of insurers of Labuan.

(2) Notwithstanding paragraph (1) (b), the Board may, after taking into account the extent and abundance of Labuan insurance business to be undertaken by the proposed applicant, determine the amount of funds the lower works, subject to the applicant provide sufficient assurance on such terms and conditions as may be accepted by the Board for the amount of the difference.

(3) every application for a licence to carry on insurance business of Labuan shall — (a) be in writing and submitted to the Board;
(b) state whether the Labuan insurance business relates to business life insurance or general insurance business;

(c) state the type of Labuan insurance business, as the case may be, to be carried out under license of insurance; and (d) stating the applicant's business planning; and (e) accompanied by — (i) a copy of — (aa) applicant's constituent document certified accordingly by the Director or an officer of the applicant;

(bb) resolution of the Board and general meeting of the applicant, if any, confirmed with 140 laws of Malaysia ACT 704 accordingly by the Director or an officer of the applicant, which authorizes the applicant to apply for a license in insurance;

(cc) the certificate of incorporation or registration of the applicant, as the case may be, which are accepted by the registration authority of the place of incorporation or the original applicant; and (dd) except in respect of an application to carry on insurance business kaptif Labuan, a letter of awareness of supervisory authority of the applicant's country of origin or any other authority determined by the Board;

(ii) a copy of the applicant's annual accounts for the three consecutive years immediately before the application, if applicable;

(iii) a statement regarding — (aa) the name, place and date of incorporation of the applicant;

(bb) the name, address, qualifications and experience of the directors and officers responsible for the overall management of the Affairs of the applicant; and (cc) the name and address of every Member who holds fifteen per cent of the voting shares or more;

(iv) a declaration by the applicant regarding the honesty of Directors and officer applicants Labuan Securities and financial services are involved in the management of 141 insurers Labuan a proposed; and (v) in the case of an application by a company of Labuan, an assurance be obtained and an undertaking given, and in the case of an application by a foreign company or a branch in Labuan Malaysian insurers, an undertaking given by the applicant in respect of insurance business Labuannya, in such manner and form acceptable to the Board, and guarantee and undertaking shall make provision , among other things, that — (aa) the applicant shall comply with the financial obligations and requirements imposed under this Act and shall settle the liability of the applicant in respect of insurance business Labuannya;

(bb) if the applicant is a company of Labuan, there are participants of the applicant who holds ten percent of paid-up capital or more can be changed without the prior written approval of the Board and, if the applicant is a foreign company, Labuan that it will immediately notify the Board of any change of the members holding ten per cent paid-up capital or more; and (cc) every Director or officer of the principal applicant who is responsible for

business management Labuannya insurance should be people who are fit and proper and the appointment of directors or the 142 laws of Malaysia ACT 704 principal officials shall be made after consultation with the Board.

(4) paragraph (3) (e) (v) shall not apply to an application for an insurance business if the policy owner kaptif Labuan was a related corporation or affiliate Corporation of the insurers.

(5) the Board may require from the applicant any information or other documents as determined by the Board for the purpose of determining the application.

(6) the matters specified in subsection (5) may be different from the applicant, or class, category or description of the different applicant as determined by the Board.

(7) an application under this section may be made in respect of a person who has not established under the companies act of Labuan 1990 but will be set up so if that person got insurance licence, and where such requirements of subsection (1) may be varied by the Board as he thinks fit.


Application for the insurance license to carry out related activities insurance Labuan 104. (1) every applicant for a licence to carry on the insurance business as the Manager of insurance underwriting Manager of Labuan, Labuan or Labuan insurance broker shall be to the satisfaction of the Board that — (a) the person in control of the directors and officers, the principal applicant is the person who is fit and proper;

(b) the applicant is able to maintain enough money in its business to cover the expense of the financial services and securities operations Labuan Labuan 143 and management for at least six months;

(c) in respect of an applicant for insurance license to conduct business insurance Manager Labuan or Labuan underwriting Manager — (i) the applicant has established, or undertakes will create its Labuan with sufficient knowledge and expertise about Labuan insurance business to be carried out; or (ii) the applicant has appointed, or undertakes will appoint, a manager of insurance underwriting Manager Labuan Labuan or Labuan licensed with sufficient knowledge and experience about Labuan insurance business to be carried out;

(d) in respect of an applicant for insurance license to conduct business insurance broker Labuan — (i) the applicant has established, or undertakes will create its Labuan with sufficient knowledge and expertise about Labuan insurance business to be carried out; or (ii) the applicant has appointed, or undertakes will appoint, a manager of insurance licensed in Labuan Labuan with sufficient knowledge and experience about Labuan insurance business to be carried out;

(e) the applicant has either obtaining or undertakes will get any professional indemnity insurance policy of not less than two million five hundred 144 laws of Malaysia ACT 704 thousand ringgit or equivalent in any foreign currency or any amount or kind of other currency as determined by the Board, and continue to be indemnified under the policy throughout its operations in Labuan;

(f) the applicant own any qualifications as determined by the Board; and (g) the applicant undertakes will be the members of the Association of insurers of Labuan.

(2) every application for a licence to carry on business as an insurance Manager, underwriting Manager Labuan Labuan or Labuan insurance broker shall — (a) be in writing and submitted to the Board; (b) state the type of business to be conducted under the license of the insurance; and (c) accompanied by — (i) a copy of — (aa) applicant's constituent document certified accordingly by the Director or an officer of the applicant;

(bb) resolution of the Board and general meeting of the applicant, if any, have been duly certified by the Director or an officer of the applicant, which authorizes the applicant to apply for a license in insurance;

(cc) the certificate of incorporation or registration of the applicant, as the case may be, which are accepted by the financial services and Labuan Securities registration authority 145 in the place of incorporation or the original applicant; and (dd) a letter of awareness of supervisory authority of the applicant's country of origin or any other authority determined by the Board;

(ii) a copy of the applicant's annual accounts for the three consecutive years immediately before the application, if applicable;

(iii) a statement regarding — (aa) the name, place and date of incorporation of the applicant;

(bb) the name, address, qualifications and experience of the directors and officers responsible for the overall management of the Affairs of the applicant; and (cc) the name and address of every Member who holds fifteen per cent of the voting shares or more;

(iv) a declaration by the applicant regarding the honesty of Directors and officer applicants who will be involved in the management of the insurance Manager Labuan proposed, an underwriting Manager Labuan Labuan insurance broker recommended or proposed, as the case may be;

(v) in the case of an application by a company of Labuan, an assurance be obtained and an undertaking given, and, in the case of an application by a foreign company or Labuan 146 laws of Malaysia ACT 704 branches of a Malaysian insurers, an undertaking given by the applicant in respect of business insurance Manager, underwriting Manager Labuan Labuan or Labuan insurance broker, as the case may be , in such manner and form acceptable to the Board, and guarantee and undertaking shall provide, inter alia, that — (aa) the applicant will comply with the financial obligations and requirements imposed under this Act and shall settle the liability of the applicant with respect to the business manager of insurance underwriting Manager of Labuan, Labuan or Labuan insurance broker, as the case may be;

(bb) if the applicant is a company of Labuan, there are participants of the applicant who holds ten percent of paid-up capital or more can be changed without the prior written approval of the Board and, if the applicant is a foreign company, Labuan that it will immediately notify the Board of any change of the members holding ten per cent capital

paid up capital or more; and (cc) every Director or officer of the principal applicant who is responsible for the business management of the insurance Manager, underwriting Manager Labuan Labuan or Labuan insurance broker, as the case may be, shall be a fit and proper person and appointment of financial services and Labuan Securities Director or principal officer of 147 shall be made after consultation with the Board.

(3) the Board may require from the applicant any information or other documents as determined by the Board for the purpose of determining the application.

(4) the matters specified under subsection (3) may be different from the applicant, or class, category or description of the different applicant as determined by the Board.


Grant of 105 insurance license. (1) on receipt of an application for an insurance licence, the Board may approve the application, with or without conditions, or reject the application.

(2) where the Board rejects the application, the Board shall notify the applicant in writing of the rejection.

(3) if the Board approves the insurance license under subsection (1), the Board shall issue the insurance license to the applicant.

(4) the Board may specify the types of activities that can be undertaken by the licensee in the insurance insurance license.

(5) An applicant who is aggrieved by the decision of the Board under subsection (1) to reject the application, may within thirty days after the decision is communicated to him, appeal to the Minister in writing.

(6) insurance licensees shall comply with any conditions imposed under the licence granted under subsection (1) during the period of the license in force.
148 laws of Malaysia ACT 704 (7) a licence granted under this section shall remain in force until the license surrendered or revoked in accordance with this Act.

(8) the Board may, after consultation with the Minister, by notice in writing to the licensee the insurance change the terms and conditions of existing or impose such additional terms and conditions, in respect of an insurance license, from time to time as he thinks fit.


Publication of a list of all insurance licensees 106. The Board shall publish every year not later than 31 March of each year a list of all licensees insurance existing at 31 December of the previous year and their license number in the Gazette, and if any license issued, cancelled or surrendered, after publication, the Board shall cause a list that has been changed on all insurance licensees and their license number with published in the Gazette as soon as practicable.


Continuation of the licensing requirements of 107. (1) every insurer Labuan Labuan shall be a company before making any amendments or changes to any konstituennya documents, or before any change of the person controlling, Director or officer of the principals, provide details in writing to the Board on the amendment, alteration or change of a proposed, for the approval of the Board.

(2) every insurer Labuan is a foreign company shall, prior to the Labuan make any change of their principal officer, provide details in Labuan Securities and financial services 149 in writing to the Board regarding any proposed changes to the Board's approval.

(3) every insurer Labuan Labuan company is a foreign or a branch of Malaysian insurers shall notify in writing within three months after the making of any amendment or changes to any konstituennya documents, or any change of those who control or its directors and give details in writing to the Board on the amendment, alteration or change of the duly certified by a Director of the Labuan insurers in a manner acceptable to the Board.

(4) every licensee insurance shall immediately inform the Board of any amendments or changes to any information which has been provided to the Board in relation to an application for the insurance license.

(5) No insurer Labuan can make any amendments or changes to the document konstituennya to the contrary with any written law.

(6) if the insurer is a company's Labuan Labuan, Labuan insurers no attendees that holding fifteen per cent paid-up capital or more can be changed without the prior written approval of the Board and, if the insurer is a company's Labuan Labuan foreign insurer shall immediately notify the Board of any change of the members holding fifteen per cent paid-up capital or more.





150 laws of Malaysia ACT 704 FINANCIAL REQUIREMENTS and TERM 3 DUTIES and RESTRICTIONS on LICENSEE INSURANCE Appointment actuarial 108. Every insurer off life insurance business shall appoint an actuary every year within such period as may be determined by the Board.


Solvency margin of 109. Every insurer Labuan, including a licensee who carries on insurance business insurance kaptif Labuan, must ensure that the value of its assets exceed the amount of its liability arising with a margin in an amount or calculated in such a way specified in writing by the Board from time to time.


Separate accounts shall be kept by the insurer Labuan 110. (1) every insurer Labuan shall keep accounts and money in respect of insurance business Labuannya separate from the money is another.

(2) every insurer carrying on business in Labuan both life insurance and general insurance business shall keep accounts and monies in respect of insurance business separate from his life and money in respect of general insurance business.

(3) every insurer Labuan is a branch of Malaysian insurers shall keep accounts in respect of insurance business Labuannya separate financial services and Labuan Securities 151 from the accounts in respect of insurance business

domestic use conducted in Labuan.


Presentation of the financial statements 111. Every insurer Labuan shall comply with the requirements relating to the production of financial statements as set out in the third schedule.


The subsidiaries and offices of insurance licensees 112. Insurance licensee is a company of Labuan may, subject to the prior written consent of the Board, open any Office other than the principal place of business in Labuan, or acquire or establish such subsidiary.


Restrictions on business by insurers Labuan 113. (1) No insurer Labuan can undertake any business activities in Labuan or elsewhere from its Office in Labuan Labuannya insurance business or other business activities related to or for the purpose of insurance business of Labuan such.

(2) Notwithstanding the definition of "Labuan insurance business" and notwithstanding subsection (1), an insurer Labuan reinsurance can run domestic insurance business, including reinsurance domestic insurance business transacted in the Malaysian currency and any other business as may be determined by the Board.

(3) No insurer Labuan can act on behalf of the insurers off the insurance Manager other Labuan or Labuan underwriting Manager unless 152 laws of Malaysia ACT 704 if insurers who first mentioned has been given an insurance license to conduct business as an insurance Manager Labuan or Labuan underwriting Manager, as the case may be.


Restrictions on insurance Manager duty and Labuan, Labuan underwriting Manager and insurance broker Labuan 114. (1) No licensed insurance managers Labuan can provide any services other than the services of administration and no licensed underwriting Manager Labuan can provide any services other than underwriting services.

(2) No licensed underwriting Manager can provide the services of Labuan underwriting in or from Labuan to any person who is not licensed under this Act or to any business conducted by the company registered under the Insurance Act 1996 * or by the takaful operator registered under ** the Takaful Act 1984.

(3) No licensed insurance broker Labuan can act as broker in respect of domestic insurance business, but insurance broker licensed Labuan reinsurance can handle domestic insurance business, including reinsurance domestic insurance business transacted in the Malaysian currency.

(4) every insurance Manager or licensed Labuan Labuan underwriting Manager acting on behalf of a licensed insurer Labuan shall maintain the money is separate from money insurers Labuan and cannot use money insurers Labuan to * RECORDS — the Insurance Act 1996 [Act 553] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758]. * * NOTE — of Takaful Act 1984 [Act 312] was repealed by the Islamic financial services Act 2013 [Act 759] — see sections 282 and 283 of Islamic financial services act 2013 [Act 759].
Financial services and Labuan Securities 153 explain any expense or liability other than with respect to the Labuan insurance business.


List of insurers Labuan shall be given by the Manager of insurance underwriting Manager Labuan Labuan and 115. Every licensed and insurance Manager Labuan Labuan licensed underwriting Manager shall, within thirty days from the end of the financial year, submit to the Board, in any form and manner determined by the Board, a list of all insurers Labuan provided services administration by licensed insurance managers or service the Labuan underwriting by the licensed underwriting Manager Labuan.


Conduct of business 116. (1) every insurer Labuan shall — (a) conducts business with diligence and care in accordance with the principles of good insurance;

(b) in accordance with international accounting standards generally accepted or any other standard approved by the Board;

(c) register all assets on its name, or the name of the custodian or nominee for insurers Labuan if assets acquired in the name of the custodian or nominee, and in the case of bearer shares, bearer shares it holds in safe custody; and (d) indicate clearly at the head of his letter, stationery and other documents containing her name that 154 laws of Malaysia ACT 704 insurer is licensed under this Act, together with the number of their insurance license.

(2) No insurer Labuan can advertise or publish, in any form, the information is not correct or which are likely to mislead another person in relation to the law applicable to insurers Labuan and business and activities thereof or the financial status of the Labuan insurers or insurance or reinsurance plan or any other matter in respect of insurance business Labuannya.

(3) paragraph (1) (a) and (d) and subsection (2) shall apply with the necessary modifications for the insurance Manager, underwriting Manager licensed Labuan Labuan Labuan insurance broker is licensed and licensed.

CHAPTER 4 PAYMENT POLICY MONEYS UNDER the POLICY of LIFE and PERSONAL ACCIDENT POLICY adoption of this term of the 117. In this Term, a reference to the policy is a reference to life policy, including the policy of life under section 23 civil law Act 1956 [Act 67], and a personal accident policy taken by the policy owner upon his soul itself provides for the payment of money policy when he died.


The power to make the naming of 118. (1) a policy owner who has attained the age of eighteen years can nominate a right to receive the policy moneys payable when he dies under the policy and financial services of Labuan Securities 155 by notifying insurers that Labuan in writing of the name, date of birth, number of the identity card or birth certificate number and address of the nominee at the time the policy was issued.

(2) If a nomination made after the policy is issued,

policy owner shall submit the policy together with details of the nominee referred to in subsection (1) for endorsement insurers Labuan of naming on the cover.

(3) a nomination made under subsection (1) shall be witnessed by a person who is of unsound mind who have reached the age of eighteen years and not a nominee named under that subsection.

(4) the insurer Labuan — (a) shall display clearly in the nomination form a notice that the policy owner shall deliver the benefits of the policy to her nominee if his intention is that nominee of his, other than his spouse, his son or mother or father, receive the policy benefits beneficially and not as executor;

(b) shall record the nomination and details of the nominee in the register of its policies; and (c) shall be registered in the register of the naming policy made under subsection (1) and the nomination shall commence from the date of nomination is registered.

(5) failure to comply with subsection (4) shall affect the validity of the nomination unless proved otherwise that notifications should be about the nomination has been made by the policy owner and given to insurers of Labuan for endorsement on the policy.
156 the laws of Malaysia ACT 704 (6) a nomination made under subsection (1) may be made for the benefit of a person or persons and if the person named is more than one person, the policy owner may direct that specified part paid to the person named and in the absence of instructions from the owner of the policy, the insurer shall pay the portion that Labuan equal to that person.


The cancellation of nominations 119. (1) a nomination, including a nomination for which section 121 applies, shall be cancelled — (a) when a nominee dies, or if there is more than one nominee, the nominee's dead, when all during the lifetime of the policy owner;

(b) by a written notice given by the owner of the policy; or (c) by any nomination later.
(2) subject to subsection (1), a nominee cannot be cancelled by the will or by any act, event or other means.

(3) if there is more than one nominee and each nominee died before the owner of the policy, if there are any naming later by the owner of the policy for the disposal of the dead parts of the nominee, the insurer shall pay the portion of the Labuan nominee who died to the nominee who is still alive according to the ratio of their respective Division.




Labuan Securities financial services and Payment Policy moneys 120 157. (1) subject to subsection (2), if a policy owner dies having made a nomination, the insurer shall pay the policy moneys Labuan policy owner dead in accordance with the instructions of the naming on receipt of a claim from the nominee and the claim is accompanied by the proof of the death of the policy owner.

(2) If a nominee does not claim the policy moneys within two months after the insurer Labuan aware of the death of the owner of the policy, the insurer shall notify the Labuan nominee in writing at his last known of its rights to claim the policy moneys.

(3) If a nominee does not claim the policy moneys within twelve months after the notification under subsection (2), section 124 shall apply as if no nomination has been made.

(4) where a nominee, other than a nominee under section 121, dying after the death of the policy owner but before any money policy has been paid to him as nominee, section 119 or section 124 shall apply to the policy, as the case may be.


Trustee for policy moneys 121. (1) a nomination by the policy owner, other Muslim policy owner, shall establish a trust for the benefit of the nominee of the policy moneys payable upon the death of the policy owner, if — (a) the nominee is a husband or wife or his son; or 158 laws of Malaysia ACT 704 (b) when there is no spouse or child living at the time of the nomination, the nominee is the mother or his father.

(2) a payment under subsection (1) shall not form part of the estate of the policy owner dies or subject to his debts.

(3) the owner of the policy, through the policy, or by a written notice to the insurer of Labuan, may appoint trustees for money policy is and if there is no trustee — (a) the nominee credible to contractual; or (b) if the nominee is not competent to contract, parent nominee credible and if there is no parent, the Trustee's Office, shall be the trustee of the policy moneys and acceptance of someone the Trustees shall be a discharge to insurer Labuan for all liability in respect of the policy moneys paid to the trustee.

(4) a policy owner cannot make arrangements on a policy to which subsection (1) applies to cancel a nomination under the policy, by changing or surrender the policy, or to assign or back up the policy as security without the written consent of the trustee.

(5) no nothing in this section affects a person's creditors of the owner of the policy from applying to the Court for a declaration that this section, in whole or in part, shall not apply to any financial services and Labuan Securities 159 certain policies on the ground that premiums under the policy have been paid to cheat the creditors.


Nominee other than a nominee under section 121 122. (1) a nominee, other than a nominee under section 121 shall receive the policy moneys payable on death of the policy owner as executor and not merely as beneficiaries and any payment to the nominee shall form part of the estate of a deceased policy owner and subject to its debts and insurers Labuan shall be discharged from liability in respect of the policy moneys paid.

(2) subsection (1) apply to nominee Muslim policy owner who, upon receipt of policy moneys shall divide the policy moneys in accordance with shariah principles.



Money policy diserahhakkan or backed up 123. (1) despite the nomination under section 118 or the creation of a trust under subsection 121 (1), if the policy moneys, in whole or in part, has been pledged as collateral or diserahhakkan to someone, the person who is entitled to claim under the security or assigns shall be given priority override claims the nominee and, subject to preservation of rights under the mortgage or assignment Labuan, the insurer shall pay the balance of the policy moneys to the nominee.

(2) If more than one person who is entitled under the collateral or the assignment, the rights of the person who is entitled under the security or the assignment shall be in accordance with the respective order of priority according to the priority date of the assignment or mortgage created, with both the security and the assignment will count as a class for this purpose.
160 the laws of Malaysia ACT 704 Payment money policy if there is no nomination 124. (1) If a policy owner dies without making a policy naming, subject to section 123, Labuan insurers shall pay money policy the policy owner who died to applicants who submit the granting of Probate or letter of Administration or the distribution Order.

(2) subject to subsection (1), Labuan insurers can pay to the spouse, child or parent policy owner according to the order of priority and if there is more than one wife, child or parent, in equal portions to each person in the class and if there is no spouse, child or parent and — (a) if the policy moneys not exceeding one hundred thousand ringgit or equivalent value in foreign currency or any the amount of currency or type of other more as Labuan, insurers can pay all the money the policy without requiring the granting of Probate or letter of Administration or order Division — (i) to someone who satisfy the insurers Labuan as ought to be given the right and the grant of Probate or letter of Administration or order Distribution; or (ii) to any person to satisfy the insurers Labuan as beneficially entitled to the estate of a deceased policy owner thereof; or (b) if the policy moneys that are more than one hundred thousand dollars or equivalent in foreign currencies, or any amount or kind of other currency as more companies, financial services and insurance Labuan Labuan Securities 161 may pay to the person referred to in subparagraph (a) (i) or (ii) the amount referred to in that paragraph and subject to subsection (6) , pay to such person the balance of the policy moneys the granting of Probate or letter of Administration or the distribution Order submitted.

(3) in this section, a reference to the policy moneys is a reference to the aggregate amount of money policy in respect of all policies of the owner of the policy by the insurer Labuan is if there is no nomination.

(4) the granting of Probate or letter of Administration or order the allocation granted or having effect as if has been granted, in respect of personal estate which includes the policy moneys, by a court in Malaysia or a competent authority outside Malaysia, or a copy of the terperakunya shall be sufficient evidence to insurers to pay money that Labuan the policy to the person to whom the grant is made.

(5) the insurer can receive a grant of Labuan Probate or letter of Administration or the distribution Order or any other document that has the same effect, which is given by a court in Malaysia or a competent authority outside Malaysia, as evidence sufficient to pay the policy moneys policy owner who died to the person to whom the grant has been made , provided that the granting of Probate or letter of Administration or order an appropriation or other document having the same force that has been registered with the appropriate court in Malaysia and sealed in accordance with the Probate and Administration Act 1959 [Act 97].

(6) If, after the expiration of twelve months after the payment under paragraph (2) (b) made by an insurer of Labuan, the balance of the policy moneys still due and no claim has been made by a person who is 162 laws of Malaysia ACT 704 holds the grant of Probate or letter of Administration or order of distribution, the insurer shall pay the remaining money Labuan the policy to the person who receives the payment of the first of the policy moneys.

(7) the policy moneys payable under this section shall be deemed to have been duly paid and insurers Labuan shall be released from liability in respect of the policy moneys so paid even if there is no or there are invalidity, or any defects in, the granting of Probate or letter of Administration or the distribution Order or any other document that has the same effect.

(8) a person to whom a payment is made under this section shall give a receipt that shall be deemed to be a valid receipt.


Payments to people who are not competent to contract to 125. If a person who has not attained the age of eighteen years, or certified by a medical practitioner in the civil service as not of unsound mind and no pusakanya property Committee has been appointed, or be unable, by reason of the weakness of mind or body, to manage itself and the property and Affairs of Labuan, insurers — (a) in the case of a nominee under subsection 121 (1) — (i) if the policy moneys is ten thousand dollars or equivalent in a foreign currency or less than that or any amount or kind of other currency as determined, can pay to someone who satisfy the insurers Labuan that he will use the policy moneys for the remuneration and benefits of the nominee in financial services and Labuan Securities down 163 subsection 121 (1), or a person to whom the policy moneys payable under subsection 124 (2) or (6) , subject to the implementation of the undertaking by such person that such policy moneys will be used solely for the remuneration and benefits of the nominee; and


(ii) if the money policy is more than the amount specified in paragraph (a), shall pay to the holder of a public trust or a trust company named by the public trust; or (b) in the case of a person to whom the policy moneys payable under subsection 124 (2) or (6), shall pay to the Trustee Company amanah Raya a Labuan named by the Trustees Raya.


Division of policy moneys in the normal course of the administration of 126. A person to whom the policy moneys payable under section 124 shall receive the policy moneys as executor and not merely as beneficiaries and shall divide the policy moneys in the normal course of the administration of the deceased's estate in accordance with the terms of the will of the deceased, and if there is such a will, under the laws applicable to the Administration, distribution and disposal of property pusakanya because his death without a will.


This term to overcome policy and any other written law 127. (1) this Term shall have effect in relation to a policy in force on or after the beginning of the effect, and in relation to a nomination of 164 laws of Malaysia ACT 704 made before, on or after the beginning of the effect, notwithstanding anything contained in the policy, and there is nothing contained in a policy can reduce, or interpreted as reduced by any manner or to any extent This session.

(2) the Term shall have full force and effect notwithstanding anything which is not in accordance with or contrary to any other written law relating to probate, administration, distribution or disposal of the deceased's estate, or in any specific area of law, practice or custom relating to the matter.

CHAPTER 5 WINDING Winding insurers Labuan 128. (1) the Board shall become a party to any petition for the winding up of any insurers Labuan.

(2) the Board may submit a petition for the winding up of insurers Labuan or insurance business Labuannya on the ground programs for discharging any liability or when it suspended payments to his creditors.

(3) for the purposes of subsection (1) and (2), the Court shall take into account the interests of the owner of the policy, other clients and creditors of the insurer Labuan.

(4) in any winding up of the insurer Labuan, Labuan or when insurers become insolvent, shall be paid out of the assets in the funds of the insurance or financial services and Labuan Securities 165 other insurers Labuan led all other unsecured debt — (a) first, the costs and expenses of the winding up, including the cost of the liquidator or receiver;

(b) second, all wages or salary, whether or not obtained wholly or partly as a Commission, including any amount payable as an allowance or reimbursement under any employment contract or award or agreement regulating employment conditions, for any employee not exceeding one thousand five hundred dollars or the equivalent value in foreign currency or any amount or kind of other currency as may be determined from time to time in respect of the services provided by him to the Labuan insurers within four months prior to the commencement of the winding up;

(c) Thirdly, all amounts payable in respect of workmen's compensation, under any written law relating to workmen's compensation, which accrued before the commencement of the winding up;

(d) keempatnya, all remuneration payable to any employee in respect of vacation leave, or in the case of his death to any other person on his behalf, is entitled to accrued in respect of any period prior to the commencement of the winding up;

(e) kelimanya, all amounts owed in respect of contribution payable within twelve months following the commencement of the winding-up by immediately before insurers Labuan as an employer of any person under any by-166 laws of Malaysia ACT 704 written law relating to the retirement fund or employees or under any superannuation or pension benefit which is a scheme approved under any federal law relating to income tax;

(f) keenamnya, the amount of all federal tax assessable under any written law prior to the date of commencement of the winding up or assessed at any time before the expiry of the time set for proving the debt;

(g) his seventh consecutive, all liabilities and expenses that can be linked with business insurance Labuannya of the class to which a specific insurance fund is established; and (h) kelapannya, net liabilities and expenses that may be associated with Labuan insurance business from class to which a specific insurance fund referred to in paragraph (g) applies has been met in full, the amount required to make up any deficiency in other insurance fund.

(5) amount in each class which is specified in subsection (4) shall be staged according to the order specified in that subsection but of the same type of debts shall be staged equally between themselves, and must be paid in full, unless the assets in the Fund Insurance insurers Labuan is not sufficient to explain it, and in the case so it shall be reduced by the same rate flat between them.

(6) the provisions of this section shall have effect notwithstanding anything which is not in line with it or in the opposite thereto in any other written law.
Labuan financial services and Securities MANAGEMENT COMPANY 167 PART VIII Interpretation 129. In this section, unless the context otherwise requires — "management company" means the provision of processing services Treasury and any other services, and to any person, as permitted by the Board;

"management company" means a company incorporated or its Labuan Labuan foreign registered under this Act for the purpose of undertaking or offering to

farm business management company.


Express 130 management company. (1) the Board may keep a register of all management company licensed under this section.

(2) the register kept under subsection (1) shall — (a) the information required under paragraph 131 (2) (c) in respect of each management company licensed under this part;

(b) the date of grant of the license; and (c) if the licence is cancelled, the date pembatalannya.
(3) the Register shall be in such form as may be determined by the Board.
168 the laws of Malaysia ACT 704 Applications for licence 131. (1) No person shall, unless a company is Labuan incorporated, or a foreign registered company Labuan, Labuan under the companies Act, 1990, may apply to the Board for a license to conduct business management company.

(2) an application under subsection (1) shall — (a) made in the manner determined by the Board; and (b) accompanied by — (i) any of the prescribed application fee;
(ii) a statement of financial and human resources and administrative facilities on the applicants to conduct its business with reliable and efficient; and (iii) any other document or information required by the Board with reasonable for the purpose of considering the application;

(c) consists of — (i) the address of applicant's place of business and its delivery address in Labuan;

(ii) the name and address of a person who is domiciled in Labuan is authorised to represent the applicant and to accept delivery on his behalf; and (iii) the address of any place of business of the applicant may have outside Labuan.

Labuan Securities and financial services 169 (3) where any information referred to in paragraph (2) (c) changed at any time after submission, the applicant, after given a licence under this section shall give the particulars of the change in writing to the Board within one month from the date of such licence granted or within one month after the change is made, whichever is later.


Grant of licences 132. (1) the Board may give or refuse to give license to any applicant.

(2) the Board may not give a licence unless he is satisfied that the applicant — (a) has a pretty good reputation for doing business management of the company;

(b) has or available for her knowledge, expertise, resources and adequate facilities required for the administration or management of its business properly;

(c) have sufficient financial resources that can be used to enable them to conduct its business effectively and clarify its liability; and (d) will be able to comply with any conditions imposed by the Board.

(3) Notwithstanding subsection (2), the Board shall refuse an application if diputuskannya that a licence should not be granted in the public interest.

170 laws of Malaysia ACT 704 (4) a licence may be granted subject to such terms, conditions, restrictions or limitations as the Board may think fit.

(5) a licence shall be — (a) in such form as may be determined;
(b) received in all courts as prima facie evidence of the facts stated therein;
and (c) remain in force until the license is revoked.
(6) if the Board gives a licence to an applicant, the Board shall issue a license to the applicant on payment of the license fee as may be prescribed.

(7) every licence issued under this part shall contain the date of the license is given.

PART IX EXCHANGE'S INITIAL interpretation of TERM 1 133. (1) in this part, unless the context otherwise requires — "business day" means a day in any part of it facilities Exchange established under this section available to the commercial agent for the purpose of trade or financial services and Labuan Securities 171 that may become available if not for the suspension of trading was ordered by the Board under section 143;

"Committee" means the person responsible for all matters relating to the listing requirements, licensing, trade and other matters relating to the securities market;

"bursa" includes a body corporate established as bursa securities under sections 134 and Labuan international financial exchange, which was established by the Minister under section 30 * Act Labuan Offshore securities industry 1998 [Act 579] approved and recognized immediately before the effective date;

"listing sponsor" means a person licensed by the bursa established in accordance with this part, in accordance with kaedah-kaedahnya to carry out functions as a listing sponsor;

"Secretary" means the Secretary at that time for exchanges established under this part and includes any person acting or Assistant Secretary;
"securities market" means a market or a place where, or such facilities through it — (a) an offer to sell, buy or swap securities made or received on a periodic basis;

(b) an offer or invitation is meant, or that may be reasonably required by expected, will produce, either directly or indirectly, in the making or acceptance of an offer to sell, buy or exchange of securities, typically made; or * NOTE — Act Labuan Offshore securities industry 1998 [Act 579] has been repealed by the Financial Services Act And Labuan Securities 2010 [Act 704] — see section 201 of the Financial Services Act And Labuan Securities 2010 [Act 704].
172 the laws of Malaysia ACT 704 (c) information on prices with it or consideration for which a particular person or class of persons intending to sell, buy or swap, or may be reasonably expected to sell, buy or swap, security is usually given;

"trading agent" means a person who is licensed and permitted to conduct business transacts securities according to the rules of bursa established pursuant to this section.

CHAPTER 2 Establishment of the BURSA bursa 134. The Board may approve an enterprise Labuan to become a bursa in Labuan in accordance with such terms as he thinks fit.


By-laws of bursa


135. The Board may fix any by-laws that expedient or necessary for the purposes of implementing the provisions and matters relating to any of the Exchange.


The rules of the bursa 136. Bursa established under section 134 can make rules that provide for — (a) the conditions and the administration of the licence issued by the Exchange and for the regulation of trade and general behaviour related to listing sponsor the exchange business;
Financial services and Labuan Securities 173 (b) the requirements of the financial, accounting, record keeping, disclosure and capital adequacy that apply to commercial agents and listing sponsor;

(c) the conditions under which securities may be listed for trading in securities markets proposed will be handled by the Exchange;

(d) the conditions governing securities transactions by agents trading and listing sponsor;

(e) the class or classes of securities that can be transacted by agents trading and listing sponsor or listed on the Exchange;

(f) confidentiality in respect of information relating to the Affairs of the exchanges and any trading agent or listing sponsor related to the Exchange's business;

(g) Arbitration disputes arising from or in connection with any securities markets operated by the Exchange;

(h) suspension of trading and cancellation of listing any securities listed on the Exchange;

(i) the conduct of business of the Exchange taking into account public interest accordingly;

(j) a fair and free market for listing and trading of securities; and (k) such other matters as it deems necessary or appropriate by the exchange for the regulation, management and supervision of properly and efficiently the exchanges and securities markets operated by him.
174 the laws of Malaysia ACT 704 regulatory Function of bursa 137. (1) in addition to other functions, an Exchange established under section 134 shall have the functions of regulation and shall — (a) ensure that it regulate the operation of markets and the behavior of market participants with sufficient;

(b) to ensure that internal controls are adequate and efficient;
(c) to ensure that market participants in accordance with the capital adequacy rules;

(d) investigate misconduct or improper conduct by market participants and their representatives that might affect seriously investors or organizations that join the rest and immediately reported to the Board about this incident of misconduct;

(e) investigate possible market abuse, including insider transactions and fraud-related behaviour; and (f) take disciplinary measures or agree with a solution after public hearing.

(2) If an investigation carried out by the Exchange, it shall, in writing, immediately — (a) to report to the Board on the type of investigation and people involved in the investigation; and (b) notify the Board of the status of each of the investigations at any intervals requested by the Board.

(3) when the investigation is complete, the Exchange shall be — financial services and Labuan Securities 175 (a) send to the Board all information in his possession relating to any such investigation; and (b) advise the Board on the results of the investigation and of any disciplinary measures or other actions taken arising from the investigation.

(4) an Exchange established under section 134 shall ensure that sufficient budget provisions made so that the function of the regulation referred to in subsection (1) can be carried out properly.

(5) in this section "internal control" means control system held to evaluate and ensure the effectiveness of a bursa in the exercise of the functions pengawalseliaannya and "market participants" means any investment dealer or any other person who has been granted direct access to the trading on the Exchange.


Authority the Committee is 138. (1) the Affairs of the exchanges established under section 134 shall be managed by a Committee consisting of not less than three persons with relevant experience in financial matters, commercial or law which the Chairman and another person shall be appointed by the Minister and the others by the Board.

(2) subject to this section, the Committee shall have full power and authority in all matters relating to the listing requirements, licensing, securities or the Exchange's transactions and other matters related to it.

(3) subject to section 184, Labuan of the companies Act 1990 shall, unless the context otherwise requires, apply in respect of all of the 176 laws of Malaysia ACT 704 Committee as if that person is a Director for the purposes of the Act.


Dealing securities, 139. (1) No person shall in addition to the commercial agent can engage in or submit itself as engaged in the business of dealing in securities of any Exchange.

(2) any person who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Express agent trading and listing sponsor 140. (1) Exchange established under section 134 shall keep a register of commercial agents and listing sponsor and shall be recorded in it the name and address of agent trading and listing sponsor and date of each agent trading and listing sponsor is admitted and cease to be a commercial agent or organizer listing.

(2) the register of agents trading and listing sponsor shall be available for inspection at the registered office of the Exchange during business hours.

(3) any person may require, and if required, relevant shall immediately convene, a copy of the register or any part thereof on payment of the fee specified in writing by the Exchange.

(4) any payment under subsection (3) shall be made to the Exchange.

Financial services and Labuan Securities Exchange financial statements 141 177. Within six months from the end of each financial year, an Exchange established under section 134 shall file with the Board a copy of, which

certified by the Secretary as a true copy, the Exchange's financial statements for that year prepared and audited in accordance with the provisions of part VI of the companies Act 1990 Labuan.


The person is not deemed to conduct business in Malaysia, 142. No person shall be deemed to be engaging in or carrying on trade or business in Malaysia or Malaysian residents for the purposes of any law by reason only that — (a) the person's listed securities on the securities markets operated by an Exchange established under section 134;

(b) that person is a commercial agent or organizer listing and that transactions made by him or on his behalf through the Exchange; or (c) the person undertaking activities in Labuan incidental to travel should activities referred to in paragraph (a) and (b).


Suspension of trading on bursa 143. (1) the Board may direct any exchange established under section 134 with written notice to suspend trading, or any Committee established under section 138 may, after notifying the Board, suspend trading, at the Exchange either at 178 laws of Malaysia ACT 704 entirely for a period not exceeding five consecutive business day or with respect to the securities specified for such period as it thinks fit by the Board if the Board after consultation with the Committee decided that the proper travel trade that is or may be blocked by reason of force majeure, Act of God, strike or lockout, rebellion or other political unrest or economic or financial crisis, where wherever it occurs.

(2) pursuant to subsection (1), the suspension of the trade shall be conducted according to the rules of the relevant exchange.

(3) the Board may, after consultation with the Committee, directing an Exchange to extend trading suspension under subsection (1) either wholly for the extra period does not exceed five business days in a row or in connection with specified securities for such period as he thinks fit.

(4) the Board shall within two business days ' notice of the extension to a bursa by showing them the reason for the extension and its duration and such notice shall become effective when it is submitted to the Exchange.

(5) the Board shall on the business day following the day of penghantarserahan notice to the Exchange under this section and if requested so by the exchange the exchange the opportunity to be heard about the need for any suspension of trade or any extension of the suspension.

(6) the Board may cancel, withdraw or modify any direction made under subsection (1) and (3) at any time before the expiry of the suspension or the pelanjutannya.


Labuan Securities and financial services Minister's power to suspend the 179 trading 144. (1) without prejudice to section 143, where the Minister is satisfied that it is in the public interest to do so, or that it is expedient for the protection of investors or for the proper regulation of an Exchange to do so, he may, on the recommendation of the Board, make a stay order in relation to all or any of the following: (a) the function of a bursa or its committees;
(b) the function of any Subcommittee established by the Committee referred to in paragraph (a); or (c) the principal officer function, no matter by whatever name called, which is responsible for the conduct of business and operations of an Exchange or any Committee, as the case may be.

(2) as long as the stay order is to take effect, the following provisions shall apply: (a) none of the functions with it the order was in touch can be implemented by bursa or Committee or any Subcommittee established by the Committee or by any officer of the bursa or Committee or any subcommittee thereof;

(b) any function to which paragraph (a) applies may be effected by any person which shall be specified in such order in respect of such functions; and (c) a person or body referred to in paragraph (a) may not, by Act or omission, either directly or indirectly, affect the way the functions referred to in the order performed 180 laws of Malaysia ACT 704 unless the person referred to in paragraph (b) request the assistance of a person or body that.

(3) subject to subsection (6), an order of suspension shall remain in force for such period, being a period not exceeding six months, as may be specified in the order.

(4) an order suspension or any pelanjutannya under subsection (6) shall take effect when a copy of the order or notice of extension is served under paragraph (7) (a) to the Exchange, the Committee or Subcommittee established by the Committee with it the order was in touch.

(5) without prejudice to subsection (4), if the suspension order is made or the order is extended under subsection (6), the Board shall, as soon as practicable, submit a copy of the order or, as the case may be, notice of pelanjutannya, to the principal officer of the Exchange, the Committee or Subcommittee established by the Committee as the Board considers appropriate in the circumstances.

(6) the Minister may, on the recommendation of the Board, extend the period in which a stay order remain in force for any further period to which each shall not exceed three months.

(7) where a suspension order is made or extended under this section, the Board shall — (a) forthwith serve a copy of the order or notice of the extension to the Exchange, the Committee or Subcommittee on which such order is in relation to; and Labuan Securities and financial services 181 (b) cause to stay order or notice of the extension, as the case may be, to be published in the Gazette.

(8) any person who contravenes a stay order issued under subsection (1) commits an

offence and shall, on conviction, to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or both.

(9) for the purposes of this section, "principal officer" includes any person, no matter by whatever name called, either he himself or in association with another person or with more than one another, responsible for matters relating to the listing requirements, licensing, securities or transactions in the Exchange or in the Committee.


Power Board 145. (1) for the purposes of this Act and the conduct of any business should exchange established under section 134 and in addition to any other powers conferred upon it under this Act, the Board may — (a) may at any time investigate or examine any transaction involving the purchase or sale of securities made by any person either directly or indirectly to make sure if that person was using way or dishonest trading practices , unfair or unethical either that way or the trade practices become an offence under this Act or any other written law or breaches any of the rules or otherwise;

182 the laws of Malaysia ACT 704 (b) require any person to produce detailed information about any transaction involving the purchase or sale of securities;

(c) require the production of, inspect and make copies or prints or take extracts from any document, record or thing relating to — (i) the business or Affairs of a bursa;
(ii) any securities transactions;
(iii) any advice, reports or analyses in respect of securities; or (iv) an account or record of any person involved on such properties to the matter referred to in subparagraph (i), (ii) or (iii) and any audit or audit reports in respect of, the same thing; or (d) when the Board of mendapatinya necessary, check with the examination places, business affairs or any other market participants, which shall include a listing sponsor and trading agents, for the purpose of — (i) assessing whether market participants the activities dibenarkannya according to this Act, any regulations made under this Act and any other law applicable to another;

(ii) confirm that the provisions of The money laundering, terrorism financing and revenue from illegal activities 2001 followed; and Labuan Securities and financial services 183 (iii) carry out the functions of the Board;
(e) by the authority of a search warrant issued by the Court for that purpose and with or without the help of any person required by the Board unless the Board has reasonable cause to believe that, by reason of the delay in obtaining the search warrant, the purpose of the entry is likely to be terkecewa, and in such a situation without a warrant — (i) break enter and search any premises , place or thing in or in it that the Board has reason to suspect that there may be any document, record or thing to its production required by virtue of this section but not submitted in compliance with the requirements; or (ii) take possession of or protect against harassment of any document, record or thing to its production are required.

(2) the Board may in writing authorize any other person to assist it in discharging its functions under this Act.

(3) a person who — (a) fails to comply with requirements made under subsection (1);

(b) purports to comply with the requirements made under subsection (1), provide any information or make any statement that is false or misleading in a material particulars; or 184 laws of Malaysia ACT 704 (c) prevent or menggalang the Board or other person in the exercise of any powers under subsection (1), commits an offence and shall, on conviction, to a fine not exceeding ten million ringgit or to imprisonment for a term not exceeding five years or both.

(4) the powers conferred under this section is in addition to, and does not cut, any other powers provided by law.


CHAPTER 3 FALSE or MISLEADING MARKET and TRANSACTIONS a PERSON in the creation of false or misleading market 146. Those who create or do anything with the intention of creating a State of active trading in any security that is false or misleading or false or misleading with respect to the market, or prices, any such securities commits an offence and shall, on conviction, to a fine not exceeding three million dollars.


Transactions of people in 147. Subject to a defence available under this part, any person who has information as people in and — (a) he or she transacts securities securities price is affected in respect of that information;

Financial services and Labuan Securities 185 (b) he encourage someone else to Transact securities, whether other people that know or not is a securities price affected in respect of that information; or (c) he reveals that in addition to the information in the implementation of the appropriate functions of the job, his profession, position or to another person, commits an offence and shall, on conviction, to a fine not exceeding five million dollars.


Defense 148. (1) an individual is not guilty because a person in transactions dealing securities or encouraging someone else to do so if he shows — (a) that he did not foresee at the time of the transaction will result in a profit that can be linked to the fact that relevant information was price sensitive information in relation to the securities;

(b) that at the time he or she believes on reasonable grounds that the information was disclosed by such widely until dipasti that no-one who took part in the securities transactions will be affected because they do not have that information;

(c) that he would do what he did even if he did not have that information.

(2) an individual is not guilty of the offence of insider transactions based on disclosure of information if he shows —


186 laws of Malaysia ACT 704 (a) that he did not at that time in anticipation of any people, caused by the disclosure, will Transact securities; or (b) that, although she had such expectations at the time, he did not expect the transaction will produce profits that can be linked to the fact that that information was price sensitive information in relation to the securities.

(3) for the avoidance of doubt, any reference to profits in the Division include avoidance of loss.


Quoted securities 149. For the purposes of this Chapter, a person transacts securities if — (a) he acquire or dispose of securities, whether as principal or agent; or (b) he acquires, directly or indirectly, an acquisition or disposal of securities traded through another person.


Get the acquisition or disposal of securities 150. (1) a person gets acquisition or disposal of securities if the securities acquired or disposed of by a person who is, in respect of the acquisition or disposal of that — (a) agents;
(b) her nominee; or (c) any person acting on the instructions.
Financial services and Labuan Securities 187 (2) subsection (1) is not limited as to the circumstances in which a person can be considered to get an acquisition or disposal of securities by someone else.

(3) "Acquisition" or "disposal" in respect of securities including agrees to acquire or dispose of securities or make or terminate a contract giving rise to the securities, as the case may be.


Internal information 151. "Internal information" means information that — (a) in connection with certain securities or with certain securities or issuers with issuers of certain securities and which are not relating to securities in general or with the issuers of securities in General;

(b) specific or accurate;
(c) has not been published to the public; and (d) price sensitive.

"The affected Securities price" and "sensitive information" price of 152. Securities securities are "affected price" in connection with internal information, and internal information is "price sensitive" in respect of securities, if and only if the information will, if aired to the public, is likely to have a significant effect on the price or value of the securities.




188 the laws of Malaysia ACT 704 Information as people in 153. An individual has information as people in if and only if — (a) the information is, and he knows that information is, internal information; and (b) he has the information, and find out that he has information that, from internal resources, which — (i) as a Director, employee or shareholder of the issuer of securities;

(ii) because having access to that information through employment, Office or his profession; or (iii) as the source of its information, directly or indirectly, to a person who has information that according to one of the ways specified in subparagraph (i) or (ii).


The definition of "broadcast to the public" 154. (1) "Broadcast to the public" shall be construed in accordance with subsection (2) and (3), but the provision is not restricted as to the meaning of the expression.

(2) information published to the public if — (a) the information published in accordance with the rules of the exchanges for the purpose of informing investors and their professional advisers;

Labuan Securities and financial services 189 (b) the information contained in the records in accordance with the law shall be open to public inspection;

(c) that information can be obtained easily by any person is likely to transact any security, or with any issuer of securities, which it is in contact; or (d) that information be obtained from the information that has been published to the public.

(3) information can be considered to have been published to the public even if — (a) that information may be obtained only by people who use due diligence or expertise;

(b) the information is relayed to a part of the public, not to all members of the public generally;

(c) the information may be obtained only through observation;
(d) the information communicated only with payment of fees; or (e) information that aired just outside Labuan.


Exclusion of 155. (1) for the avoidance of doubt, the insider transactions cannot be performed in the following circumstances: (a) an acquisition or disposal of securities or the delivery of information carried out under any other written law in relation to 190 laws of Malaysia ACT 704 scheme arrangements, remodeling and acquisition relating to the Corporation;

(b) a Centre for clarification which acquire or dispose of securities for the purpose of settlement of a contract market or in connection with any proceedings or other action in relation to the settlement of the contract market if the acquisition or disposal of securities is carried out according to the rules of the clearing centre;

(c) a stock exchange in relation to a sale or purchase of securities of the Stock Exchange Act on instructions from a clearing centre;

(d) redemption of units of a collective investment scheme by the trustees or managers under a trust deed relating to collective investment schemes in accordance with the Covenants contained buy-back or be deemed to be contained in the trust deed at the price required by the trust deed is calculated so that, as far as can be implemented reliably, by reference to the value of the asset less — (i) any liability for collective investment schemes that the unit was in touch with him; and (ii) any reasonable charges for the purchase of the shares;
(e) apply for purchase, or buy, securities under an agreement or underwriting agreement subpengunderaitan and includes making such agreement or sell applied for purchase, or purchased, under such agreement;

(f) the sale or purchase of securities pursuant to the requirements imposed by the Government, statutory bodies or any regulatory authority, or any Securities and Labuan financial services needs 191 imposed under any written law or court order; and (g) the presentation of information in accordance with the requirements imposed by the Government, government agency or any

which regulatory body or any requirement imposed under any written law or court order.

Part X SELF-REGULATORY ORGANIZATION Declaration or recognition of self-regulatory organization 156. (1) "self-regulatory Organization" means a self-regulatory organization's aim is to regulate the operations of its members or users of its services, standards of practice and conduct its business in order to protect investors and consumers securities or services related to and including any other organization that declared or recognized as such by the Board;

(2) the Board may, subject to such terms and conditions as it thinks fit, by notification in the Gazette, declare or well-deserved recognition that a corporation or organization shall be a self-regulatory organization in relation to a specific industry or sector, or any part thereof, if the Board is satisfied that the Corporation or organization that — (a) has a Constitution and rules and internal policies in accordance with this Act and any other law applicable to the industry or sector , or any part thereof;

192 the laws of Malaysia ACT 704 (b) has the capacity and financial and administrative resources necessary or proper for the exercise of its functions and the function of regulation or supervision to be potential as a self-regulatory organization, including managing a violation of law or violation of the standards and guidelines applicable;

(c) make no distinction in unreasonable someone in offering access to its services or in the exercise of its functions as a self-regulatory organization;

(d) managed or controlled by the officer or the person who controls that are persons who are fit and proper person under this Act; and (e) meet the criteria defined in the rules prescribed by the Board.

(3) the Board may, by a written arrangement, delegate the power or function of the Board to a self-regulatory organization.

(4) an arrangement under subsection (3), shall provide for — (a) any of the powers or functions delegated to regulatory organization directly by the Board under subsection (3);
(b) the terms and conditions with which the authority or such functions have been delegated and may be exercised by self-regulatory organizations;

(c) persons authorized to exercise the powers or functions delegated to the self-regulatory organization; and Labuan Securities and financial services 193 (d) submission of periodic reports to the Board in respect of the exercise of the powers or functions delegated by the self-regulatory organization.


Rules of self-regulatory organization 157. (1) a self-regulatory organization may make rules, in accordance with this Act, any regulations made under this Act or guidelines issued by the Board or any other law applicable, in respect of matters for which the self-regulatory organization has the function of regulation or supervision, including the functions delegated to it by the Board.

(2) rules made by a self-regulatory organization under subsection (1), and the amendment thereto, shall not have effect unless approved by the Board.

(3) the Board shall be calculated has given approval for the purposes of subsection (1) if the Board does not protest against the rules or amendments thereto within one month after the rules or amendment is submitted to the Board for approval.

(4) the rules of a self-regulatory organization can make provisions regarding shareholding and voting rights in the self-regulatory organization in the interest of members of self-regulatory organizations, consumers, investors and users of their services.


Restrictions on 158 decision making. A self-regulatory organization shall not make a decision under the harmful kaedah-kaedahnya unless someone's rights — 194 laws of Malaysia ACT 704 (a) the self-regulatory organization has given the person an opportunity to make representations on the matter; or (b) the self-regulatory organization of the opinion, on reasonable excuse, that any delay in making the decision will affect the harm a user class, investors or members of the industry or sector, as applicable.


The obligations of officers and obligations relating to the self-regulatory organization officer 159. A self-regulatory organization shall notify the Board, in the manner determined by the Board, as soon as that can be put in place before or after a person appointed as an officer of the self-regulatory organization.


The power to give directions to the self-regulatory organization's 160. (1) the Board may, after giving reasonable opportunities to a self-regulatory organization to make representations on the matter, giving an instruction to the self-regulatory organizations — (a) suspend, for a period specified in the directive, a provision within the Constitution or kaedah-kaedahnya;

(b) require that, subject to the companies act of Labuan 1990 or any other laws, amended its Constitution as specified in the instructions that make it comply with this Act, any regulations made under this Act or any rules made by the Board;
Financial services and Labuan Securities 195 (c) require the amendment of kaedah-kaedahnya as specified in the instructions that make it comply with the Act in question; or (d) for the implementation or enforcement of its Constitution or kaedah-kaedahnya.

(2) where the Board has reasonable grounds to believe that — (a) an officer of a self-regulatory organization is not a fit and proper person under this Act;
or (b) the appointment of a particular person or continuation of his position as an officer of a self-regulatory organization is likely to harm the self-regulatory organization or affect the harm the interests of investors and users of financial services or the interests of the members of the sector or industry concerned, the Board may, after giving reasonable opportunity to

officers and the self-regulatory organizations to make representations, direct the self-regulatory organization not to appoint such officers, or menyingkirkannya from his post.

(3) subsection (1) and (2) does not limit the directions that may be given by the Board to a self-regulatory organization.


Termination of arrangements and cancellation declaration or recognition of 161. (1) the Board may revoke a declaration or recognition if — 196 laws of Malaysia ACT 704 (a) self-regulatory organization that does not start operation within three months after an arrangement under this section has been made;

(b) the Board is not satisfied that the self-regulatory organizations that perform properly or unable to perform functions or powers delegated to him, or other functions and powers;

(c) the Board is satisfied that the self-regulatory organization has committed a material violation of an arrangement or the relevant Act or other laws applicable;

(d) it appears to the Board that the self-regulatory organizations involved in a financial crime; or (e) self-regulatory organization that does not comply with the instructions of the Board.

(2) the Board may not cancel a declaration or recognition unless the Board has informed the self-regulatory organization about his intention and the reasons for the Board's actions, and has given a reasonable opportunity to the self-regulatory organization to make representations to the Board.

(3) the Board shall cause a notice of cancellation under subsection (1) has been published in the Gazette.


Amendments to the Constitution of the self-regulatory organization's 162. Notwithstanding section 24 of the Act the company's Labuan 1990, an amendment to the constituent documents of a self-regulatory organization shall not be effective unless the amendment is approved by the Board.

Labuan Securities and financial services 197 cover for self-regulatory organizations 163. A self-regulatory organization, officer or employee of self-regulatory organization or member of a self-regulatory organization Committee is not liable for any losses incurred by or loss caused to any person as a result of anything done or omitted by them in the implementation, in good faith, their functions and duties related to regulatory or supervisory functions of self-regulatory organizations such , including the functions delegated to it by the Board.


The financial statements of the self-regulatory organization's 164. (1) within six months from the end of each financial year, the self-regulatory organization shall file with the Board a copy, certified by the Secretary as a true copy of the financial statements, the self-regulatory organization that for that year prepared and audited in accordance with part VI of the companies Act 1990 Labuan.

(2) the financial statements shall be audited by an auditor.

(3) If, in the course of its audit, the Auditors of a self-regulatory organization has reason to believe that — (a) there had been a material adverse change in the business risks of a self-regulatory organization that could potentially affect the ability of the self-regulatory organization as an ongoing effort;

(b) the self-regulatory organization may be berlanggaran with this Act, any regulations made under this Act, any guidelines 198 laws of Malaysia ACT 704 issued by the Board or any instructions issued by the Board;

(c) a financial crime has been, is being or may be carried out; or (d) serious ketidakteraturan has occurred, he shall immediately report the matter in writing to the Board.

(4) any report made under subsection (3) it shall not be a breach of the duty of the Auditors.


Powers of the Board in respect of self-regulatory organizations 165. For the purposes of this Chapter, the authority granted to the Board under section 160 shall apply also in respect of any corporation or organization Labuan declared or recognized by the Board as a self-regulatory organization under section 156.

PART XI VARIOUS term APPEAL appeal of 166. (1) any person aggrieved by the decision of the Board to reject an application for a license or registration or to cancel a licence or registration under this Act, may within thirty days of the decision being communicated to him, appeal to the Board in writing.
Financial services and Labuan Securities 199 (2) the Board shall, after considering an appeal under subsection (1), make the final decision and shall notify the applicant in writing of its decision.

(3) an applicant who is aggrieved by the decision of the Board under subsection (2) may, within thirty days of the decision being communicated to him, appeal to the Minister in writing that can verify, change or mengakas the decision, and the decision of the Minister shall be final.

(4) for the avoidance of doubt, the carriage of an appeal under subsection (1) and (3), does not suspend the decision appealed against.


2 TERM of CANCELLATION and Cancellation agreement, the SURRENDER of the licence or registration of 167. (1) the Board may revoke any approval, licence or registration under this Act — (a) upon request of a licensed entity;
(b) if — (i) the licensed entity stopped doing business in or from within Labuan;

(ii) the licensed entity has violated any provision of this Act or any of the terms, conditions, restrictions or limitations relating to the licence or registration, as the case may be;

200 laws of Malaysia ACT 704 (iii) the Board has, whether related to an application for a licence or registration, or at any time after the grant of a license or registration that, given the information, document or declaration that is false or misleading by or on behalf of licensed entities;

(iv) a licensed entity that has been convicted of an offence under this Act or a criminal offence in any country or jurisdiction is recognised;

(v) the licensed entities with disedarinya and willfully provides information that is false, misleading or inaccurate or not

disclose the information required under this Act;

(vi) the licensed entity doing business in such manner as the Board reasonably believes would be prejudicial to the interests of, in the case of an entity licensed under part III, investors mutual funds, or the public interest;

(vii) the licensed entity declared bankrupt or has been wound-up or otherwise dissolved;

(viii) a resolution for voluntary winding up of the licensed entity is approved;

(ix) in connection with licensee bank or insurance licensees, if any warranty or undertaking referred to in section 88 and 89 or section 103 and 104 were not fulfilled; or (x) the Board in its absolute discretion thought it fit for any other reason.
Labuan financial services and Securities cancellation Procedure 201.168 (1) prior to revoke any approval, licence or registration under section 167, the Board shall — (a) give written notice to the licensed entities about the reasons which the Board intends to do so;

(b) provide the licensed entities an opportunity to make representations in writing to the Board within thirty days after receipt of the notice; and (c) considering the representations of it.

(2) if the Board revoke any licence or registration under section 167, the Board shall give written notice to the licensed entities about the revocation and cancellation shall become effective on the date specified in the notice.

(3) if the revocation is about a licence bank or insurance licence, the Board shall, as soon as practicable, publish in a newspaper widely distributed in Malaysia and one international financial newspaper a notice of revocation of the license of the bank or insurance license, as the case may be, under this section, but any delay in posting the notice or failure to post the notice shall not in any way affect the validity of the revocation.

(4) If the revocation is about the registration of a Labuan trust company, in addition to subsection (1) and (2) — (a) the request for cancellation, the Labuan trust companies must satisfy the Board that it has made adequate provision in respect of 202 laws of Malaysia ACT 704 all its liability and shall also specify the date such revocation shall take effect; and (b) of the Labuan trust companies shall, not later than twenty-one days before the date fixed under paragraph (4) (a), publish a advertisement on the cancellation of its registration suggested in at least one newspaper of Malaysia circulated widely and one international financial newspaper.


Surrendering a license or registration 169. (1) any entity licensed under this Act shall be handed back the licence or registration with the Board's approval in advance.

(2) the licensed Entity shall give fourteen days notice to the Board about the surrender.

(3) the Board may give its approval if the Board is satisfied that the licensed entities that have made adequate provision in respect of all liabilities, and thereafter shall specify a date to surrender to that effect.

(4) where the Board's approval has been obtained under subsection (3), a licensed entity shall, not later than twenty-one days before the date fixed under subsection (3), publish a ads about a proposed surrender in at least one newspaper of Malaysia circulated widely and one international financial newspaper.

(5) the Board shall, as soon as practicable, publish in a Malaysian newspaper that circulated widely and one international financial newspaper a notice about every surrender under this section but any financial services and Labuan Securities 203 delay in posting the notice or failure to post the notice shall not in any way affect the validity of the surrender.


As a result of cancellation or surrender of licences 170. (1) if the revocation of a licence or registration under section 167 or surrender of the licence or registration under section 169 has been in force, the licensed entities shall, from the effective date of cancellation or surrender it, cease to undertake any further business.

(2) Notwithstanding subsection (1), if a licensed entity continued to exist as a corporation after the cancellation of his/her license has effect, the Minister may, on the recommendation of the Board, authorize in writing the licensed entity to continue to carry out its business activities at any point and for any period of time as determined by the Minister in the truth for the purpose of winding up its affairs or for the purpose of explaining the policy owner claims , clients or other creditors.

(3) every licensed entities whose licences have been revoked or extradited shall continue to be subject to the provisions of this Act so long as the outstanding liability made provision or not otherwise about it.
CHAPTER 3 GENERAL payment system 171. (1) No person shall — (a) start to handle any payment system in, from or through Labuan; or 204 laws of Malaysia ACT 704 (b) if that person has to handle any payment system in, from or through Labuan immediately before commencement of this Act, continue to operate the system, unless he has submitted for the Board's approval of the scheme of operation of payment systems and methods, contract, by-laws or other documents relating to such rights, obligations and liabilities of the person participating in the payment system and get approval from the Board to handle the payment system.

(2) before making any decision under subsection (1), the Board may require a person who wishes the truth is to submit to the Board any information and other details relating to the payment system or by the person who wishes the truth, or with a person who is or who will participate in the payments system, as determined by the Board, and can also make any examination of the premises , equipment, machines, books or documents, accounts and other transactions relating to the

payment systems such as may be found desirable by the Board.

(3) the Board may approve or reject a scheme submitted under subsection (1) and the rules, contracts, by-laws or other documents relating to the scheme and submitted together with the scheme or can be approves subject to such modifications and alterations to the scheme, or to any or all of the documents submitted together with it, as it may deem necessary, desirable or expedient , and can be when assigning any permission under this section, impose any restrictions, limitations, or conditions that may absolutely deem fit.

(4) Notwithstanding anything contained in any permission given, or in any scheme or an approved document, under subsection (3), any Securities and Labuan financial services 205 person under that subsection shall comply with any regulations made under this Act in relation to the payment system, and if there is any conflict or inconsistency between the terms of such permission or anything in the scheme or in any document with such regulations , the provisions of the rules shall prevail and shall have effect and the full effects.

(5) when an authorization under subsection (3) is in effect, the Board may, from time to time, inspect the premises, equipment, machines, books or documents, account or other transaction in relation to the payment system.

(6) the Board may, at any time, after giving the person authorized under subsection (3) a reasonable opportunity to make representations, revoke or suspend or amend anything contained in, any authorization given under that subsection.

(7) the making of any cancellation under subsection (6), the Board may include requirements of a contiguous, related or incidental to be complied with by the person the truth to be revoked or by any person who participated in the system, and the making of any suspension under that subsection, the Board may impose such terms, conditions and requirements as it considers necessary or expedient.

(8) any person who the truth is cancelled or suspended under subsection (6) shall immediately stop handling the payment system in respect of which such permission has been revoked or suspended.

(9) No licensed entities may be given approval for Labuan to handle any payment system under this section.



206 laws of Malaysia ACT 704 172 business Transfer. (1) for the purposes of this section, any reference to "pemindah" is a reference to an entity licensed under part V (Chapter 1, 2 and 3 only), part VI and part VII, that moves its business that requires it to be licensed under this Act and "transfer recipients" is a reference to licensed entities licensed to conduct the business, who received transfers from pemindah.

(2) all or any part of the business pemindah can be transferred to the recipient transfer if the transfer effected by the scheme under this section.

(3) a scheme under this section cannot provide about business pemindah to be transferred to the person who has not yet registered to conduct business under this Act or who has not exist except when expressly provided for in the scheme that such schemes shall only have effect when the person was licensed.

(4) a scheme under this section may include provisions on matters incidental to the transfer of the implemented and the provisions for the execution of the transfer, and in particular may include provisions regarding — (a) any property, rights or liabilities of the transfer including asset that contains insurance funds (in the case of the transfer of insurance business), to park right, according to the scheme and without further assurance, recipients of transfer;

(b) in the case of the transfer of insurance business, the registration policy has been transferred by the recipient of a transfer, for the amount to be included in respect of the policy into the recipient's insurance funds and transfers, for financial services and Labuan Securities 207 any other matters arising under this Act of the transfer;

(c) continuation of any legal proceedings pending by or against the recipient transfers or against pemindah;

(d) the dissolution without liquidation, pemindah; or (e) any matter incidental, consequential or additions necessary to guarantee that the scheme can be carried out completely and effectively.

(5) a scheme under this section shall not have effect unless it is approved in advance by the Board and subsequently confirmed by the Court.

(6) the following provisions shall apply in respect of every scheme: (a) the pemindah shall submit to the Board a copy of the report, together with a copy of the report, if any, the terms of such schemes;

(b) each party to the scheme shall, not later than one month after the copy of the scheme submitted to the Board, cause to be published in not less than two newspapers which are approved by the Board a notice, containing such particulars as may be determined, on the intention to make any application to the Court for confirmation of such schemes; and (c) each party to the scheme shall, for a period of fifteen days after the publication of the notice referred to in paragraph (b), keep a copy of the scheme in its Office in Labuan and copy of the 208 laws of Malaysia ACT 704 open for inspection by all members and policy owner affected by the scheme.

(7) in addition to subsection (6), concerning the scheme for the transfer of insurance business, the following provisions shall apply: (a) the actuarial report, if any, shall be submitted together with a copy of such schemes;

(b) pemindah shall submit to the Board a report to show the opinion of the actuary of the effects that are most likely from the scheme to the policy owner the parties to the scheme in respect of any transfer of life insurance business;

(c) each party to the scheme shall submit a copy of the report referred to in paragraph (b)

to any person who requests a copy of it at any time before the Court verifies such schemes;
and (d) the Board may cause a report to be made by the scheme actuary that is independent of the parties to the scheme and, if you do so, the Board shall cause a copy of the report sent to each of the parties.

(8) a copy of any scheme and any report referred to in subsection (6) and (7), or abstract thereof that are approved by the Board, shall, except in so far as the Court, on application made on behalf of that, otherwise directs, be sent by each party to the scheme to every owner whose policies affected by such schemes.

(9) a party to the scheme shall be liable in association or to reimburse the financial services Board and Labuan Securities 209 any costs or expenses incurred by the Board under this section in relation to the scheme; and the scheme shall include provisions on the liability to be borne between the parties.

Provided that if the Court had made any order concerning costs, the costs shall be paid back to the Board shall not exceed the amount specified in the order.

(10) the Board may approve or reject the scheme.

(11) after a scheme approved by the Board under subsection (10), an application can be made in association to the Court through the originating summons ex-parte application by the parties to the scheme for any order of the Court to verify the approved schemes and to facilitate or enable the scheme is implemented.

(12) an application to the Court in respect of any matter relating to such schemes may, at any time before confirmation of the scheme by the Court, made by the Board or by any person who in the opinion of the Court is likely to be affected by the scheme.

(13) the Court may confirm a scheme with or without modifications or may refuse to confirm such schemes.

(14) the scheme is not verified by the Court under subsection (13) shall become effective in accordance with its meaning notwithstanding anything contained in the previous section and shall be binding on any person affected thereby.

(15) when the scheme is verified, each party to such schemes shall, unless it is companies that are not incorporated filed a copy of the scheme with the Board and with 210 laws of Malaysia ACT 704 regulatory authorities in the country of its establishment or the country of origin.

(16) the recipient of a transfer shall, within one month after the scheme is to take effect, submit to the Board: (a) a statement of assets and liabilities of each party to the scheme, at the time immediately before the transfer, signed on behalf of the parties;

(b) a copy of the scheme approved by the Court and sealed copy of the court order confirming such schemes; and (c) a declaration made by the Chairman of the Board of Directors of the recipient of the transfer, or by their principal officer in Labuan, which States complete every payment made or to be made to any person by reason of the transfer, and that, to the extent he, there are no any payment beyond the specified has, or will be, made by reason of the transfer or with known by the parties to the scheme.

(17) Pemindah shall submit, within thirty days from the order of the Court made under subsection (11), a copy of the order certified together with a copy of the endorsed the scheme as approved by the Board under subsection (10), with the relevant authorities should, if any, related to the registration or recording of transactions of any movable property or interest of movable property transferred in accordance with the order.

(18) If an order of the Court under subsection (11) vesting any alienated lands, or any share or interest of any land alienated at the recipient transfers — financial services and Labuan Securities 211 (a) the Court shall, if the alienated land in Peninsular Malaysia, pursuant to subsection 420 (2) national land code [Act 56 of 1965], cause a copy of such order is submitted to the Registrar of titles or land administrator , as the case may be, upon the making of the order so that the Registrar of titles or land administrator, as the case may be, to implement the provisions of subsection 420 (2), (3) and (4);

(b) if the alienated land in Sabah, the recipient of the pemindahaan shall, as soon as practicable after the order is made, issue a copy of the order certified to the Registrar for the registration of land alienated the vesting date or part or interest on land alienated to the recipient of the transfer as provided under the Sabah Land Ordinance [Sabah Cap. 68]; or (c) if the alienated land in Sarawak, the recipient of the transfer shall, as soon as practicable after the order is made, issue a copy of the order certified to the Registrar for the registration of land alienated or vesting provisions of part or interest about the alienated lands, to the recipient of the transfer, as provided under the Sarawak land code [Sarawak Cap. 81].

(19) an order of the Court under subsection (11) may be related to any property or business pemindah outside Malaysia and, if it is related to such effect may be granted either by any reciprocal arrangement in respect of the enforcement of judgments that might exist between Malaysia and the country, territory or place outside Malaysia where the property or business that are, or if there is no such arrangement , under the laws applicable in the country, territory or place it.
212 laws of Malaysia ACT 704 (20) in this section, "the parties to the scheme" means the transfer, pemindah and recipients and "parties to a scheme" shall be construed accordingly.


Internal audit 173. (1) every licensee and licensee of insurance shall conduct internal audit on the book and its operations as determined by the Board from time to time and shall submit to the Board a report on the internal audit shall include a report of the system of accounting and control of the licensee.


(2) the internal auditor appointed by the licensee of the bank or insurance licensees to conduct internal audits on the book and its operation under subsection (1) shall for the purposes of this section be deemed to be an official licensee of the bank or insurance licensees respectively and shall, at all times, subject to section 178.

(3) Internal Audit can be carried out by any person except the external auditor of bank licensee or licensees insurance, as the case may be, under section 174.

(4) an internal auditor shall be promptly reported to the Board if, in the course of his duties as internal auditor of bank licensee or licensees insurance, he is satisfied that — (a) has occurred a violation of provisions of this Act or that an offence under any written law was committed by the licensee or licensees of such insurance or by any officer or employees; or financial services and Labuan Securities 213 (b) any ketidakteraturan that affect the interests of the creditors the licensee or licensees insurance it, or, in the case of insurance licensees, the interests of the owner of the policy, or any other serious, ketidakteraturan has occurred.

(5) any person who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or both.


The external auditors 174. (1) every licensed entities shall appoint the external auditors each year before any date or within such period as may be determined by the Board.

(2) the Board may maintain a list of Auditors for the purposes of this section.

(3) the auditor appointed under subsection (1) shall carry out the audit of the accounts of the licensed entity in respect of its business operations and shall submit a report on the audit together with the review of the system of accounting and control of the licensed entity to the participants of the licensed entities and to the Board.

(4) the Board may, at any time, require that the auditor appointed under this section to submit to the Board any clarification in connection with its audit, as determined by the Board.

(5) an auditor shall be promptly reported to the Board if, in the course of his duties as auditor for the licensed entity, he is satisfied that — 214 laws of Malaysia ACT 704 (a) a breach has occurred, the provisions of any part of this Act or that an offence under any written law has been done by the licensed entity or any of its employees; or (b) any ketidakteraturan that affect the interests of the policy owner, in the case of an entity licensed under part V, or the licensed entities, creditor or any other ketidakteraturan, has occurred.

(6) any person who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or both.


Accounts and records of 175. (1) an entity licensed under this Act shall cause to be kept the accounting and other records that should have been that can explain the transactions and the financial position of the entity licensed adequately.

(2) every licensed entities and its Director shall cause the appropriate entries to be made in the accounting and other records of the licensed entities within sixty days after the completion of the transactions related to it.

(3) Become compulsory for accounting and other licensed entities kept at the registered office of the licensed entity or in any place in Labuan think fit the licensed entity Director and the accounting and other records and shall be at all times open to inspection by any Director and shall be kept in such a way as to enable the records easily and should be audited.

(4) the Board may, in any particular case, direct that the accounting and other records of a licensed financial services entities and Labuan Securities 215 opened to inspection of Auditors acting on behalf of a Director, but only on an undertaking in writing that the information obtained by the auditors during its inspection shall not be disclosed to him except to the Director.

(5) any Director of a licensed entities do not take all reasonable steps to ensure compliance with the requirements of this section by the licensed entities, or a Director who with sengajanya action has resulted in default by the licensed entities under this section commits an offence.

(6) for the purposes of this section, "the accounting and other records" shall include, if applicable, the following: (a) all sums of money received and expended by licensed entities and the matters in respect of which such receipts and expenditure were made;

(b) all sales and purchases of goods by the licensed entities;
(c) the assets and liabilities of the licensed entity; and (d) all the relevant books and records as may be determined by the Board.

(7) Notwithstanding subsection (3), the Board may in writing allow entity licensed to keep accounting records and other records outside Labuan provided that licensed entities shall also maintain accounts and records of its financial position with reasonably accurate accounts and records is updated once in every six months in Labuan.



216 laws of Malaysia ACT 704 Money or other property from illegal activities law 176. (1) any licensed entity or any person who carries on any activity under this Act cannot accept — (a) any money or other property arising from a transaction, operations or other activities that constitute a criminal offence under the laws of Malaysia or, if carried out in Malaysia, would be an offence; or (b) any money or other property which the receipt, ownership or controls is or will become an offence as is mentioned in paragraph (1) (a).

(2) if any person, who is a Director, officer or agent of any of the licensed entity or person referred to in subsection (1) —


(a) has reason to believe that a licensed entity or person referred to in subsection (1) has property or income that accrued to it or obtained by it and arising from a transaction, operations or other activities that constitute a criminal offence under the laws of Malaysia or, if carried out in Malaysia, would be an offence; or (b) has received or has in his possession or control of money or other property which the receipt, ownership or controls is or will become an offence as is mentioned in paragraph (2) (a), financial services and Labuan Securities 217 be the duty of such person to immediately to bring the matter to the attention of the Board.

(3) any person who without reasonable excuse fails to comply with the requirements of subsection (1) or (2) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.

(4) all the money or property described in subsection (1) and (2) shall be forfeited to the Government and become his property as a whole.


Inspection and review of the books and documents of the licensed entity 177. (1) the Board may from time to time — (a) inspect and examine books or other documents, accounts and other transactions of any licensed entity; or (b) obtain from any licensed entities, require any entity licensed to grant access to, or require any entity licensed to provide, any information or a copy of any record, book or other document relating to the business of the licensed entity carried out under this Act which, in the opinion of the Board, it is necessary to enable it to determine compliance with the provisions of this Act.

(2) the Board may approve the supervisory authority of the country of origin of the licensed entity to carry out the activities referred to in paragraph (1) (a) and (b).

(3) every Director or officer of the licensed entity shall provide cooperation and bantuannya to the Board for 218 laws of Malaysia ACT 704 facilitate any inspection and review carried out under paragraph (1) (a).


Confidentiality of 178. (1) No person who for any reason have access to any records, books, registers, correspondence or other document, material or information relating to the affairs or account the following person may disclose to any person, or make a record for any person of any records, books, registers, correspondence or other documents, materials or information: (a) mutual funds under part III;
(b) any customer a Labuan trust companies trust companies or private Labuan under part V;

(c) any licensee customers bank under part VI;

(d) any policy owner under part VII;
(e) Exchange established under Part IX;
(f) the self-regulatory organization established under part X; and (g) any entity licensed under this Act.
(2) subsection (1) shall not apply to — (a) any disclosure required by valid under section 28B Labuan financial services Board Act 1996 or under section 22 Labuan business activity Tax Act 1990 [Act 445];

Labuan Securities and financial services 219 (b) any disclosure required under a court order made ex parte application, provided that the person disclose relevant information shall notify the person affected by the order and having received the notification, the affected person may file the necessary application to the Court to dispute the order or otherwise comply with such order accordingly;

(c) information relating to mutual funds under part III, with the agreement of the first mutual funds and investors concerned;

(d) information relating to the trust company customers or private trust companies in Labuan Labuan under part V, with the written consent of the customer or the customer in advance;

(e) information relating to clients licensees bank under part VI, with the written consent of the client or his/her earlier;

(f) information relating to the policy owner under part VII, with the written consent of the owner of the policy or his/her advance or in the course of placing of reinsurance business;

(g) information relating to the licensed entity, with the written consent of the licensed entities first.

(3) No person shall have any records, books, registers, correspondence or other documents, materials or information that was disclosed at his knowledge of berlanggaran with subsection (1) may be in any manner whatsoever disclose records, books, registers, correspondence or other documents, materials or information to any other person.
220 laws of Malaysia ACT 704 (4) all proceedings, except in criminal proceedings, in relation to a violation of this section shall be instituted in any court under the provisions of this Act and any appeal therefrom shall, unless otherwise ordered by the Court, be heard privately and no details of the proceedings for publication by any person without the consent of the Court.

(5) subject to subsection (6), nothing in this section may limit any powers granted to the Court or a judge by Bankers Book Act (Description) 1949 [Act 33] or prohibit compliance order made under the Act.

(6) section 7 of the Act Bankers Book (Evidence) 1949 does not apply for a bank licence holder under part VI, the Director or the offer.

(7) any person who contravenes subsection (1) commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Translation of 179. If any instrument or document required to be lodged with the Board are in languages other than the national language or English, instrument or document shall be accompanied by a translation that has been verified or certified either in the national language or English.


Application of Act 1996 180 Labuan financial services. In the event of any conflict or inconsistency

between the provisions of this Act with the Act of the Board of the financial services and Securities Services Labuan Labuan Financial 221, 1996 financial services Board Act 1996 shall prevail. Labuan


The adoption of the financial services and Securities Act of Islam Labuan 2010 181. (1) a licensed entity conducting or mengurusniagakan or submit himself to be run or mengurusniagakan business Islamic banking, Islamic investment banking business, takaful, takaful re or any other business under this Act that complies with shariah, shall comply with the provisions of the financial services and Securities Act of Islam Labuan 2010 in matters of shariah compliance is concerned, subject to any modifications made by the Board in accordance with the guidelines.

(2) if there is any conflict or inconsistency between the provisions of this Act to the financial services and Securities Act of Islam Labuan 2010 in matters of shariah compliance is concerned, the provisions of the financial services and Securities Act of Islam Labuan 2010 should be overcome.


Application of the Exchange Control Act 1953 182 *. (1) subject to subsection (2) and (3), no nothing in this Act affects the provisions of the Exchange Control Act 1953 and the application of any provision of this Act to any person or licensee bank, such provisions shall apply subject to the provisions of the Exchange Control Act 1953 *.

* NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758].
222 laws of Malaysia ACT 704 (2) if there is any conflict or inconsistency between the provisions of this Act with the Exchange Control Act 1953 *, the provisions of the Exchange Control Act 1953 * shall prevail.

(3) the provisions of the Exchange Control Act 1953 * does not apply in respect of any transactions which are exempted under the Act and any guidelines, circulars or notice issued under it.


Application of the capital markets and Services Act 2007 183. (1) subject to subsection (2) and (3), no nothing in this Act may affect the capital markets and Services Act 2007 and the application of any provision of this Act to any person, such provisions shall be applicable subject to the capital markets and Services Act 2007.

(2) if there is a discrepancy or inconsistency between the provisions of this Act with the capital markets and Services Act 2007, the provisions of the capital markets and Services Act 2007 shall prevail.

(3) the provisions of the capital markets and Services Act 2007 does not apply for a licensed entity with respect to any activities licensed under this Act, when the licensed activities in Labuan or outside Malaysia.


Application of the companies Act 1990 Labuan and the companies Act 1965 184. (1) in addition to, and does not reduce, the provisions of this Act — (a) of the Labuan 1990 shall apply to — * NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758].
Financial services and Labuan Securities 223 (i) licensee who is not a licensee bank bank Malaysia; and (ii) licensee is the insurance company's Labuan Labuan or foreign; and (b) of the companies Act, 1965 shall apply to — (i) licensee banks or licensed entity licensed under section 90 which is the Office of a bank established under the Act; and (ii) licensee of insurance which is a branch of a Malaysian insurers.

(2) if there is any conflict or inconsistency between the provisions of this Act with any other Act referred to in subsection (1) in its application to licensed entities, respectively, the provisions of this Act shall prevail.

(3) if there is any difficulty or doubt arising in the application of subsection (1) in relation to any entity licensed individuals or any matter or circumstances of a specific or in General, the Board may resolve it by issuing instructions about the issue.


Disapplication of certain law 185. (1) no holder of a licence bank may, in respect of any business carried out by the holder of such licence, subject 224 laws of Malaysia ACT 704 to any provisions * of the banking and financial institutions Act 1989 and * * the Islamic Banking Act 1983.

(2) No licensee of insurance may, in respect of any business carried out by the holder of a licence under part VII, subject to any provision * * * the Insurance Act 1996 and † Takaful Act 1984.

(3) for the purposes of part IX — (a) the provisions of the capital markets and Services Act 2007 does not apply for the establishment, exercise, activity and any business exchange established under Chapter 2 part IX;

(b) section 7, subsection 21 (2), section 24, 85, subsection 87 (2), 87 (4), 87 (5), 87 (10), 93 (2), 93 (6) and 93 (7) of the Labuan 1990 does not apply for any exchanges established under Chapter 2 part IX; and (c) the provisions of the Holidays Act 1951 [Act 369] shall not apply to any exchange established under Chapter 2 part IX and any Exchange under Chapter 2 part IX may conduct its business for twenty-four hours per day on any and all days per week subject to any limitations or restrictions imposed by or under the by-laws or rules , as the case may be.
* NOTE — of the banking and financial institutions Act 1989 [Act 372] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758]. ** The ENTRIES — the Islamic Banking Act 1983 [Act 276] was repealed by the Islamic financial services Act 2013 [Act 759] — see sections 282 and 283 of Islamic financial services act 2013 [Act 759]. NOTE — the Insurance Act 1996 [Act 553] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 and 272 of the Financial Services Act 2013 [Act 758]. † ENTRIES — the Takaful Act 1984 [Act 312] was repealed by Act Services

Islamic finance 2013 [Act 759] — see sections 282 and 283 of Islamic financial services act 2013 [Act 759].
Financial services and Labuan Securities 225 (4) the provisions of the trust companies Act 1949 [Act 100] does not apply for a company registered as a trust company, Labuan Labuan trust companies managed or private trust companies in Labuan.


186 immunity. (1) no action, suit, prosecution or other proceeding may be made or brought, instituted or maintained in any court or any other tribunal to any person the following: (a) the Minister;
(b) the Board;
(c) any member of the Committee, officers, servants or agents, the Board; and (d) any other person who by law acting on behalf of, or in compliance with the directions of the Board, for or by reason of, or in connection with, any act done or statement made or left than done or made, or purporting to be made or made to or left than done or made pursuant to or as performing, or is meant to in accordance with this Act or perform , or any guidelines, instructions, advice or anything else released under this Act: provided that the acts or statements is done or made, or left than done or made in good faith.

226 laws of Malaysia ACT 704 (2) subsection (1) shall be in addition to, and does not cut, the public authorities Protection Act 1948 [Act 198], and for the purposes of the Act, every person referred to in subsection (1) shall be deemed to be public officers or persons engaged or employed in carrying out the duties of the public.

(3) the Public authorities Protection Act 1948 shall apply to any action, suit, prosecution or proceeding of the Board or of any member of the Board, any member of the Committee, or any of its officers, servants or agents of the Board in respect of any act, neglect or default done or omitted from the property on foolishness.


General penalty 187. (1) any person who contravenes a requirement of this Act commits an offence.

(2) any person guilty of an offence against this Act for which no penalty is provided for expressly may — (a) in the case of a body, incorporated or unincorporated, liable to a fine not exceeding three million dollars;
or (b) in the case of an individual, to a fine not exceeding one million dollars, and in the case of a continuing offence, may, in addition, a daily fine not exceeding five thousand dollars for each day the offence continues to do.




Labuan financial services and Securities offences by body corporate 227 188. If a body corporate commits an offence under this Act or any regulations made under this Act, any person who, at the time of the Commission of the offence, was a Director or such other officer or purporting to act on any such properties — (a) can be prosecuted separately or in association in the same proceedings together with the body corporate; and (b) if the body corporate were found guilty of that offence, shall be deemed to have committed the offence unless, having regard to the type of functions on the properties and all the circumstances, he proves — (i) that the offence was committed without the knowledge, consent or pembiarannya; and (ii) that he took all reasonable steps and conducted all due diligence to prevent the Commission of the offence.


Annual fee and license fee 189. (1) the Board may fix any annual fees, licence or registration by regulations in respect of the activities of the licensed entity or entity registered or other activities under this Act.

(2) the fee prescribed shall be paid on or before January 15 of each year following the year that any consent, license or registration granted.

228 laws of Malaysia ACT 704 (3) any fees not paid may be sued thereon by the Board through acts as a civil debt and in addition the Board may require the payment of penalties for late payment to the extent of an amount equivalent to twice the amount of the fee is not paid, and the cost of getting that amount including but not limited to the cost of legal proceedings.


Fees and penalties shall be paid into the funds of the 190. (1) all fees and penalties paid to the Board under this Act and all sums payable under this section shall be paid into and form part of the Fund established under section 29 of Labuan Financial Services Act 1996.

(2) Notwithstanding subsection (1), all the fee payable under section 140 part IX shall be paid into the funds of the Exchange or any other Exchange established under Part IX and can be used in accordance with the provisions of the by-laws of the Exchange or any other Exchange.


Procedure when there is no procedure stated 191. In the event of any act or step required or allowed to be done or taken under this Act and no specified form or procedure set out in this Act or the regulations, the application may be made to the Board for directions about the manner in accordance therewith Act or the move may be made or taken, and any act or move made or taken in accordance with such instruction shall be a valid implementation of the Act or the move.




Financial services and Labuan Securities misrepresentation 192 229. A person who — (a) knowingly or with reckless driving make a misstatement in any document or material or records are required to be filed, given or sent submit under this Act;

(b) make any statement or provide any information required under this Act that he knows to be false or misleading;

(c) by disedarinya does not disclose any facts or information required in order to be disclosed under this Act; or (d) have custody over, or has possession or control of the singly or together with another person or with a few others or have control over any information, record, book or other document referred to in the provisions of this Act

who refused to ignore or knowingly to comply with any direction valid in law granted under such provisions, commits an offence and shall, on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Enforcement of 193. (1) where — (a) a licensed entities are insolvent or likely to become unable to meet all of its obligations or 230 laws of Malaysia ACT 704 or will suspend payment on any point;

(b) a licensed entity principals, officers, an officer or any other person similar to that which carries on business in the manner that you trust the Board with reasonable as harmful to the interests of a trust, investors, his creditors or any other similar stakeholders;
or (c) a licensed entity principals, officers, an officer or any others similar has violated any provision of this Act or any other written law in force, the Board may — (A) if applicable, impose terms, conditions, restrictions or limitations on new or additional operating entities licensed or vary or revoke any terms, conditions, restrictions or limitations that have been imposed;

(B) require the removal of any officer, principal officer or any other similar entity person licensed by another person approved by the Board;

(C) appoint a person, on behalf of the Board, to take over control over the Affairs of the licensed entity; or (D) apply to the Court for an order to take any action deemed necessary by the Board to protect the interest of beneficiaries, investors, creditors or any other similar stakeholders entities licensed it.
Financial services and Labuan Securities 231 (2) the Board may bring actions and proceedings to enforce any provision of this Act or to obtain fees or other sums payable under this Act or the expenses incurred by the Board in carrying out its obligations under this Act.


Power to compound 194. (1) the Board may, with the written consent of the public prosecutor, in case he deems fit and proper to do so, mengkompaunkan any offence committed by any person is punishable under this Act by making an offer in writing to that person to mengkompaunkan the offence on payment to the Board, within the time specified in the offer, an amount not exceeding fifty per cent of the amount of the maximum fine that the person may be imposed if he is convicted of the offence.

(2) an offer under subsection (1) may be made at any time after the offence, but before any prosecution for him started.

(3) if the amount specified in the offer under subsection (1) is not paid within the time specified in the offer, or within such further period as may be allowed by the Board, a prosecution for the offence may be commenced at any time after that to the person to whom the offer was made.

(4) If an offence is compounded under subsection (1), no prosecution shall be instituted subsequently in respect of the offence against the person to whom the offer was made.

(5) any money paid to the Board in accordance with subsection (1) shall be paid into and form part 232 laws of Malaysia ACT 704 of the Fund established under section 29 of Labuan Financial Services Act 1996.


Delivery of document 195. (1) any document or notice required in order to be delivered by the Board to the licensed entity, something mutual funds, a self-regulatory organization or an Exchange under this Act may be served by leaving it at, or send it by mail, to the registered office of the licensed entities, mutual funds, self-regulatory organization or that particular Exchange.

(2) If a document or notice has been served in accordance with subsection (1), a document or notice is deemed to have been properly communicated to licensed entities, mutual funds, self-regulatory organization or that particular Exchange.


Power of Minister to make regulations 196. The Minister may, on the recommendation of the Board, make regulations prescribing all matters and things required by the Act to set or provided, for exercise, or fully implemented, the provisions of this Act.


Minister's power to issue directions 197. (1) the Minister may, on the recommendation of the Board, writing in the public interest, issue, by notification in the Gazette, a command — (a) prohibits the establishment of any business or activity, including any business class or its activities;
or financial services and Labuan Securities 233 (b) order the licensed entity, to stop running its business or any part of its business either immediately or within such time as is specified in the instructions.

(2) an order made under this section may be revoked or varied by the Minister.


Minister's power to amend the schedule of 198. (1) the Minister may, on the recommendation of the Board, from time to time by order published in the Gazette, amend, delete, add, replace, or otherwise amend any schedule to this Act and when the order has been published, the schedule as modified, cut, added, replaced or otherwise amended, shall have force and effect and shall be deemed to be an integral part of this Act from the date of publication of the , or from any later date indicated in the order.

(2) the Minister of the change, delete or substitute any of the schedule referred to in subsection (1) may impose such terms and conditions as he may deem necessary.


Power of Minister to give exemption 199. The Minister may, on the recommendation of the Board, exclude any entity licensed Labuan from any provisions of this Act and may, in granting such exemption, impose such terms and conditions as the Minister thinks fit.


Publication of Gazette notification, 200. Without prejudice to any other provisions of this Act, the Board shall, either as provided

234 laws of Malaysia ACT 704 expressly in the provisions or if no period is stated, with as soon as practicable, publish the notification, including the Gazette notification, but any delay in posting such notice shall not in any way affect the validity of the notification or the content or order made it.


Revocation, exemption and transitional 201. (1) for the purposes of this section, "effective date" means the date specified by the Minister under section 1.

(2) the Labuan trust companies Act 1990 [Act 442], the Offshore Banking Act 1990 [Act 443], the offshore Insurance Act 1990 [Act 444] and the Labuan Offshore securities industry, 1998 ("the Act repealed") repealed starting from the effective date.

(3) Notwithstanding subsection (1) — (a) all — (i) the regulations, orders, instructions, notifications, exclusions and other subsidiary legislation, no matter by whatever name called; and (ii) all approvals, instructions, decisions, notifications, exclusions and other executive actions, no matter by whatever name called, made, given or done under or in accordance with, or by virtue of the repealed Act shall be deemed to have been made, given or done under, or by, or by virtue of, provisions equivalent to this Act, and shall remain in force and effect in relation to persons to whom it applies until the financial services and securities Labuan 235 is amended , revocation, diungkai, cancelled or replaced under, by or under the authority of, the provisions equivalent to this Act;

(b) every instructions, notices, guidelines or circulars issued by the Board or the Minister under the repealed Act before the effective date and in force immediately before the effective date, shall be deemed to have been issued according to law under this Act relating to specific provisions of this Act equal to the things being said in the instructions, notices, guidelines or circulars and shall remain in force and effect until amended , diungkai or repealed under this Act;

(c) any application for the approval or consent, or for any other purpose whatsoever, or any appeal relating to the application, which is made by any person to the Minister or to the Board under the Act that repealed it before the effective date, and that is pending immediately before the effective date, shall, if there is a corresponding provision in this Act , managed as if it is made under the provision and, if such equivalent provision does not exist in this Act, the application or the appeal shall lapse on the effective date; and (d) all transactions or transaction pursuant to applicable law, implemented or made according to law, and all business conducted according to law, under the repealed Act, or by a person approved or registered under the repealed Act, with any other person, shall be deemed to have been exercised, made or done, under and in accordance with this Act, and accordingly , any right or liability under 236 laws of Malaysia ACT 704 transaction or transaction that, immediately before the effective date, shall be deemed to continue to be valid in law and valid under this Act.

(3) where a reference is made in any written law about "Act Labuan Offshore securities industry 1998", "Offshore trust companies Act 1990", "Offshore Banking Act 1990", and "the offshore Insurance Act 1990", on and after the date specified, references shall be construed as a reference to relevant section in this Act.

(4) without prejudice to the generality of paragraph above, the Labuan international financial exchange, which was established by the Minister under section 30 of the Act Labuan Offshore securities industry 1998 repealed and approved and recognized immediately before the effective date shall be deemed to have been approved under the provisions of this Act equal.

(5) any conditions or restrictions imposed by the Minister on the Labuan international financial exchange and in force immediately before the effective date shall be deemed to be conditions or restrictions to which such ratification or approval under this Act is subject.

(6) without prejudice to the generality of subsection (2) and subject to the provisions of this Act, any person who holds any of the following licences or are allowed to be registered, as the case may be, immediately before the effective date shall, from that date, be deemed to be licensed under this Act in respect of activities undertaken by it under the first-mentioned: (a) the licence Manager given under the Labuan Offshore securities industry 1998 repealed;

(b) the administrator who is registered under the Labuan Offshore securities industry 1998 repealed;
Financial services and Labuan Securities 237 (c) trust companies registered under the Labuan trust companies Act 1990 repealed;

(d) the offshore banking licenses and offshore investment banking licence granted under the banking Offshore 1990 repealed;

(e) the offshore insurance license granted under the offshore Insurance Act 1990 repealed.

(7) any conditions or restrictions to which any licence or registration referred to in subsection (6) is subject immediately before the effective date, to the extent it is consistent with the provisions of this Act, shall be deemed to be a condition or restriction to which a corresponding licence referred to in subsection (6) is subject.


Survivorship rights, other liabilities, etc., of another under the repealed Act 202. (1) Nothing in the repealed Act or this Act may affect the liability of any person prosecuted or sentenced for offences or violations committed under the repealed Act before the effective date or any proceedings that have been brought, the sentence that has been imposed or action had been taken before that day in respect of the offence or the breach.

(2) any right, privilege or obligation or liability acquired, accrued or done before the effective date or

any legal proceedings, remedies or investigation in respect of any right, privilege, obligation or liability not affected by this Act and shall remain in force as if this Act had not been made.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 238 laws of Malaysia ACT 704 FIRST SCHEDULE [subsection 2 (1); the definition of "Director"] is the first column (people) Second Space (Director) Third Space (established) the Fourth Space (participant) Corporation Partnership Cooperative statutory bodies Sharing limited a person who serves as Director of the Corporation, regardless of its name called, and includes any person in accordance with the instructions or advice of the Director of the Corporation usually acts and one alternate Director or another Member of the Board of fibre or other organizing bodies of the cooperative , regardless of whose name is called a member of the Board, Committee, Council or other statutory bodies of the organizing body that, regardless of its name called partner general partner (or person who holds similar role) incorporated registered, incorporated or otherwise established in law as a cooperative of its existence under laws that establish, appoint or membentuknya its formation or if the registration form or the form of recording member shareholder or shareholder , if the statutory body that does not have a share capital, a person as a whole separate or in association with others who have the statutory body partner partner financial services and securities Labuan 239 first column (people) Second Space (Director) Third Space (established) the Fourth Space (participants) limited liability partnerships sole ownership of the specified partner (or person who holds similar role) a single owner is required before recognition of other activities or business can be started according to the law , registration, recording or recognition by-undangnya under the laws that apply to form or if registration or other forms of recording or recognition required before the activity or business can be started according to the law, registration, recording or recognition by-undangnya under the laws that apply if registration or other forms of recording or recognition required before the activity or business can be started according to the law, registration, recording or recognition by-undangnya under applicable law partner limited single owner 240 laws of Malaysia ACT 704 (first column people) Second Space (Director) Third Space (established) the Fourth Space (participants) any body, association or other group of persons whether incorporated or not incorporated any person having command or control over the management of the business affairs or if registration or other forms of recording or recognition required before the activity or business can be started according to the law, registration, recording or recognition by-undangnya under applicable law for members of the body , the Association or group, regardless of its name is called _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ the SECOND SCHEDULE [subsection 2(1)] professional associations recognised in respect of the actuarial condition of the Institute of Actuaries of England Faculty of Actuaries in Scotland Actuarial Societies in the United States the Institute of Actuaries Canadian Institute of Actuaries of Australia any other association approved by the Board _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ financial services and Labuan Securities 241 THIRD SCHEDULE [section 99 and 111] financial information and statistics and information for submission to the Board section A : Licensee bank financial statements within six months after the end of each financial year a licensee bank, or any extended period granted by the Board, the holder of a licence bank shall submit to the Board, in respect of its entire business operations, two copies of each annual balance sheet that terauditnya the latest profit and loss account, a statement indicating the sources, provision and use of the money and the Auditors ' report.


Statistics and information (1) every licensee bank, at any frequency determined by the Board from time to time, submit to the Board a statement showing the assets and liabilities of the bank licensee in respect of the banking business of Labuan or Labuannya investment banking business, as the case may be.

(2) a statement submitted under paragraph (1) shall include — (a) a statement indicating the total amount of credit facilities granted by the bank license to any licensee customers the bank specified by the Board;

(b) a statement indicating the class, category or description of credit facilities and business or industry in which customers that bank licensee is involved;

(c) a statement showing the licensee bank has complied with the requirements imposed upon it by section 100; and (d) any statement, document, information, or other statements of statistics as may be determined by the Board.

242 laws of Malaysia ACT 704 (3) Notwithstanding paragraph (2), the Board may publish any consolidated statement, with respect to any category, class or description of licensee bank considered appropriate by the Board, with mengagregatkan figures in the statement submitted under paragraph (1): provided that nothing-nothing in this paragraph may empower the Board to prescribe any particular bank licensees to become a category , class or description of licensee bank for the purposes of this paragraph.

(4) where any person is required by or under this section to produce, issue or provide to the Board any

information, statistics, statement or document, the Board may determine that information, statistics, statement or document presented, issued or given in accordance with such form and manner and within such period or at any interval or time, in accordance with any provision of this section or any regulations made under this Act, as may be specified by the Board in the determination; and that person cannot produce, issue or provide any information, statistics, statement or document which he knows, or who he has reason to believe, are false, inaccurate and misleading as the information, statistics, statement or document is correct or accurate.


Part B: Financial Statements of insurance licensees (1) every insurer Labuan shall, within six months after the end of each financial year or such extended period as approved by the Board, submit to the Board, with respect to the overall operations of insurance Labuannya, four copies of each annual balance sheet profit ruginya terauditnya, account, revenue account and, in respect to his life insurance business, a report stating the actuarial valuation of the assets and liabilities as may be approved in accordance with document konstituennya.

(2) every insurer Labuan shall submit to the Board four copies of every document referred to in paragraph (1) as may be approved in accordance with document konstituennya with as soon as practicable after the approval.

(3) every insurer Labuan Labuan company is a foreign must, in addition to the financial statements that are required to be submitted to the Board under paragraph (1), also submit each year a copy of the certified balance sheet annual terauditnya that the overall operations in the financial services and Securities and Labuan Labuan 243 out within three months after the balance sheet filed with the regulatory authorities in the country of establishment or originally.

(4) every insurance Manager, underwriting Manager licensed Labuan Labuan Labuan insurance broker is licensed and licensed shall, within six months after the end of each financial year or such extended period as approved by the Board, submit to the Board four copies of each annual balance sheet and profit and terauditnya account ruginya.

(5) Notwithstanding any provision in this Act, the Board may require a licensee to submit to the Insurance Board of any document relating to its operations in such manner as specified in writing by the Board.


Part c: additional terms notwithstanding the above, the Board may impose new or additional requirements for matters specified in this table.


_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 244 laws of MALAYSIA Act 704 FINANCIAL SERVICES and SECURITIES ACT of LABUAN 2010 LIST AMENDMENT of laws that amend the short title effect from-no-245 laws of MALAYSIA Act 704 FINANCIAL SERVICES and SECURITIES ACT of LABUAN 2010 LIST SECTION AMENDED Section Power amend with effect from-no-