* Labuan Islamic Financial Services And Securities Act 2010

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

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.
Laws of MALAYSIA ONLINE VERSION of the PRINT TEXT that UPDATES Act 705 FINANCIAL SERVICES and SECURITIES ACT of ISLAM LABUAN 2010 As at 1 October 2015 2 FINANCIAL SERVICES and SECURITIES ACT of ISLAM LABUAN 2010 date of Assent......... January 31, 2010 the date of publication in the Gazette............ February 11, 2010 3 laws of MALAYSIA Act 705 FINANCIAL SERVICES and SECURITIES ACT of ISLAM 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. Compliance with Shariah principles of the SHARIAH SUPERVISORY COUNCIL PART II 7. The establishment of the Shariah Supervisory Council 8. Shariah Supervisory Council function 9. The authority to decide and advise you on the 10. Appointment of members of the Shariah Supervisory Council 11. The reference by the Court or arbitrator in deciding 4 laws of Malaysia ACT 705 PART III SECURITY Chapter 1 offer security section 12. Interpretation of 13. Offer or invitation requiring approval of the Board 14. False or misleading statement 15. Ad 16. Registration of prospectus 17. Documents containing the offer of securities shall be made by the Labuan trust companies or licensees of the bank or bank Islam and licensee shall be deemed to be a prospectus 18. The agreement of the expert on the production of the prospectus containing statement by him 19. Civil liability due to erroneous statement in the prospectus 20. Criminal liability because of a mistaken statement in the prospectus 21. Labuan trust company bank licensee or licensee Islamic banks as agents for deals 22. Prohibition of allotment unless minimum purchase application received 23. Application money shall be held in trust until the publication or allotment Chapter 2 Sukuk 24. Authority to issue the Sukuk 25. Trustee for holders of Sukuk 26. Waiver and indemnity for holders of the Sukuk trustee from liability 27. The duty of the trustee for holders of Sukuk Islamic Securities and financial services of Labuan 5 Section 28. Obligations of the directors of the borrower 29. The company's obligation of the guarantor to provide information 30. Money shall be payable immediately upon the occurrence of certain 31. The detention of the Sukuk issue terpohon buy excess PART IV ISLAMIC MUTUAL FUNDS Chapter 1 the beginning of 32. Interpretation of Chapter 2 Fund Islamic private 33. Notification by the private funds of Islam 34. Islamic private funds shall deliver information memorandum or other document 35. Waiving liability for error or omission in the information memorandum or other document Chapter 3 public funds Islam 36. Islamic public funds must be registered 37. Application by public funds Islam 38. Power to allow or refuse to allow the registration of public funds Islamic 39. Procedure of registration 40. The prospectus relating to the Islamic public fund 41. Investor rights 42. 6 limitations of the laws of Malaysia ACT 705 Section 43. Certificate of conformity of 44. Public funds foreign Islamic can be managed or administered in Labuan Chapter 4 fund managers and Fund Administrator 45. Fund managers or administrators of funds for Islamic public fund 46. Obligations of the Fund managers and fund administrator for Islamic public funds 47. Obligations of the Fund managers and the administrator funds under applicable law 48. Specific obligations for public fund managers Fund Islamic 49. Obligation to isolate customer assets Chapter 5 the trustee or guardian 50. The eligibility of a trustee or guardian of public funds Islam 51. Duty of trustee or custodian and Director under applicable law 52. Obligation of the Fund Manager, custodian or trustee to act independent of each other Chapter 6 Express and accounting 53. Express 54. Accounts and audit financial services and securities Islam Labuan 7 part V LICENSING of MARKET INTERMEDIARIES Chapter 1 preliminary section 55. Interpretation of Chapter 2 licensee 56 Islamic securities. Licensee of Islamic securities 57. Application for licence 58. Power to allow or reject the application for licence 59. Form of licences of LABUAN ISLAMIC BANKING PART VI Chapter 1 the beginning of 60. Interpretation of Chapter 2 Licensing Labuan Islamic banking business 61. Labuan Islamic banking business shall be carried out only under licence 62. Labuan Islamic investment banking business shall be carried out only under licenses 63. Application for a license to carry out banking business Islam Labuan 64. Application for a licence to carry out Islamic investment banking business of Labuan 8 laws of Malaysia ACT 705 Section 65. Application for a licence to carry on the business of Labuan Islamic finance 66. Additional information 67. Grant of a license by the Board of 68. Requirements to use, and restrictions on the use of the word, "bank Islam Labuan", etc.
69. The preservation of capital adequacy ratio 70. Amendment or variation of constituent documents of bank Islam 71 licensees. The Board shall publish the list of licensees bank Islam Labuan Chapter 3 obligations of licence holders 72 Islamic banks. The main office and 73. Prohibition of certain account 74. Financial statements, statistics and information should be submitted to the Board of 75. Payment of the deceased's account PART VII of the TAKAFUL BUSINESS LABUAN LABUAN TAKAFUL RELATED ACTIVITIES and Chapter 1 the beginning of 76. Interpretation of Chapter 2 Licensing 77. Licensing business of takaful takaful related activities and Labuan Labuan financial services and securities Islam Labuan 9 Section 78. Application for licence takaful to carry on the takaful business Labuan 79. Application for licence takaful to carry on the takaful Labuan related activities 80. Takaful licenses 81. Publication of a list of all licensees takaful Labuan 82. Continuation of the licensing requirements of Chapter 3 of the Financial Needs and obligations and restrictions on licensee takaful 83. The appointment of actuarial 84. Solvency margin of 85. Separation of the takaful Fund 86. Separate accounts shall be kept by the takaful operator Labuan 87. Presentation of the financial statements 88. Subsidiary and licensee takaful 89. Restriction on business of takaful licensees by the takaful operator Labuan

90. Restrictions on and the duty manager of the takaful Labuan, an underwriting Manager of takaful takaful brokers Labuan Labuan and 91. List of the takaful operator of Labuan shall be supplied by the Manager of takaful takaful underwriting Manager and Labuan Labuan 92. Conduct of business Chapter 4 Payment Policy moneys under the policy of takaful family and personal accident takaful policy 93. Application of this Chapter 94. The power to make the naming of 95. Revocation of naming 10 laws of Malaysia ACT 705 Section 96. Payment of moneys policy 97. Trustee of the money policy 98. Nominee other than a nominee under section 97 99. Money policy diserahhakkan or backed up 100. Payment of money policy if there is no naming 101. Payments to people who are not competent to contract to 102. Distribution of policy moneys in the course of proper administration of 103. This chapter shall supersede the policies and any other written law Chapter 5 Liquidation 104. The winding up of the takaful operator Labuan LABUAN ISLAMIC TRUST VIII DIVISION 105. The establishment of the Labuan Islamic trust 106. The assets of the trust Islam Labuan LABUAN ISLAMIC FOUNDATION PART IX 107. The establishment of the Islamic Foundation of Labuan 108. The aims and purposes of 109. Charter of 110. Financial services assets of Islamic securities and Labuan 11 part X LIMITED SHARING ISLAM LABUAN LIMITED LIABILITY PARTNERSHIPS and LABUAN ISLAMIC Section 111. The establishment of the partnership limited Islam Labuan and limited liability partnerships Islam Labuan 112. Goals and purpose of PART XI SELF-REGULATORY ORGANIZATION ISLAMIC 113. Declaration or recognition of self-regulatory organization Islamic 114. Rules of self-regulatory organization Islamic 115. Restrictions on manufacturing decision of 116. Obligations for and in respect of the officer of a self-regulatory organization Islamic 117. The power to direct the self-regulatory organization Islamic 118. Termination of arrangements and cancellation declaration or recognition of 119. Amendments to the Constitution of the self-regulatory organization Islamic 120. Cover for self-regulatory organization Muslim 121. The financial statements of a self-regulatory organization Islamic 122. Powers of the Board in respect of self-regulatory organization Islamic PART XII AM 123. Appeal 124. Revocation of consent, license or registration of 125. Procedure for cancellation of 126. Surrendering a license 127. Consequences of revocation and surrender of licence 128. Transfer business 12 laws of Malaysia ACT 705 Section 129. Additional licensing requirements for licensee bank Islam and takaful 130 licensees. The establishment of the Advisory Board of internal licensee Shariah Islamic securities and fund managers 131. Shariah Islamic trust for Labuan, Labuan Islamic Foundation limited sharing Islam Labuan or Labuan Islamic limited liability partnerships 132. Shariah compliance review internal 133. Shariah compliance review external 134. Internal audit 135. The external auditors 136. Payment systems 137. Accounts and records of 138. Inspection and review of the books and documents of an entity licensed 139. Confidentiality of 140. Confidentiality in respect of the Supervisory Council of the Shariah 141. VB 142. Application of the Exchange Control Act 1953 143. Application of the capital markets and Services Act 2007 144. Application of the companies Act 1990 Labuan and the companies Act 1965 145. Application of the Labuan financial services Board Act 1996 146. Disapplication of certain laws 147. Protection against legal and legal proceedings 148. Penalties am 149. Offences by body corporate 150. Annual fees and licenses 151. Procedure where no specified 152. Misstatement 153. Enforcement of 154. Power to compound 155. Delivery of financial services documents and Labuan Islamic securities 13 Section 156. Power of Minister to make regulations 157. Minister's power to issue directions 158. Minister's power to amend the schedule of 159. Power of Minister to give exemption 160. Publication of Gazette notification, 161. Savings and transitional FIRST SCHEDULE SECOND SCHEDULE of the THIRD SCHEDULE of 15 laws of MALAYSIA Act 705 FINANCIAL SERVICES and SECURITIES ACT of ISLAM LABUAN 2010 an act to provide for the licensing and regulation of financial services and Labuan Islamic securities and for other articles related to it.

[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 and Securities Act of Islam Labuan 2010.

(2) of this Act come into force on such date as the Minister may, by notification in the Gazette and the Minister may set different dates for the commencement of different divisions or different provisions in this Act.


Interpretation 2. (1) in this Act, unless the context otherwise requires — "actuary" means a person who is — 16 laws of Malaysia ACT 705 (a) a fellow of any professional associations listed in the second schedule or other association approved by the Board; or (b) a person recognized by the Board as an actuary for the purposes of this section, the list of actuarial maintained by the Board;

"trust" means a 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;

"Labuan Islamic trust" means a trust which is established under section 105;

"bank Islam Labuan" means a person licensed to conduct Islamic banking business of Labuan under part VI;

"bank Labuan" means a person licensed to carry on banking business of Labuan under part VI of the Financial Services Act and Labuan Securities 2010 [Act 704];

"bank" means a licensed bank as defined in * of the banking and financial institutions Act 1989 [Act 372], or an Islamic bank as defined in * * the Islamic Banking Act 1983 [Act 276];

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

* 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 of the Act 758. ** The ENTRIES — the Islamic Banking Act 1983 [Act 276] was repealed by the Islamic financial services Act 2013 [Act 759] — see section 282 of the Act 759.

Financial services and securities Islam Labuan 17 "Labuan investment bank" means a person licensed to carry on banking business Labuan investment under part VI of the Financial Services Act and Labuan Securities 2010;

"dealing in 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 get profit for any party of securities or by reference to fluctuations in value of the securities;

"Islamic public fund" means an Islamic mutual funds other than funds private Islam;

"mutual funds" or "Fund" means a Labuan company, a corporation incorporated under the laws of any country or jurisdiction is recognised, partnership, a protected cell company, Foundation or trust that — (a) to collect or 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, 18 laws of Malaysia ACT 705 and umbrella funds including its interest in mutual funds or unit is divided into some number of funds Fund different classes or small prizes and reserves the right to modify in one piece to the right of the other part;

"mutual funds Islamic" or "Muslim" means a funds mutual funds or fund established expressly for the purpose that the goals and operations of the Fund shall comply with Shariah principles;

"private Islamic Fund" means an Islamic mutual funds — (a) that its security is owned or held by — (i) not more than fifty investors who are first-time investments every investor that is not less than two hundred and fifty thousand dollars or such other amount as may be prescribed by the Board or equivalent in any foreign currency; or (ii) any number of investors who are first-time investments every investor that is not less than five hundred thousand dollars or such other amount as may be prescribed by the Board or equivalent in any foreign currency; or (b) that has been designated as a private fund under Islamic regulations made by the Minister, and established expressly for the purpose of some of the goals and operations of the Fund shall comply with Shariah principles;

"established", in respect of 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;
Financial services and securities Islam Labuan 19 "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 of this Act;

"Shariah non-compliant securities entities" means any person who is licensed or registered under the laws administered by the Board in addition to the Act and that carries on any business or part of its business that complies with Shariah principles;

"Labuan Islamic licensed institution" means a person licensed to carry on the Labuan Islamic finance business under part VI;

"approved auditor" means the auditor is approved under section 10 of the companies act of Labuan 1990 [Act 441];

"Director General" means the Director General of the Board;

"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];

"Shariah internal Advisory Board" means the Board established under section 130;
"licence" means a licence granted under this Act;

"Islamic banking licence" means a licence granted pursuant to an application under section 63 or 64, as the case may be;
20 laws of Malaysia ACT 705 "takaful licence" means a licence granted under part VII;

"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;

"Shariah Supervisory Council" refers to body established under section 7;

"foreign currency" means any currency other than dollars;

"Court" means the High Court or a high court judge;

"Shariah Supervisory Council" refers to body established under section 7;

"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 and "determined" shall be construed accordingly;

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


Financial services and securities Islam Labuan 21 "Minister" means the Minister charged with the responsibility for finance;

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

"eligible person" means a person who — (a) is not a bankrupt who is not discharged;

(b) has not been convicted of any offence arising out of criminal proceedings;

(c) has a good reputation and character; and (d) have the necessary qualifications and expertise in commercial law of Islam or Islamic jurisprudens, and includes a corporation that has in its employment at least one person who meets the criteria referred to in paragraphs (a) to (d);

"those who control", in respect of an applicant for a licence or entity licensed under this Act, means any person who — (a) is 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 entity, and for the 22 laws of Malaysia ACT 705 implement that decision or causing the decision was implemented;

"self-regulatory organization Islam" means the self-regulatory organization established under Part XI expressly for the purpose that the goals and operation of the self-regulatory organizations that comply with Shariah principles, which aim is to regulate the operations of its members or users of its services, standard or practice and the conduct of its business in order to protect investors and consumers securities or services related to and including any other organizations as may be declared or recognized as such by the Board;

"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 appointed under a power contained in any instrument, any part of the undertaking or property of the Corporation; 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 financial services and securities Islam Labuan 23 (C) a liquidator appointed by the Court or by creditors;

"the trust officer" means an officer of Labuan trust companies approved and designated as an officer of the trust by the Board;

"authorized officer" means an officer duly authorized by the Board;

"principal officer", in relation to a licensed entity, means a person, regardless of whatever name called, which 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;

"licensee bank" means a bank Labuan or Labuan investment banks licensed under part VI of the Financial Services Act and Labuan Securities 2010;

"licence holders of bank Islam" means bank Islam Labuan Labuan Islamic and investment banks;

"licence holders of bank Islam Malaysia" means licensee bank Islam which is an Office or subsidiary for banks;

"takaful licensee" means any person licensed under part VII;

"Shariah" means a person who is eligible to be appointed by any licensed entity or entity in accordance with this Act to advise on matters relating to the Shariah principles;

24 laws of Malaysia ACT 705 "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 dealing in securities or any other activities as determined by the Board;

"keeper" means the person charged by an Islamic mutual funds 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 Islamic mutual funds administrative services or facilities only or together with accountancy services;

"the establishment", in respect of — (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;

(e) the sole ownership of the means of its business registration;
and financial services and securities Islam Labuan 25 (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 written law 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;

"Corporation" means a body corporate formed or incorporated or exists in Malaysia or outside Malaysia and includes any company Labuan foreign but does not include — (a) a corporation sole;

(b) a trade union registered under any written law as a Trade Union; and


(c) a body that is registered under any written law as a cooperative;

"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;

"limited liability partnership" means a limited liability partnerships formed under the Limited Partnerships and limited liability partnerships Labuan 2010 [Act 707], part X, 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 Partnership Act and sharing 26 laws of Malaysia ACT 705 limited liability company, Labuan 2010, part X, or under the law of any country or jurisdiction recognized notwithstanding any statutory definition to the contrary;

"sharing limited Islam Labuan" or "limited liability partnership" means a partnership Islam Labuan established under section 111;

"the participants", in respect of 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 supervisory functions similar to the functions of the Board or any person who carries out the function of supervision as may be deemed appropriate by the Board after taking into account the representations made by the person about the desire or need for inspection;

"Shariah principles" includes the principles and the concept of Islamic law that has been passed or adopted, by decision or by any other means, by the Shariah Supervisory Council, or Shariah Advisory Board an internal bank Islam Labuan or takaful operator, or a Shariah Advisor for any entity regulated under this Act, as the case may be;

"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;
Financial services and securities Islam Labuan 27 "securities" means any investment which is usually known or can be described as security, and includes — (a) shares, funds, units, interests in a partnership or limited partnership or limited liability company, trust or Foundation or a protected cell company or Corporation;

(b) Note for or issued by any body (incorporated or unincorporated), Government, local government or public authority; and (c) the certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant to apply for purchase or purchase any instrument described in paragraphs (a) and (b), which published considerably in compliance with Shariah principles, and includes Sukuk;

"payment system" means any system of arrangements for the transfer, the clearing or settlement of monies or securities, but does not include — (a) payment system established or operated by Bank Negara Malaysia or operated on behalf of Bank Negara Malaysia Central Bank of Malaysia Act 2009 [Act 701];

(b) the clearing center defined under the capital markets and Services Act 2007 [Act 671];

(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;
28 laws of Malaysia ACT 705 "subsidiary" shall have the meaning assigned to it in the companies act Labuan 1990;

"Sukuk" includes any certificate, instrument, notes and any evidence for payment obligations of a corporation, body (incorporated or unincorporated), Government, local government or public authority pursuant to any form of financing by Shariah principles, whether or not form a charge on the assets of the Corporation, the body (incorporated or unincorporated), Government, local government or public authority, but does not include — (a) any instrument which acknowledges 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 contract according to the ordinary course of business;

(b) a cheque, bank draft or any bills of Exchange or letter of credit;

(c) a bank note, guarantee or insurance policy;

(d) a statement, passbook or other documents showing any balance in current accounts, deposits or savings;

(e) any agreement for the loan or financing the lender or financial institution and the borrower or customer is signing the agreement and if the lending of money or financing that is in the ordinary course of business lender or financier, and any note issued under such agreement; and (f) any instrument or product or class of instrument or product as may be prescribed by the Board;

Financial services and securities Islam Labuan 29 "Labuan trust company" means a person licensed to carry on trust companies under the Financial Services Act and Labuan Securities 2010;

"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 the Secretary or other officer of the Association, organization or body is duly appointed 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;

"protected cell company" means a company incorporated, or converted into a protected cell companies in accordance with the provisions of Division VIIIB Of Labuan 1990 or similar entities 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;
30 laws of Malaysia ACT 705 "Foundation" means a foundation established under the Labuan Foundation 2010 [Act 706], part IX or other similar entities established under the laws of any country or jurisdiction recognized notwithstanding any statutory definition to the contrary;

"Labuan Islamic Foundation" means a foundation established under section 107.

(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 the "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.

(4) for the purposes of this Act, the Sukuk will not be formed trusts.


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, the exercise of any power, or perform any of its obligations under this Act.

(3) subject to such limitations, if any, as may be prescribed, an officer authorized shall perform all functions, exercise all the powers and perform all the financial services and securities Islam Labuan 31 obligations the Board as authorized and every function is executed, the powers and duties of such wishes shall be deemed to have been exercised, performed and met accordingly for the purposes of this Act.

(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, officers or principals, 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, 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, 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 32 laws of Malaysia ACT 705 (d) any other criteria set out in the guidelines issued by the Board.

(4) a person is obliged to give written notice to the Board, as soon as that can be, on any event material reasonably to expect will affect its status as a fit and proper person.

(5) If the Board is satisfied that any person is not fit and proper person, the Board may disqualifying the person from acting upon nature for licensed entities.


Business in, from or through Labuan 5. A person who is licensed to conduct any activity under this Act shall be carried out only in, from or through Labuan unless and except that a licensed entities may conduct the business in Malaysia outside Labuan as permitted by the Board from time to time: provided that nothing-nothing in this section shall authorize any entity licensed to carry out any activities regulated under the capital markets and Services Act 2007 , if the regulated activities carried out in Malaysia in addition to Labuan.


Compliance with Shariah principles 6. Any person who carries on any activity under this Act shall ensure that the activities are in compliance with Shariah principles.




Financial services and securities Islam Labuan 33 PART II SHARIAH SUPERVISORY COUNCIL the establishment of the Shariah Supervisory Council 7. (1) the Board may establish a Shariah Supervisory Council who shall be the authority for the determination of Islamic laws for the purpose of any business regulated or supervised by the Board.

(2) the Board shall have power to determine the terms of reference and functions of the Shariah Supervisory Council.

(3) the Shariah Supervisory Council may determine its own procedure.


Shariah Supervisory Council function 8. Shariah Supervisory Council shall have the following functions: (a) to determine the Islamic law for the purpose of any business regulated or supervised by the Board and issue a decision referred to it in accordance with section 9;

(b) to provide advice on any issue Shariah relating to any business regulated or supervised by the Board when referred to it in accordance with section 9; and (c) such other functions as may be determined by the Board.




34 the laws of Malaysia ACT 705 authority to make decisions and give advice 9. (1) a decision or advice shall be given by the Shariah Supervisory Council only when there is a reference made to him.

(2) for the purposes of subsection (1), the reference to Shariah Supervisory Council shall be made by the Board, a licensed entity, entity regulated under this Act or a Shariah-compliant entity in the manner determined by the Board.

(3) any decision issued by the Shariah Supervisory Council pursuant to a reference under subsection (1) shall be binding on the Board, licensed entities, entities regulated under this Act or Shariah-compliant entity, as the case may be.

(4) for the avoidance of doubt, any decisions made by the Shariah Supervisory Council under subsection (1) in accordance with the reference made by the Board, a licensed entity, an entity regulated under this Act or a Shariah-compliant entity, shall not be binding on any licensed entities, entities regulated under this Act or other Shariah non-compliant securities unless adopted by the Board in such manner as it thinks fit.

(5) if the advice given by the Shariah Supervisory Council pursuant to subsection (1), the Board, licensed entities, entities regulated under this Act or Shariah-compliant entity, as the case may be, shall take into consideration the advice.

(6) any reference to a decision or Shariah Supervisory Council under this Act or any other law shall be submitted to the Board.





Financial services and securities Islam Labuan 35 Shariah Supervisory Council Member Appointments 10. (1) the Board shall appoint a person qualified as a member of the Shariah Supervisory Council.

(2) the Board may, in addition to the members appointed pursuant to subsection (1), appoint a person who does not meet the requirements as persons eligible on qualifications and expertise in commercial law or Islamic jurisprudens Islamic but has knowledge or expertise in banking, finance, law, or any other related disciplines as Shariah Supervisory Council members.

(3) a member of the Shariah Supervisory Council shall be paid such remuneration and allowances as determined by the Board of the Fund Board.


The reference by the Court or arbitrator in deciding 11. (1) where in any proceedings relating to any business regulated or supervised by the Board before any court or arbitrator in Malaysia, any question arising on a matter of Shariah, the Court or arbitrator, as the case may be, shall be — (a) take into account any guidelines, instructions, advice, notice or circular issued by the Board in accordance with its powers under the Labuan Financial Services Act 1996; or (b) refer the question to the Council for Shariah Supervisory decision.

(2) any decision made by the Shariah Supervisory Council according to a reference made under paragraph (1) (b) shall, for the purpose of proceedings in respect of which 36 laws of Malaysia ACT 705 reference is made, taken into consideration by the Court or the arbitrator in reaching a decision.


PART III of the SECURITIES the securities Offer Chapter 1 Interpretation 12. In this section, 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 pay or repay any money received or receivable by it as a response to an offer made pursuant to this chapter to apply for purchase or purchase the Sukuk company;

"the company's guarantor", in respect of the borrower's company, means any corporation which has been guaranteeing, or has agreed to guarantee, the payment or repayment of any money received or receivable by the company of the borrower as a response to an offer made under this chapter to apply for purchase or purchase the Sukuk company 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 in connection, but shall not include any person who merely act upon his professional nature or on its properties as an advisor;

"Sukuk secured" means — financial services and securities Islam Labuan 37 (a) any Sukuk stated on his face as a Sukuk secured; and (b) any Sukuk issued on terms that gave the Sukuk holders rights and authority to vote and demand a poll in respect of business and undertaking of the company, whether in addition to the rights of members of the company or in lieu of any such right.


Offer or invitation requiring approval of the Board 13. (1) subject to subsection (2) to (7), 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 the purchase or purchase of securities or from in Labuan without — (a) the prior written approval of the Board; and (b) in relation to the Sukuk, endorsement of a Shariah under subsection (9).

(2) no offer or invitation to apply for the purchase of a Sukuk company Labuan or Labuan foreign companies, can be made to a resident of Malaysia, except by a licensee Islamic banks or bank unless the licensee permitted otherwise in writing by the Board.

(3) an applicant shall submit to the Board any document and any other information in connection with an 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 — 38 laws of Malaysia ACT 705 (a) approval of an offer or invitation with or without variation and subject to such terms and conditions as it thinks fit; or (b) refuse an offer or invitation.

(5) an offer or invitation following Sukuk are exempted from the requirement to obtain the approval of the Board of

advance 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 (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 Sukuk, if — (i) the first time every Member initial Sukuk is not 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 financial services and securities Islam Labuan 39 (ii) investment the first time every Member initial Sukuk was 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 membolehkanpenilaian a reasonable assessment of the offer or invitation;

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

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

(6) in addition to the exemption from the requirements for approval by the Board under subsection (5), an offer or invitation Sukuk under pèrenggan 5 (b) are exempt from the requirements for Shariah endorsement under subsection (9).

(7) sections 27, 28, 29, 30 and 31 shall not apply to an offer or invitation of securities under subsection (5).

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

(9) the Shariah Advisory Endorsement referred to in paragraph (1) (b) shall include verification of the Shariah that documentation, restructuring, investment and administrative matters and other operations in relation to the Sukuk was in compliance with Shariah principles.
40 laws of Malaysia ACT 705 (10) any person who contravenes 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.


False or misleading statement 14. (1) where any statement or information are required to be submitted to the Board in connection with any offer or invitation of securities submitted pursuant to section 13, an applicant or 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 deceptive or likely to mislead or deceive the Board.

(2) be a defense against a prosecution or any proceeding 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;

Financial services and securities Islam Labuan 41 (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 15. (1) no advertising offers, or exciting attention to an offer or bid for re, securities under subsection 13 (1), which is the offer of securities that are not exempted under subsection 13 (5), for publication until the ad is approved by the Board.

(2) an application for approval for an ad must be submitted to the Board together with a copy of the ads that are verified in such manner as the Board may direct.

(3) any person who publish or cause to be published 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 16. (1) 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.

42 laws of Malaysia ACT 705 (2) Notwithstanding subsection (1), the requirements under that subsection 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 13 (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 engelirukan in form and context of that statement are 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 Muslim seeking registration under section 36 or by their agents authorized in writing submitted to the Board on or before the date of its production;

(ii) the prospectus complies with the requirements of the Act turned out to be

or 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 not most likely to confuse someone who invest based on faith in the contents of the prospectus; and (iii) was also handed over to Board − (aa) in the case of a prospectus relating to public funds of Islam — financial services and securities Islam Labuan 43 (A) a certificate from a certifying that the prospectus complies with the requirements of part IV; and (B) 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 18 for the issuance of prospectus and any contract meterial 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.

44 the laws of Malaysia ACT 705 (5) in relation to a prospectus relating to public funds of Islam, 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 an Islamic public funds;

(b) contain a summary statement on the rights of the investor provided by section 41; and (c) if the Islamic public funds 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 the Islamic public funds which immediately before the date of the offer and the Auditors ' reports thereon.

(6) if any changes occur that affect materially any required so disclosed under subsection (5), or there is a material provision affecting the matter disclosed in the prospectus, the Fund Manager for the Islamic public funds or sponsors, shall within thirty days of the occurrence of the change include the changes in the prospectus relating to the Islamic public funds or offer pursuant to subsection 13 (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 or bank Islam and licensee shall be deemed to be a prospectus 17. (1) where a Corporation be apportioned or issue or agree to be apportioned or publish any financial services and Labuan securities 45 Islamic securities to any person in accordance with subsection 13 (1), which is an offer which is not exempted under subsection 13 (5), an offer or invitation of the securities shall be made by his agent, who shall be a Labuan trust company or bank licensee or licensee bank Islam.

(2) any document that through it the offer pursuant to subsection 13 (1) has been made, shall, for all purposes 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 pursuant to subsection 13 (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, of the 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 13 (1) if indicated — (a) that an offer of securities under subsection 13 (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 13 (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 46 laws of Malaysia ACT 705 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 in subsection (2) is signed on behalf of the Corporation by two directors of the Corporation and any such Director may authorise his agent in writing to sign on his behalf.

The agreement of the expert to issue a prospectus containing statement by him 18. (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 financial services and securities Islam Labuan 47 imprisonment for a term not exceeding three years or both of each.

Civil liability due to erroneous statement in the prospectus 19. (1) Notwithstanding any other written law, 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 — (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 having 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 to the prospectus issued.

(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 purporting 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 Sukuk Auditors, bankers, 48 laws of Malaysia ACT 705 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 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 thereunder, he, after realizing 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;

Financial services and securities Islam Labuan 49 (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 really reflects the statement is, or is a copy of the true and clean for 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 was credible to make it and that the experts have given the consent required by section 18 for the issuance of the prospectus and has not withdrawn such consent before a copy of the prospectus sent submit to registration or, in the knowledge that the 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 official officer or contained in what purports to be 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) shall not apply in the case of a person who is liable, because he has given the consent required from him by section 18 as a person who has allowed or cause production of a prospectus in respect of an untrue statement purporting to be made by him as an expert.
50 laws of Malaysia ACT 705 (5) any person other than this subsection would be liable under subsection (1), because he has given the consent required from him by section 18, 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 that — (a) after giving consent under section 18 of the prospectus production She had to withdraw that consent in writing before a copy of the prospectus submitted to the Board;

(b) after a copy of the prospectus and submission to the Board before publishing or sale under the prospectus, he, after realizing the untrue statement, was to withdraw consent in writing and gave reasonable public notice of the withdrawal and the reasons therefor; or (c) he is 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 did 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 financial services and securities Islam Labuan 51 (b) the consent of a person is required under section 18 for the production of prospectuses 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 an expert in the prospectus, 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 20. (1) where in any prospectus, or in any advertisement of the type referred to in section 15, 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 to both.

(2) a person shall not be liable under subsection (1) if he proves that the statement or ketidakdedahan is immaterial or that he had reasonable grounds to believe and have believed, until the time of production of the prospectus, that the statement was true or that ketidakdedahan is not material.

(3) a person shall not be deemed to have allow or cause the issuance of a prospectus simply 52 laws of Malaysia ACT 705 due he gave consent required by this section for admission a statement purporting to be made by him as an expert into the prospectus.


Labuan trust company bank licensee or licensee Islamic banks as agents for the offer of 21. (1) No allotment or publication of any of the securities of a corporation which offered under subsection 13 (1) which is the offer that are not exempted under subsection 13 (5), may be made unless the securities have been offered through a Labuan trust company bank licensee or licensee bank Islam.

(2) for the avoidance of doubt, a Labuan trust company bank licensee or licensee bank Islam shall be the agent of a corporation that offers securities pursuant to subsection 13 (1) via Labuan trust company bank licensee or licensees of the Islamic banks to accept applications for the issuance 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, bank licensee or licensee Islamic banks acting as an agent for the Corporation, and pending the receipt of the application of the minimum amount of purchase by Labuan trust company bank licensee or licensee bank Islam, it shall hold all moneys received by him on trust for the applicants , and if the amount of the minimum purchase applications are not accepted by the Labuan trust company bank licensee or licensees of the Islamic banks in the time set out in the prospectus, Labuan trust company bank licensee or licensee that Islamic banks 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 , a refund application for financial services and the 53 Labuan Islamic securities or any perkadarannya as 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 trust companies in Labuan, licensee or licensee Islamic banks acting as an agent for a Corporation receives a minimum amount of purchase applications on behalf of the Corporation, Labuan trust company bank licensee or licensee that Islamic banks shall, subject to the 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.


Prohibition of allotment unless minimum purchase application received 22. (1) No allotment or publication of any of the securities of a corporation which offered pursuant to subsection 13 (1) shall be made unless — (a) the application for purchase minimum has requested purchase; and (b) the amount of money payable on application security applied for 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 purchase Application — (a) is calculated based on the price at which the securities are offered or will be offered; and 54 laws of Malaysia ACT 705 (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 not be 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, securities 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 both.


Application money shall be held in trust until the publication or allotment 23. (1) subject to subsection 21 (3), (4) and subsection 22 (1), all the money of the application and other money paid prior to publication or allotment of any applicant for securities offered pursuant to subsection 13 (1) by a corporation, shall, until publication or allotment of securities is made, held in trust for the applicants and the money shall be paid into and held in a separate trust account , pending publication or the allotment.

(2) every officer of the Corporation who contravenes this section commits an offence and shall, on conviction, to a fine financial services and securities Islam Labuan 55 not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.


Chapter 2 the Sukuk authorized to issue the Sukuk 24. (1) subject to this section and the terms and conditions of the memorandum and perkaranya, a company of Labuan shall have authority to issue the Sukuk on such terms and conditions as he may think fit and in particular, but without limiting the generality of the aforesaid, can publish the following: (a) a Sukuk which become charge on any or all of the assets of the company;

(b) a Sukuk which can be converted to shares in the company; or (c) a secured Sukuk.

(2) the amount payable under any Sukuk, whether sealed or signed on behalf of the company, shall be a special debts of the company, and if the Sukuk 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 a Sukuk convertible into shares;

56 laws of Malaysia ACT 705 (b) prescribing the terms and conditions or events or events with which conversion to be or can be done.


Trustee for holders of Sukuk 25. (1) every company Sukuk offering Labuan pursuant to subsection 13 (1) shall make provision in the Sukuk, or in a trust deed relating to the Sukuk, for the appointment of a Labuan trust company as trustee for holders of Sukuk.

(2) a company borrower cannot be apportioned any Sukuk until a Labuan trust company was appointed as a trustee for holders of the Sukuk.

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

(4) a borrower's company and every officer of the company of the borrower that 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.


Waiver and indemnity for holders of the Sukuk trustee from liability 26. (1) subject to this section, the terms, provisions or covenants a Sukuk or deed a contract terms with holders of the Sukuk was guaranteed by a trust deed shall be invalid in so far as the terms, provisions or covenants, as the case may be, will have effects — financial services and securities Islam Labuan 57 (a) exclude the trustee for holders of Sukuk 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 person trustee for holders of Sukuk against 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, unless the terms, provisions or covenants that — (A) discharge the trustee from liability because of anything done or omitted to be done before the release of the given;
or (B) allow a shareholders ' meeting to approve the release of the Sukuk trustee from liability because of anything done or omitted to be done before the release of the given.

(2) for the purposes of paragraph (1) (B) — (a) a release approved if holders of Sukuk who voted for a resolution that holds as many as seventy-five percent of the nominal value of Sukuk held by all holders of the Sukuk was present at the meeting and to vote on such a resolution; and (b) a holder of a Sukuk was present at the meeting and to vote on the resolution if — 58 laws of Malaysia ACT 705 (i) holders of the Sukuk be personally present at the meeting and to vote on such a resolution;
or (ii) If a proxy is allowed, the Sukuk holders are represented at the meeting by a proxy and the proxy vote to the ruling.


The duty of the trustee for holders of Sukuk 27. (1) the trustee for holders of Sukuk — (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 will be available by way of the Sukuk or otherwise, sufficient, or is likely to be or become liable to pay the principal amount Sukuk as and when the debt is payable;

(b) shall be to his satisfaction that every prospectus relating to the Sukuk does not contain any item that is not in accordance with the terms of the Sukuk or by a 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 Covenants, terms and provisions of Sukuk or the trust deed;

(d) unless it is satisfied that the breach of the Covenants, terms and provisions of the Sukuk or the trust deed will not materially prejudice the security, if any, for the Sukuk or interests of the Sukuk, shall take all steps and do all things it is authorised financial services and securities Islam Labuan 59 to do to cause the company the borrower and any guarantor meremedikan any breach of the Covenants , the terms and provisions thereof;

(e) if the company of the borrower or any guarantor, when required by the trustee, not meremedikan any breach of

covenants, terms and provisions of the Sukuk or the trust deed, shall present the matter at meetings of the holders of the Sukuk, produce any proposals to protect their investments as may be deemed necessary and appropriate by the trustee and the Sukuk holder instructions thereto; and (f) if the borrower's company submit to holders of Sukuk is a compromise or arrangement, shall give to 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 Sukuk 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 may not be enough to explain the principal amount Sukuk as they become due, 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 an 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 deposit or loan and lending by about 60 laws of Malaysia ACT 705 company borrower that , as may be deemed necessary by the Board to protect the interests of holders of Sukuk, or the Board may, and if the lenders require such company shall, direct the trustee for holders of the Sukuk to submit an application to the Court for an order under subsection (4) and trustee for holders of the Sukuk shall apply accordingly.

(3) where — (a) after reasonable investigation, trustee for holders of Sukuk 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 principal amount Sukuk as they become due; or (b) the borrower has violated company or fails to comply with a direction made by the Board under subsection (2), trustee for holders of the Sukuk can be, and if the borrower company has requested trustee for holders of Sukuk do so, trustee for holders of the Sukuk, apply to the Court for an order under subsection (4).

(4) where an application is submitted by the trustee for holders of Sukuk 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, namely: (a) order the trustee for holders of Sukuk so call a shareholders ' meeting for the purpose of presenting the Sukuk before them any information relating to the importance of financial services and securities Islam Labuan 61 they , as may be deemed necessary or appropriate by the trustee for holders of the Sukuk and for the purpose of getting their instructions thereto, and to provide any direction in relation to the conduct of the meeting as the Court may think fit;

(b) suspend all or any such action or proceeding before any court by or against the company of the borrower;

(c) prevent the payment of any money by the company to holders of Sukuk borrower the borrower the company or to any class of the holder;

(d) appoint a receiver of any property that is collateral, if any, for the Sukuk or any part thereof; or (e) provide any further instructions from time to time as may be necessary to protect the interests of holders of the Sukuk, a member company of the borrower or any guarantor or the public, but the making of any such order, the Court shall pay attention to 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 for holders of Sukuk in making any application to the Board or the Court, shall take into account the nature and type of collateral given during the Sukuk offered pursuant to subsection 13 (1), and, if there is no collateral given, shall take into account the position of the 62 laws of Malaysia ACT 705 Sukuk holders as unsecured creditors of the borrower company.

(7) a trustee for holders of the Sukuk can depend on any certification, report given or statement made by any advocate, auditor or officers of the company or the guarantor of the borrower company if the trustee for holders of the Sukuk has reasonable grounds to believe that the advocate, auditor or the officer was competent to give or make recommendations, reports or the statement.


Obligations of the directors of the borrower is 28. (1) the directors of the borrower shall — (a) at the end of a period not exceeding three months ended yesterday — (i) that is not later than the date of the relevant prospectus, if applicable; or (ii) the date of the Sukuk issued pursuant to a deed of trust which is trustee for holders of Sukuk company borrowers are required to notify the company of the borrower in writing; and (b) at the end of each subsequent period afterwards, which is a period of three months or any shorter time as may be allowed by the trustee for holders of the Sukuk in such special circumstances, provide a report related to that period and comply with the requirements of subsection (3) and, within thirty days after the end of each such period , submit a copy of the financial services and securities Islam Labuan 63 reports relating to that period to the Board and to the trustee.

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

(3) the report referred to in subsection (1) shall

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 Sukuk 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 perform all the Covenants and provisions governing their respective through or according to Sukuk or any deed;

(c) whether or not any event has occurred which causes or may cause Sukuk or any provision of the relevant trust deed becomes enforceable and, if so, details of the incident;

(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 Sukuk or any 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 64 laws of Malaysia ACT 705 or any of its subsidiaries or any guarantor since the first Sukuk issued pursuant to subsection 13 (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 during 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 the Corporation has been guaranteeing payment of the borrower company Sukuk and the guarantee has secured by a charge on its assets for the benefit of the trustee for holders of the Sukuk company borrower.

(4) if there is a trustee for holders of such Sukuk issued by a company of the borrower, the borrower companies and each company sureties have guarantee the financial services and securities Islam Labuan 65 reimbursement money has been diperdapatkan through the issuance of Sukuk shall, within twenty-one days after the creation of the charge, giving the Trustees on behalf of the Sukuk holders , whether or not any claim shall have been made, details of writing of any charge created by the Corporation or its guarantor, as the needs of the situation, and if 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 Payables , is sufficient for details of the net amount outstanding in respect of any advances is given every three months.

(5) every Director of the company that has issued the Sukuk borrower pursuant to subsection 13 (1), does not include the issuance of Sukuk under subsection 13 (5), and Director of every company guarantor who have guarantee the repayment of money that diperdapatkan through the issuance of Sukuk 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 companies , cause to be made and delivered to the Board and to the trustee of a profit and loss account together with a detailed statement about the outstanding liability under the Sukuk 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.

(6) if any company 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 relevant period, it shall be sufficient compliance with the requirements of subsection (5) If, with the consent of the trustee for holders of the Sukuk , submitted to the Board and trustee for holders of the Sukuk 66 copies of laws of Malaysia ACT 705 certified profit and loss account and the balance sheet submitted the same.

(7) If a Director of a company borrower does not deliver to the trustee for holders of Sukuk a report required by subsection (1), or if a Director of a company of the borrower or the guarantor of the company does not deliver to the Board and trustee for holders of Sukuk profit and loss account, detailed statement and balance sheet as required by subsection (5) within the time specified the , trustee for holders of the Sukuk shall, as soon as possible, lodge notice of that fact to the Board.

(8) any person who contravenes subsection (5) commits an offence and shall, on conviction, to a fine not exceeding ten thousand ringgit.


The company's obligation of the guarantor to provide information 29. (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 company the guarantor to provide him any information relating to the company's guarantor is required by this Act so contained in the report, and

the guarantor shall give the company the information to the borrower before a date, being the date on which not less than fourteen days after the notice is given, as specified in that behalf in the notice.

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

Financial services and securities Islam Labuan 67 Money shall be payable immediately upon the occurrence of certain 30. (1) where in any prospectus issued in connection with an offer or invitation pursuant to subsection 13 (1) to apply for a purchase or buy Sukuk 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 that you want to use, the company of the borrower shall from time to time report to the trustee for holders of the Sukuk company borrower of the progress that has been made towards achieving the that purpose or complete the project.

(2) if it appears on a person's trustee for holders of Sukuk 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 specified, then within a reasonable time, trustee for holders of the Sukuk can be , and, if in its opinion it is necessary to protect the interests of holders of the Sukuk, trustee for holders of the Sukuk shall give notice to the company that requires it to pay the money the borrower received the company of the borrower so desires and, within one month after notice is given, submit a copy of the notice to the Board.

(3) the trustee for holders of the Sukuk can not give notice in accordance with subsection (2) if it is satisfied that — (a) the purpose or project has been largely achieved or completed;

(b) the importance of the Sukuk holders have not materially termudarat by failure to achieve or complete the project or purpose within 68 laws of Malaysia ACT 705 stated in the prospectus or in reasonable time; or (c) 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 reasonably could not be predicted by the company of the borrower at the time the prospectus was issued.


The detention of the Sukuk issue terpohon buy excess 31. (1) a company borrower cannot accept or resist the application buy to issue the Sukuk issue exceeding the amount as disclosed in the prospectus unless the borrower company expressed in the prospectus that — (a) that the company expressly reserves the right to accept or resist terpohon buy the excess;
and (b) a limit on the amount terpohon buy an excessive amount of acceptable or detained.

(2) subject to any regulations, if a company borrower stated in a prospectus relating an issuance of Sukuk that it reserves the right to accept or resist 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 financial services and securities Islam Labuan 69 (b) the prospectus shall contain a statement or references about the total assets and total liabilities of the company of the borrower if terpohon buy excess limit determined 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 IV ISLAMIC MUTUAL FUNDS Chapter 1 the beginning of Interpretation 32. In this section, unless the context otherwise requires — "investor" means a person, including the guardian and underwriters, who is the owner of securities issued by an Islamic mutual funds but does not include a person who took the initiative to form or organize Islamic mutual funds business and does not have any ownership in the Fund;

"operator", in respect of a Islamic mutual funds, means — (a) if the Islamic mutual funds is a corporation, a Director of the Corporation;
(b) if the Islamic mutual funds is a limited partnership, a general partner in the limited partnership;
(c) if the Islamic mutual funds is a limited liability partnership, partner specified in the limited liability partnership; or 70 laws of Malaysia ACT 705 (d) if the Islamic 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 an Islamic mutual funds business, but does not include a guardian or Underwriters who receive commissions underwriting without taking part in the establishment of the organization or business that Islamic mutual funds;

"public funds Islamic berdaftarkan" means an Islamic public funds registered under section 38;

"share" means a share or more in the share capital of a company of Islamic 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 an Islamic mutual funds shares in trust Islamic mutual funds.

Chapter 2 private Funds by private funds Islamic Notification Islam 33. A private Islamic Fund reserves the right to conduct business, organize or administer its affairs in Labuan by giving written notice to the Board stating the details of the scope and type of business.


Islamic private funds shall deliver information memorandum or other document


34. (1) A private fund Islam shall deliver information memorandum or any other offer documents relating to private funds purporting to be the Islamic finance and Islamic securities Labuan 71 describes the business and Affairs of private funds to the Muslim Board.

(2) Information Memorandum or other document referred to in subsection (1) shall be submitted by a private Islamic funds through any entity licensed to be reasonably satisfied that — (a) information memorandum or other document submitted that refers to a private fund Islam defined under this Act;
and (b) there are no instances of fraud involved in the establishment of the Islamic private funds.

(3) an information memorandum or other document submitted by a private fund Islam shall be deemed to be a prospectus in so far as it relates to the liability of private fund Islam for any statement or information that is false or misleading or that of which there is a material omission.

(4) where the information memorandum or other document under subsection (1) is accepted, the Board shall be recorded the particulars of the information memorandum or other document in the register maintained pursuant to Chapter 6 of this part.


Waiving liability for error or omission in the information memorandum or other document 35. If an information memorandum or other document submitted by private funds Islamic to the Board under section 34, either the Board or any of his officers or employees shall not be liable for any loss or damage suffered by any person by reason of any mistake, error or omission statement whatever kind of found it.
72 the laws of Malaysia ACT 705 Chapter 3 public funds Islamic Funds Islamic public shall be registered 36. (1) no public funds Muslim can do the business, arrange or administer its affairs in Labuan unless it has been granted registration under paragraph 38 (1) (a).

(2) subject to subsection (3), no public funds proposed Islamic can do the business, arrange or administer its affairs unless it has been granted conditional acceptance under paragraph 38 (1) (b).

(3) an Islamic public funds proposed for which a conditional acceptance has been granted under paragraph 38 (1) (b) should not be doing business, arrange or administer its affairs without the Board's written consent in advance.


Application by public funds Islamic 37. (1) an application to the Board under subsection 36(1) or (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 is established with valid under the laws of Malaysia relating to the Labuan or under the law of any country or jurisdiction is recognised;
Financial services and securities Islam Labuan 73 (c) a statement of the following: (i) the address of applicant's place of business and his address for service relating to the Labuan;

(ii) the name and address of a person in Labuan authorized to represent the applicant to accept delivery and on its behalf;

(iii) the address of applicant's place of business outside Labuan; and (iv) the name, address and relevant experience Director of Islamic funds;

(d) a declaration signed by the directors of an Islamic Fund applying on various confidential and secret; and (e) if applicable, a copy of the prospectus, whether in the form of a draft or final, of the Muslim public.

(2) public funds Muslim or Islamic 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 such information as determined by the Board under subsection (1), the applicant, having allowed registration or conditional acceptance, as the case may be, shall, within thirty days after the change occurs submit to the Board a notice specifying those changes.


Power to allow or refuse to allow the registration of public funds of Islam 38. (1) the Board may allow or refuse to allow — 74 laws of Malaysia ACT 705 (a) registration of an Islamic public funds; or (b) conditional acceptance of a proposed Islamic public funds.

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

(3) a conditional acceptance under paragraph (1) (b) shall be valid and effective for a period not exceeding six months from the date it is given.

(4) a conditional acceptance may be renewed for a period not exceeding three months when the application is made to the Board and accompanied by any documents or information as may be required by the Board.

(5) Notwithstanding the conditional acceptance under paragraph (1) (b) to an Islamic public fund proposed, the Board may allow the registration of public funds of a proposed Islamic as an Islamic public funds under paragraph (1) (a).


39. registration procedure (1) if the Board allows the registration of an Islamic public funds under paragraph 38 (1) (a), the Board shall — (a) register the Islamic public fund in the register maintained under Chapter 6 of this part; and (b) issue a certificate of registration to the public funds the Islam.

(2) if the Board allows the conditional acceptance under paragraph 38 (1) (b), the Islamic public fund sponsors a proposed shall, before the expiry of the conditional acceptance or financial services and Labuan Islamic securities acceptance period conditional 75 renewed it sends to the Board — (a) conditional acceptance from the Board;

(b) evidence to the satisfaction of the Board that the proposed public funds the Islam was established in Labuan or any country or jurisdiction is recognised; and (c) the information referred to in subsection 37 (1).

(3) where the Board is satisfied that the proposed Islamic public funds referred to in subsection (2) has complied with the

the requirements of that subsection, the Board may authorize the registration of public funds the Islam.

(4) If the Board allows the registration under subsection (3), the Board shall register the Islamic public fund in the register maintained under Chapter 6 of this section and issue a certificate of registration.


The prospectus relating to the Islamic public funds 40. (1) no public funds can, in Muslim registered within or outside Labuan, make an offer of securities unless before the offer is made, it has submitted a prospectus to the Board in accordance with the requirements of the prospectus under section 16.

(2) for the avoidance of doubt, civil and criminal liability for erroneous statements in the prospectus provided under sections 19 and 20 shall apply also for the prospectus submitted under this section.





76 laws of Malaysia ACT 705 41 investors Rights. (1) where a registered public Islamic Fund publish a prospectus or any amendment that contains any misstatements relating to any matters that are required to be disclosed under subsection 16 (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 – (a) for the purchase of cancellation; or (b) for damages, in association or separate public funds against Islam 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 matters that are required to be disclosed under subsection (1); or (b) an omission to disclose any of that matter.

(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.

Financial services and securities Islam Labuan 77 (5) the right of action for cancellation or damages conferred by subsection (2) is in addition to any other rights which belong to the aggrieved party under any written law.


Limitations of 42. Notwithstanding any other written law to the contrary, any action under subsection 41 (2) shall not be instituted after — (a) one hundred and eighty days from the day the aggrieved the first aware of the misrepresentation; or (b) one year from the date of purchase transactions that raise cause the action, whichever is earlier.


Certificate of conformity 43. Every Islamic 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.


Public funds foreign Islamic can be managed or administered in Labuan 44. An Islamic public funds registered with valid under the law of any country or jurisdiction of other recognized 78 laws of Malaysia ACT 705 need not be registered as Islamic public funds under section 38 of the public funds as long as Islam is governed or managed in Labuan by a Fund Administrator, guardian, trustee or the Fund Manager, which is licensed, registered or eligible under this section.


Chapter 4 fund managers and fund managers Fund Administrator or an administrator of funds for Islamic public fund 45. (1) No person shall do business as fund managers an Islamic public funds unless such person is — (a) a person who is included in subsection 40 (1) or (2) of the financial services and securities Labuan 2010 and has acquired a Board approval in advance; or (b) the Islamic banks.

(2) No person shall do business as an administrator of public funds Islamic unless that person is — (a) a person who is included in subsection 41 (1) or (2) financial services and Securities Act of Labuan 2010 and has acquired a Board approval in advance;

(b) licensee Islamic banks; or (c) licensee of Islamic securities under part V.

(3) a Fund Manager or an administrator of the respective funds to carry out fund management activities or financial services administrator and Labuan Islamic securities funds in respect of funds 79 private Islam-only is not required to be licensed under this section.


Obligations of the Fund managers and fund administrator for Islamic public fund 46. Someone fund managers or administrators of public funds and his officers shall, in carrying out its powers and duties they are — (a) act honestly;

(b) use and prudent level efforts reasonably expected at someone in the position;

(c) to act in the interest of investors in public funds and, if there is a conflict between the interests of investors with their own interests, giving priority to the interests of the investors;

(d) treat investors who hold the interest of the same class equally and attendees who hold the interests of different classes with justice;

(e) shall not use information obtained through his position as fund managers, fund administrators or officers to make — (i) improper advantage for themselves or others; or (ii) cause harm to investors in public funds Islamic;

80 laws of Malaysia ACT 705 (f) ensure that all payments from the public fund assets made to document Islamic constituents public funds the Islam, this Act and any regulations;

(g) report to the Board, as soon as that can be carried out after she aware of any infringement of — (i) this Act and any regulations; or


(ii) constituent documents the public fund Islamic causes, or is likely to cause harmful effects, materially to the interests of investors; 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 and the administrator funds under applicable law 47. Obligations of the Fund managers and the administrator of the funds allocated under this chapter are in addition to and does not reduce the obligation otherwise imposed on them by any applicable law.


Specific obligations for public fund managers Fund Islamic 48. (1) a fund manager shall Islamic public funds — (a) ensure that a written agreement is made with each customer before a transaction carried out on behalf of clients;

Financial services and securities Islam Labuan 81 (b) understand the investment objective, direction, investment restrictions and risk profile of each client, if applicable, which shall be assessed 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, investment restrictions, risk profile and instructions for customers;

(b) notification of any significant changes to the investment policy or recommendation of investment;

(c) methods and how to make reports to the customer;

(d) authorisation clearly on management discretion;

82 the laws of Malaysia ACT 705 (e) 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 practicing acceptance, easy Commission;

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

(3) the 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.


The obligation to set aside 49 customers assets. (1) the Fund Manager for Islamic 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 such other day as may be determined by the Board, following from the day that the Fund Manager receives the customers assets.

(2) if the assets of the customer required by this section in order to be deposited into a trust account received by the Fund managers at a place outside Malaysia, the Fund Manager may deposit the 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 financial service manager and Labuan Islamic securities funds, 83 and shall be marked in the book fund managers in relation to each customer account, so that the money, property or other valuable consideration, it is not at any time been forms 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 that trust for which the investment belongs can available to identified at any time.

(4) customer Assets held in a trust account shall not be used for the payment of the liabilities of the Fund Manager or be paid or taken in execution under an order or court process for the payment of the liabilities of the 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.


Chapter 5 the trustee or custodian trustee or guardian Qualifications public funds Islam 50. (1) No person shall do business as trustee of a fund Islamic public unless that person is Labuan trust companies.

84 laws of Malaysia ACT 705 (2) No person shall do business as guardian of an Islamic public funds unless such person is the holder of a licence bank, bank Islam, licensee or a Labuan trust company, provided that licensee shall obtain the approval of the bank Board in advance.

(3) this section shall not apply to someone who is and continues to be a trustee or guardian of public funds qualified and authorised under any country or jurisdiction is recognised and has received permission from the Board to conduct business as trustee or guardian of an Islamic public funds.


Duty of trustee or custodian and Director under applicable law 51. The duty of the trustee or custodian of the Fund and its directors provided under this chapter are in addition to and does not reduce the obligation otherwise imposed on them by any applicable law.


Obligation of the Fund Manager, custodian or trustee to act independent of each other 52. (1) a Fund Manager, custodian or trustee,

an Islamic public funds — (a) must be different people and act independent of each other;

(b) shall not a corporation related to the other; and (c) shall have no Executive Director or other officer of the same.

Financial services and securities Islam Labuan 85 (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.


Chapter 6 Accounting Express check and 53. (1) the Board may keep separate registers for — (a) the Islamic private funds;

(b) public funds Islamic; and (c) the Fund managers and fund administrator for public funds of Islam.

(2) the register required under subsection (1) may consist of — (a) information required in respect of each person who has been granted a licence or registration permitted or which have 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 required to be kept pursuant to this section shall be in such form as may be determined by the Board.

86 the laws of Malaysia ACT 705 (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 is licensed, registered or provided written authorization under this section.


Accounts and audit 54. (1) every registered public funds Islamic shall — (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;

(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 as may be prescribed in writing by the Board;

(d) within three months from the end of each financial year submit to an auditor of the financial statements referred to in paragraph (a) of the financial services and securities Islam Labuan 87 and any records and other information that is required for an audit in accordance with generally accepted auditing principles applicable in Malaysia or in 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 auditor's report about it.

(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 of Islam together with the accounting records and the financial statements.


Part V the LICENSING of MARKET INTERMEDIARIES Chapter 1 Preliminary interpretation of 55. In this section, unless the context otherwise requires, "Islamic securities licensee" means a person, who for valuable consideration, provides investment advice or administrative service in respect of securities for the purpose of investment, including dealing in securities or any other activities as determined by the Board, that complies with Shariah principles in Labuan.


88 the laws of Malaysia ACT 705 Chapter 2 licensee Islamic securities licensees of Islamic securities 56. (1) No person shall do business as a licensee of Islamic securities unless such person is a Labuan company that has been granted a licence to act as a licensee of Islamic securities under this section.

(2) Notwithstanding subsection (1), the following person can conduct business as a licensee of Islamic securities: (a) any person referred to in subsection 55 (1) and (2) financial services and Securities Act of Labuan 2010 and obtained Board approval in advance; and (b) licensee bank Islam.


Application for licence 57. (1) an application to the Board to conduct business as a licensee of Islamic securities under this section shall be made in writing by or on behalf of the applicant to the Board.

(2) an application for a licence shall be — (a) made in such form as may be determined by the Board; and (b) accompanied by — financial services and securities Islam Labuan 89 (i) application fee as may be prescribed;

(ii) details of the human and financial resources and of General facilities available to the applicant for the integrity and efficiency of the conduct of its business;

(iii) a statement of the following: (aa) the address of applicant's place of business and his address for service relating to the Labuan;

(ab) the name and address of a person in Labuan authorized to represent the applicant and to accept delivery on his behalf; and (ac) the address of applicant's place of business outside Labuan;

(iv) a statement which means that the applicant has declared its compliance with * Act anti-money laundering and anti-terrorism financing Act 2001 [Act 613] and shall ensure that it is updating the policy and tatacaranya periodically to conform to his will; and (v) any other information or documents as may be reasonably required by the Board for the purpose of deciding the application.

* NOTE — previously referred to as Act anti-money laundering and anti-terrorism financing Act 2001. Short title changed by section 3 of the Act anti-money laundering and anti-terrorism financing (Amendment) 2014 [Act A1467] come into operation on 1 September 2014 – see P.U. (B) 400/2014.

90 laws of Malaysia ACT 705 Power to allow or reject the application for licence 58. (1) upon receipt of an application under section 57, 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 within Islamic effect the license.

Form of licence 59. A licence granted under this part shall — (a) in such form as may be determined;
(b) specify any terms, conditions, restrictions or limitations;
(c) remain in force until the licence is cancelled; and (d) can be received in all courts as prima facie evidence of the facts stated therein.

LABUAN ISLAMIC BANKING PART VI Chapter 1 Preliminary interpretation of 60. In this section, unless the context otherwise requires — financial services and securities Islam Labuan 91 "deposit" means an amount of money received or paid on terms that conform with Shariah principles — (a) under which it is payable or repayable, with or without profit or at a premium or discount; or (b) under which it is payable or refundable, whether in whole or in part, with any replies in the form of money or that can be measured with money, and payment or reimbursement that is either on request 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 described as financing, advance, investment, savings, sale or sale and repurchase, but does not include money paid by bona fide — (A) by way of advance payment or part under a contract for the sale, rental or provision of property or other services, and may be reimbursed only in respect of property or services that are not or in fact not sold , rented or otherwise provided;

(B) by way of a guarantee for the implementation of a contract or by way of a guarantee in respect of losses that may occur as a result of ketaklaksanaan a contract;

(C) without prejudice to paragraph (B), by way of guarantee for the delivery or return of any property, whether in a State of repair or otherwise; and (D) in any other circumstances, or to or by others, as determined by the Board;
92 the laws of Malaysia ACT 705 "Islamic construction credit business" means a business that provide financing facilities that comply with Shariah principles to any person for the purpose of real purchase of immovable property, or the construction, reconstruction or renovation of any building or other structure, for the purpose of residential, commercial or industry;

"commodity derivative instruments Islam" including, in so far as the instrument is not a derivative financial instrument, commodity futures, commodity future, commodity swaps, commodity options, that conform with Shariah principles, or instrument other commodities that have similar features, which reasonably can be solved with cash or securities or other derivative instrument;

"business sign of Islamic debt" means any business that complies with Shariah principles, which is 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 manufacturer undertakes that — (a) upon issuance of the marks, whether or not an other actions are also required to the manufacturer shall supply, cash, goods or services in credit; or (b) If, upon the production of signs to third parties, whether or not any other actions are also required to, third parties that provide goods, cash or services, the issuer will pay a third party for cash, goods or services provided that, whether or not by subtracting any discounts or commissions, in return for payments to be made thereafter to the producer by the customer , financial services and securities Islam Labuan 93 and for the purposes of this definition, the use of sign to operate a machine provided by the manufacturer or a third party shall be treated as withdrawal of the sign to the person who set up the machine;

"financial instruments Islamic issue" means the futures, forward, swap, or options that comply with Shariah principles, or other financial instruments that have similar features, but does not include — (a) all balance sheet receivables and payable, including acquiring its value or on a contract basis requires cash flow from the price of a guarantee or other indices, such as mortgage-backed guarantee , only the principal obligations and profit only, and are indexed debt instruments, which comply with Shariah principles; and (b) features option which is in balance-sheet receivables or can be paid, such as the conversion feature and the call which is in convertible Sukuk, which comply with Shariah principles;

"the Islamic issue instrument" means an instrument which its value depends on the value of the policy direction or assets such as currency, securities, commodities or other derivative instrument, that conform with Shariah principles and include a Muslim issue financial instruments and derivative commodity instruments of Islam;

"the Islamic Development finance business" means a business that provides capital or other financing facilities, that conform with Shariah principles, on terms that requires it is used for the development of industrial, agricultural, commercial or other economic; and for the purposes of this definition, "development" includes the beginning any venture industry, agriculture,

commercial or other economic ventures or new developments or progress of any existing ventures;

94 laws of Malaysia ACT 705 "Islamic factoring business" means the business of acquiring debt due to any person who in compliance with Shariah principles;

"Islamic finance" means — (a) any advances, financing or other facilities in whatever form or by whatever name called that conform with Shariah principles, by giving to the person to whom the advance, financing or other facilities provided have access, directly or indirectly, to those who provide funds, advance financing or other facilities; or (b) any liability whatsoever incurred on behalf of any person, that conform with Shariah principles;

"Islamic leasing business" means a business or small rental property on rent use that comply with Shariah principles, for the purpose of use of the property by the tenant use, regardless of whether the rental was with or without an option to buy the property, including the pencarteran ships, and for the purposes of this definition, "property" includes any plant, machinery, equipment or other attached or catel will stick on the face of the Earth , and "pencarteran ship" means the pencarteran the boat empty and did not include the transportation of passengers or cargo via sea or pencarteran ship on a voyage or time Charter;

"Islamic money brokerage business" means a business that arranges transactions between buyers with sellers in the money market or foreign exchange as the intermediary brokerage fee paid or payable as a reward and that comply with Shariah principles, but does not include the purchase or sale of foreign currency or dollars as principal in the market;


Financial services and securities Islam Labuan 95 "Labuan Islamic banking business" means — (a) deposit-taking business on current accounts, deposit accounts, savings account or any other account that conform with Shariah principles as determined by the Board;

(b) Labuan Islamic investment banking business;

(c) Labuan Islamic finance business; or (d) any other business as may be determined by the Board, with the approval of the Minister, in any currency (including dollars if allowed by * the Exchange Control Act 1953 [Act 17] or any other related laws in force);

"Labuan Islamic financial business" means any of the following businesses that comply with Shariah principles: (a) business credit construction of Islam;

(b) a business sign of Islamic debt;

(c) the Islamic Development finance business;

(d) Islamic leasing business;

(e) Islamic factoring business;

(f) Islamic money brokerage business; or (g) any other business as 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 of the Act 758.

96 laws of Malaysia ACT 705 carried out in any currency (including dollars if allowed by * the Exchange Control Act 1953 or any other related laws and regulations in force) and does not include any transaction pursuant to a financing scheme approved by the Board as the scheme comply with Shariah principles, which according to the transaction are required to strictly for the purpose of compliance according to the financing scheme but that is not to be required for any other financing scheme;

"Labuan Islamic investment banking business" means any of the following businesses: (a) provide financing facilities that comply with Shariah principles;

(b) provide advisory and consultancy services relating to corporate and investment matters, including dealing in securities, or manufacturing and investment management, on behalf of any person, that conform with Shariah principles;

(c) conducting foreign exchange transactions, profit rate swap, transacts derivative instruments in Islamic or Islamic derivative financial instruments that conform with Shariah principles or any similar risk management activities another;

(d) Labuan Islamic finance business; or (e) any other business as may be determined by the Board, with the approval of the Minister, in any currency (including dollars if allowed by * the Exchange Control Act 1953 or any other related laws in force);
* NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 of the Act 758. * NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 of the Act 758.
Financial services and securities Islam Labuan 97 "Labuan Islamic licensed institution" means a person licensed to carry on the Labuan Islamic finance business under part VI;

"paid-up capital", in respect of applications under section 63, 64 and 65 or licensee Islamic banks, means the amount of money dicarum by the members to enable it to conduct business but does not include financing facilities conferred upon him by the members.


Chapter 2 Licensing Islamic banking business of Labuan Labuan Islamic banking business shall be carried out only under the 61. (1) subject to subsection (2), no person shall carry on the Islamic banking business of Labuan in addition to Islamic investment banking business of Labuan unless — (a) it is a company or foreign company Labuan Labuan, established or registered for the purpose of solely and exclusively to conduct Islamic banking business of Labuan in any location approved by the Board;
or (b) it is a Malaysian bank, and holds a valid license to run the business.

(2) subsection (1) shall not apply to bank Labuan unless bank Labuan obtain Board approval in advance to conduct Islamic banking business of Labuan.
98 laws of Malaysia ACT 705 (3) any person who contravenes subsection (1) commits an offence and shall, on conviction, liable 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, may, in addition, a daily fine not exceeding ten thousand dollars for each day the offence continues to do.


Labuan Islamic investment banking business shall be carried out only under licence 62. (1) subject to subsection (2), no person shall carry on the business of Labuan Islamic investment banking unless — (a) it is a company or foreign company Labuan Labuan, established or registered for the purpose of solely and exclusively running Islamic investment banking business of Labuan only at any location approved by the Board; or (b) it is a Malaysian bank, and holds a valid license to run the business.

(2) subsection (1) shall not apply to the holder of a licence bank unless the bank licensees obtain Board approval in advance to carry out Islamic investment banking business of Labuan.

(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, may, in addition, a daily fine not exceeding ten thousand dollars for each day the offence continues to do.
Financial services and securities Islam Labuan 99 Application for a license to carry out banking business Islam Labuan 63. (1) an application for a licence to conduct Islamic banking business of Labuan shall be made in writing by or on behalf of the applicant to the Board.

(2) an application for a licence to conduct Islamic banking business of Labuan by a Labuan company shall be accompanied by the following: (a) the applicant's constituent document certified accordingly by the applicant in such manner as may be 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 one-man holds ten percent of paid-up capital or more;

(c) a statement regarding the name, address, qualifications, work experience and positions proposed for all officers to be responsible for the management of the Islamic banking business of Labuan Labuan applicants;

(d) a proposed amendment to the constituent documents of the applicant that the effect is more than just purpose and exclusive company Labuan is the Islamic banking business of Labuan;

(e) if the applicant is a company off — 100 laws of Malaysia ACT 705 (i) is a subsidiary of a holding company, a copy of balance sheet for the company's business holder for every three financial year immediately before the date of the application;

(ii) is not a subsidiary 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 Islamic banking business Labuannya, in such manner and form as may be accepted by 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 with respect to Islamic banking business Labuannya;

(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; and (iii) every Director or officer of the principal applicant who is responsible for the management of Islamic banking business Labuannya must be a fit and proper person and appointment of Director or principal officer shall be made only after consultation with the Board.
Financial services and securities Islam Labuan 101 (3) an application for a licence to conduct Islamic banking business of Labuan by a Labuan company proposed to incorporated under the companies act of Labuan 1990 ("Labuan company proposed") shall be accompanied by the following: (a) the applicant's proposed constituent documents 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 principal business of the proposed for the applicant and the principal place of business for the applicant; and (iii) the name and address of the applicant's directors 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 all officers to be responsible for the management of Labuan Islamic banking business of the applicant;

(d) a copy of balance sheet for the business participant suggested that each will hold ten percent of its paid up capital or more for every three financial year immediately before the date of application; and (e) the assurance be obtained and an undertaking given by the members proposed that 102 laws of Malaysia ACT 705 they will cause the company's Labuan a proposed, when incorporated, 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 Islam Labuan Labuan company by an alien shall be accompanied with the following: (a) documents duly certified konstituennya by any means by any officer as may be received by 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 that the purpose

the sole and exclusive company that is carrying out foreign Labuan Islamic banking business of Labuan;

(d) a copy of balance sheet for the business applicant for every three financial year immediately before the date of the application; and (e) an undertaking given by the applicant in respect of the Islamic banking business of Labuan, in such manner and form as financial services and Labuan Islamic securities acceptable to the Board is 103, 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 with respect to Islamic banking business Labuannya;

(ii) if the applicant is a foreign company's Labuan, that it shall immediately notify the Board of any change of the members holding ten per cent paid-up capital or more; and (iii) every Director or officer of the principal applicant who is responsible for the management of Islamic banking business Labuannya must be a fit and proper person and appointment of Director or principal officer shall be made only after consultation with the Board.

(5) an application for a licence to conduct Islamic banking business of Labuan by a foreign company seeking registered as a foreign company's Labuan under the companies act of Labuan 1990 ("Labuan proposed foreign companies"), shall be accompanied by the following: (a) the constituent document under which it is to be established, properly certified by any means by any officer who dicadangkannya as may be received by the Board;

(b) a copy of the balance sheet audited on business for three financial years immediately before the date of the application;
104 the laws of Malaysia ACT 705 (c) a statement of the following: (i) the name, place and date of incorporation of the foreign company;

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

(iii) the name and address of the Director of the foreign companies;

(iv) the name and address of the participant of foreign companies each holding ten per cent paid-up capital or more foreign companies it; and (v) the name, address, qualifications, work experience and positions proposed for, all company officials proposed that foreign Labuan will be responsible for the management of Islamic banking business Labuannya; and (d) an undertaking given by a foreign company as is mentioned in paragraph (4) (e).

(6) an application for a licence to conduct Islamic banking business of Labuan by a bank of Malaysia shall be accompanied with the following: (a) the applicant's constituent document accordingly certified by an officer of the applicant in such manner as may be acceptable to the Board;

(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: financial services and securities Islam Labuan 105 (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 Islamic banking business of the applicant.


Application for a license to run the investment banking business of Labuan Islamic 64. An application for a licence to carry out Islamic 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 63 relating to Islamic banking business of Labuan shall also apply for him except "Labuan Islamic banking business" shall be read as "Labuan Islamic investment banking business".


Application for a license to do business in Islamic finance Labuan 65. An application for a licence to carry on the business of Labuan Islamic finance must be made in writing to the Board by or on behalf of the applicant and shall be accompanied by such documents, statements and information as determined by the Board.



106 the laws of Malaysia ACT 705 additional information 66. The Board may, at any time, upon receipt of an application under section 63, 64 or 65 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 deemed necessary by the Board for the purpose of determining the suitability of the applicant for the grant of the license.


Grant of a license by the Board 67. (1) upon receipt of an application for a licence in accordance with section 63, 64 or 65 and after given all the information and documents as may be required under that section, and information and additional documents under section 66, the Board may approve the application, with or without conditions, or reject the application.

(2) where the Board rejects an application for a licence under subsection (1), 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 the licence to the applicant after the applicant satisfied with any 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 under the provisions of this Act.

(5) No applicant may be granted a licence under this section without the consent in writing of the Board if its capital fund is less than ten million dollars or the equivalent in such foreign currency in cash or in such amount as may be specified in writing by the Board.

Financial services and securities Islam Labuan 107 (6) the Board may, after consultation with the Minister, by notice in writing to Licensee Islamic banks, amend the terms and conditions or impose such additional terms and conditions, in respect of such licence, from time to time as he thinks fit.


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


68. (1) Islamic bank licensee shall at all times patch or paint, or ensure that the sealing or dicatkan, at a place that stands out for its office outside each and that can be read easily, name, his/her license and the words "bank Islam Labuan" or "investment bank Islam Labuan", as the case may be.

(2) licensee Islamic banks shall, in any bill head, letter paper, printed forms, notices, advertisements, or any other documents issued from his Office and in business dealings, in prominent print name, number of his/her license and the words "bank Islam Labuan" or "investment bank Islam Labuan", as the case may be.

(3) No person, who is not a licensee of bank Islam, may, without the consent in writing of the Board, taking over or use the word "bank Islam Labuan" or "investment bank Islam Labuan" or any derivative of such words in any language that can be construed as indicating that the person carrying out the Islamic banking business of Labuan or Labuan Islamic investment banking business.

(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 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.
108 the laws of Malaysia ACT Retention 705 69 capital adequacy ratio. (1) No licensee Islamic banks can run the Islamic banking business of Labuan or Labuan Islamic investment banking business capital money is less than the amount determined in writing by the Board.

(2) every licensee shall maintain bank Islam at all times, any capital adequacy ratio, as may be specified in writing by the Board from time to time and there are no Islamic bank licensees can run the Islamic banking business of Labuan or Labuan Islamic investment banking business if the capital adequacy ratio specified is not complied with, except with the approval of the Board.

(3) licensee Islamic 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 Islamic banks to take appropriate steps to correct any deficiency in any ratio determined in such manner as the Board may think fit.


Amendment or variation of constituent documents of bank Islam 70 licensees. (1) every licensee bank Islam Labuan which is a company shall, before making any amendment or alteration to any document konstituennya, giving the Board a written details about the amendment or variation of a proposed for approval by the Board.

(2) every licensee bank Islam Labuan which is a company or a foreign bank shall within three months after the making of any amendment or alteration to konstituennya documents, giving the Board the details of financial services and securities Islam Labuan 109 writing of amendment or variation of such certified accordingly by an independent licensee that Islamic banks in a manner acceptable to the Board.

(3) No licensee Islamic banks can make any amendment or alteration that is inconsistent with any written law to document konstituennya.

(4) No licensee participant bank Islam which holds fifteen per cent paid-up licensees Islamic banks or more can be changed without the written approval of the Board in advance and, if licensee bank Islam Labuan company is a foreign licensee Islamic banks shall immediately notify the Board of any change in the members which hold fifteen per cent paid-up capital or more.


The Board shall publish the list of licensees bank Islam Labuan 71. (1) the Board shall publish each year not later than 31 March each year, a list of all licensees bank Islam Labuan 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, as soon as workable, a revised list of all licensees bank Islam Labuan existing in the Gazette.

(2) the list referred to in subsection (1) shall be contained in the same Gazette published by the Board under section 96 of the Financial Services Act and Labuan Securities 2010.




110 laws of Malaysia ACT 705 Chapter 3 obligations of licensee bank Islam Office and its 72. Licensee bank Islam Labuan can be a company, subject to the prior written consent of the Board in advance of or in such other matters as may be permitted by the Board from time to time, open any Office other than the principal place of business in Labuan, or acquire or establish any subsidiary.


Prohibition of certain account 73. (1) No licensee Islamic banks can receive any money on deposit or loan is repayable on demand by cheque, drafts, orders or any other instruments issued by the depositor on the licensee bank Islam.

(2) every licensee shall conduct an investigation of bank Islam with due diligence before opening any account for a client.

(3) any licensee Islamic banks in violation of 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 of each, 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.





Financial services and securities Labuan Islamic financial statements 111, statistics and information should be submitted to the Board of 74. Licensee Islamic banks shall comply with the requirements in respect of the financial statements, statistics and information to the Board as specified in the third schedule.


Payment of the deceased's account


75. (1) Notwithstanding any law, the licensee can Islamic banks, 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 who provides evidence that satisfaction 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) licensee Islamic banks cannot make any payment under subsection (1) if the licensee of the Islamic banks have received other claims against any money found on the deceased's credit.

(3) licensee Islamic banks or its directors or officers shall not be 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.




112 laws of Malaysia ACT 705 PART VII BUSINESS TAKAFUL TAKAFUL RELATED ACTIVITIES and LABUAN LABUAN Chapter 1 Preliminary Interpretation 76. (1) in this part, unless the context otherwise requires — "domestic takaful business" means the business of takaful policy matter is — (a) property for the time that policy is made in Malaysia or in transit to or from Malaysia;

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

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

"family takaful" means the takaful benefit the individual and his family;

"the family takaful business" means relating to the takaful business family takaful;

"the General takaful business" means a non-takaful business family takaful business, but including the takaful business financial services and securities Islam Labuan 113 relating to financial aid and assistance to the participants for losses arising from disaster as an accident, fire, flood and theft;

"Labuan kaptif takaful business" means the business of takaful off participant in the takaful business is related company or Corporation affiliate for Labuan takaful operator or a participant in the takaful business is any other person in respect of which the takaful operator Labuan is authorised by the Board to provide takaful or retakaful;

"Labuan retakaful business" means a business that comply with Shariah principles which the retakaful operator Labuan assumed a liability under the original contract of takaful for one other takaful operator or the retakaful operator;

"Labuan re-takaful operator" means a takaful operator Labuan Labuan retakaful business.

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

(b) arrange the takaful business of Labuan on behalf of any takaful operator who wanted retakaful; or (c) analyze the financial circumstances of another person and provide a plan to meet the needs and financial objectives of the other person, whether or not a fee imposed on him or her;

"Labuan takaful business" means the business of takaful takaful business not transacted in domestic and foreign currencies, and includes the takaful business kaptif Labuan, 114 laws of Malaysia ACT 705 takaful business of Labuan and any other takaful business as approved by the Board;

"Labuan takaful Manager" means a person licensed to provide services for management or administration associated with Labuan takaful business but does not include an underwriting Manager takaful Labuan;

"Labuan takaful operator" means a person licensed to carry on the takaful business, Labuan;

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

"the Malaysian takaful operator" means a takaful operator licensed under * Takaful Act 1984 [Act 312];

"net contribution income" in respect of a financial year, means that the contributions received under the contract of takaful or retakaful after deducting any contribution payable in respect of prearranged contracts or retakaful it;

"policy" means a certificate of takaful and any reference to the takaful operator policy and includes a reference of Labuan on any policy in respect of which the takaful operator of the Labuan under any liability, whether this policy is issued by the takaful operator Labuan or liability have been transferred to the takaful operator of Labuan from one other takaful operator;

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

* NOTE — of Takaful Act 1984 [Act 312] was repealed by the Islamic financial services Act 2013 [Act 759] — see section 282 of the Act 759.
Financial services and securities Islam Labuan 115 "takaful" means a scheme that conform with Shariah principles based on brotherhood, solidarity and mutual assistance which provides financial support and assistance to the participant when needed which the members agree jointly to make contributions for that purpose;

"the takaful business" means the business of takaful goal and pengoperasiannya is in compliance with Shariah principles;

"certificate of takaful" includes any takaful contract in writing whether or not contained in or evidenced by a instrument in the form of the takaful certificate;

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

"takaful licensee" means any person licensed under this part;


"the takaful operator" means a person who runs the takaful business;

"funds work" means — (a) in relation to the company's Labuan, paid-up capital is not tercacat with loss; or (b) in relation to the company's Labuan branch or a foreign operator takaful Malaysia, the surplus assets to overcome liabilities to be maintained in the books for his Office in Labuan;

(2) if fifteen percent or more of the voting shares of a corporation held by a corporation to another corporation that first-mentioned shall be deemed to be an affiliate for corporations other corporation, and any reference to "Corporation affiliate" shall be construed as a reference to the Corporation first referred to that or any other corporation, as the case may be.
116 the laws of Malaysia ACT 705 Chapter 2 Licensing Licensing business of takaful takaful related activities and Labuan Labuan 77. (1) No person shall carry out or mengurusniagakan or submit himself to be run or mengurusniagakan any takaful business of Labuan unless that person is — (a) the company's Labuan;

(b) the foreign company Labuan; or (c) a branch of the Malaysian takaful operator, and hold valid takaful licences.

(2) Notwithstanding subsection (1), an insurer of Labuan as defined in the financial services and Securities Act of Labuan 2010 can run or mengurusniagakan or submit himself to be run or mengurusniagakan any takaful business Labuan Labuan insurers if the prior authorization of the Board.

(3) No person shall carry out or mengurusniagakan or submit himself to be run or mengurusniagakan any business as General Manager of takaful takaful underwriting Manager of Labuan, Labuan or Labuan takaful brokers or any other takaful related activities of Labuan as determined by the Board unless that person holds a valid takaful licences.

(4) Notwithstanding subsection (3), an insurance Manager, underwriting Manager Labuan Labuan or Labuan insurance brokers as defined in the Securities and Financial Services Act 2010 can run or Labuan financial services and securities Islam Labuan 117 mengurusniagakan any business as General Manager of takaful takaful underwriting Manager, Labuan or Labuan takaful brokers or any other related activities if the Manager of the takaful takaful Labuan Labuan underwriting Manager, takaful takaful brokers or Labuan Labuan has obtained the prior consent of the Board.

(5) except with the prior written approval of the Board, a person who is not a licensee of takaful may not wear or use the word "Labuan takaful operator", "Manager", "takaful Labuan underwriting Manager Labuan takaful, takaful brokers" "Labuan" or any derivative of that word in any language that can be construed as indicating the conduct of takaful business Labuan or Labuan takaful related activities by that person.

(6) this section shall not apply to the licensee or licensees that distribute products of bank Islam for takaful takaful operator Labuan who had prior Board authorization.


Application for licence takaful to carry on the takaful business Labuan 78. (1) subject to section 77, every applicant for a licence to carry on the takaful business 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 a foreign branch of the Malaysian takaful operator;

(b) the funds of the applicant's work — (i) in the case where the applicant intends to carry out either the family takaful business or General takaful business, is at least seven million five hundred thousand dollars or the equivalent in the 118 laws of Malaysia ACT 705 any foreign currency or any amount or kind of other currencies as determined by the Board;

(ii) in the case where the applicant is proposing to conduct retakaful business alone, is at least Labuan ten million dollars or the equivalent in such foreign currency or any amount or kind of other currencies as determined by the Board;
or (iii) in the case where the applicant proposes to carry on the takaful business kaptif Labuan alone, is at least three hundred thousand dollars or the equivalent in such foreign currency or any amount or kind of other currencies as determined by the Board;

(c) the sum specified in paragraph (b) maintained in its account with the 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 the takaful operator Labuan;

(e) the applicant is either — (i) has established, or to be set up, its management in Labuan with sufficient knowledge and expertise for takaful business in Labuan to be carried out; or (ii) has appointed, or shall elect, an underwriting Manager takaful Labuan financial services and securities Islam Labuan 119 licensed takaful or Manager in Labuan Labuan with sufficient knowledge and experience to Labuan takaful business to be carried out;

for the purposes of paragraph (ii), except in respect of applicants applying for takaful business kaptif Labuan, the applicants shall appoint only one takaful underwriting Manager Labuan; and (f) the applicant will be a member of an association may be prescribed by the Board.

(2) Notwithstanding paragraph (1) (b), the Board may, after taking into account the extent and amount of the takaful business Labuan proposed is carried out by the applicant, determine an amount lower work funds, 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 the takaful business Labuan shall — (a) be in writing and submitted to the Board;

(b) state whether the Labuan takaful business family takaful business-related or General takaful business;

(c) state the type of the takaful business Labuan, according

the case may be, to be carried out under takaful licences;

(d) stating the applicant's business plan; and (e) accompanied by — 120 laws of Malaysia ACT 705 (i) a copy of — (aa) constituent documents of the applicant, duly certified by a Director or an officer of the applicant;

(bb) resolution of the Board and general meeting, if any, of the applicant, duly certified by a Director or officer of the applicant, which allows the applicant to make the application for licence takaful;

(cc) the certificate of incorporation or registration of the applicant, as the case may be, is certified by the appropriate authority sign related in the place of incorporation or place of origin of the applicant; and (dd) except in respect of an application to carry on the takaful business kaptif Labuan, a letter of awareness of local supervision authorities of the applicant or of any other authorities as may be 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 of the financial services and securities Islam Labuan 121 is 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 takaful operator 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 branch or company Labuan Malaysian takaful operator, an undertaking given by the applicant in respect of the takaful business Labuannya, in such manner and form as may be accepted by the Board, and guarantee and undertaking shall be allocated , among other things, that — (aa) the applicants should comply with the financial obligations and requirements imposed under this Act and shall settle the liability of the applicant in respect of the takaful 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 in advance and, if the applicant is a foreign company's Labuan, that it shall immediately notify 122 laws of Malaysia ACT 705 Board on the 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 the management of takaful Labuannya shall be the person who is fit and proper and the appointment of a Director or principal officer shall only be made after consultation with the Board.

(4) Subparagraph (3) (e) (v) shall not apply to an application to carry on the takaful business kaptif Labuan if the policy owner is a related corporation or perbadanan Labuan takaful operator allies.

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

(6) the information or document as may be determined by the Board under subsection (5) may be different from the applicant, or class, category or description are different for the applicant as determined by the Board.

(7) an application under this section may be made in respect of persons who have not been incorporated under the companies act of Labuan 1990 but will be established if the person obtains a takaful licences, and in the case of such, the requirements of subsection (1) may be varied by the Board as it may deem appropriate.


Application for licence takaful to carry on the takaful Labuan 79 related activities. (1) every applicant for a licence to carry on the takaful business as General Manager of takaful Labuan, Manager of financial services and securities underwriting 123 Labuan Islamic takaful Labuan or Labuan takaful brokers 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 sufficient funds in its business to cover operating expenses and management in Labuan for at least six months;

(c) in respect of an applicant for a license to conduct business manager of takaful takaful Labuan or Labuan underwriting Manager — (i) the applicant has established, or to be set up, its management in Labuan with sufficient knowledge and expertise about Labuan takaful business to be carried out; or (ii) the applicant has appointed, or shall appoint a manager of the takaful Labuan licensed or underwriting Manager takaful Labuan Labuan with sufficient knowledge and experience about Labuan takaful business to be carried out to act as its management in Labuan;

(d) in respect of an applicant for a license to conduct business as takaful brokers takaful Labuan — (i) the applicant has established, or will create its Labuan with sufficient knowledge and expertise about Labuan takaful business to be carried out; or 124 laws of Malaysia ACT 705 (ii) the applicant has appointed, or shall appoint a manager of the takaful Labuan Labuan licensed with sufficient knowledge and experience about Labuan takaful business to be carried out to act as its management in Labuan;

(e) the applicant either has acquired or will acquire any professional indemnity insurance, or takaful policy professional indemnity not less than two million five hundred thousand dollars or the equivalent in such foreign currency or such other amount as may be 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 will be a member of an association as may be prescribed by the Board.

(2) every application for a license to conduct business as General Manager of takaful takaful underwriting Manager of Labuan, Labuan or Labuan takaful brokers

shall — (a) be in writing and submitted to the Board;

(b) state the type of business to be conducted under the takaful licences; and (c) accompanied by — (i) a copy of — financial services and securities Islam Labuan 125 (aa) constituent documents of the applicant, duly certified by a Director or an officer of the applicant;

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

(cc) the certificate of incorporation or registration of the applicant, as the case may be, which are accepted by the relevant registration authority in the place of incorporation or the original applicant; and (dd) a letter of awareness of supervisory authorities of the home country of the applicant or of any other authorities as may be 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;
126 the laws of Malaysia ACT 705 (iv) a declaration by the applicant regarding the honesty of Directors and officer applicants who will be involved in the management of the takaful Manager Labuan, an underwriting Manager of takaful takaful brokers or Labuan Labuan, proposed, as the case may be; 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 takaful operator Malaysia, an undertaking given by the applicant in respect of business manager of takaful takaful underwriting Manager of Labuan, Labuan or Labuan takaful brokers, as the case may be , in such manner and form acceptable to the Board, and guarantee and undertaking shall provide for, inter alia, that — (aa) the applicant shall 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 takaful takaful underwriting Manager of Labuan, Labuan or Labuan takaful brokers, 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 company's Labuan financial services and securities Islam Labuan 127 foreign, that it shall immediately notify the Board of any changes regarding 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 the management of business manager of takaful takaful underwriting Manager of Labuan, Labuan or Labuan takaful brokers, as the case may be, shall be the person who is fit and proper and the appointment of a Director or principal officer shall only be made after consultation with the Board.

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

(4) the matters specified under subsection (2) may be different from the applicant, or class, category or description of different applicants.


Grant of 80 takaful licences. (1) upon receipt of an application for a licence of takaful, 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 approve the takaful licences under subsection (1), the Board shall issue the takaful licences to the applicant.
128 the laws of Malaysia ACT 705 (4) the Board may specify the types of activities that can be undertaken by the licensee in the takaful takaful licences.

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

(6) the takaful licences shall comply with any conditions imposed under the licence granted pursuant to subsection (1) during the period of the license.

(7) a licence granted under this section shall remain in force until it is surrendered or revoked under the provisions of this Act.

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


Publication of a list of all licensees takaful Labuan 81. (1) the Board shall publish each year not later than 31 March of each year a list of all licensees of takaful 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 the broadcast, the Board shall cause to be published, as soon as workable, a revised list of all existing takaful licences and licence number of the takaful licensees in the Gazette.

(2) the list referred to in subsection (1) shall be contained in the same Gazette published by the Board under section 106 of the Financial Services Act and Labuan Securities 2010.
Financial services and Labuan Islamic securities licensing requirements 82 129 Continuation. (1) every takaful operator Labuan is a company of Labuan shall, before making any amendment or alteration to any document konstituennya, 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 takaful operator Labuan Labuan is a foreign company shall, before making any

their principal officer Exchange, provide details in writing to the Board regarding any proposed changes to the Board's approval.

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

(4) every licensee takaful Labuan shall immediately inform the Board of any amendment or alteration to any information which has been provided to the Board in relation to an application for the takaful licences.

(5) no Labuan takaful operator can make any amendment or alteration to the konstituennya document to the contrary with any written law.

(6) if the takaful operator is a company of Labuan Labuan, Labuan takaful operator no attendees who holds fifteen per cent paid-up capital or more can 130 laws of Malaysia ACT 705 changed without prior written approval from the Board and, if the takaful operator of the Labuan Labuan company is a foreign, the takaful operator shall immediately notify the Board of any change of the members holding fifteen per cent paid-up capital or more.


Chapter 3 Financial Needs and obligations and restrictions on licensee takaful Appointment actuarial 83. Every Labuan takaful operator who carries the family takaful business shall appoint an actuary annually within such period as may be determined by the Board.


Solvency margin of 84. Every takaful operators to Labuan, including a licensee who carries on the business of takaful takaful kaptif Labuan, must ensure that the value can be the result of its assets exceed liabilities by a margin according to such amount or calculated in such manner as may be specified in writing by the Board from time to time.


Separation of the takaful Fund 85. (1) the assets of any fund established for any of the family takaful business and any general takaful business under this Act shall be kept separate from all other assets of takaful operators of Labuan, and does not include any amount on the basis of the good name, interest development expenditure or similar item that could not be financial services and securities Islam Labuan 131 realised in addition to the business or part of business takaful operator of the Labuan.

(2) for the purposes of this section, the assets of which from time to time representing any deposits the retakaful operator Labuan held by the takaful operator Labuan to settle liabilities of any fund established for family takaful business or any general takaful business shall be calculated with the agreement of the retakaful operator of Labuan as an asset of the Fund.


Separate accounts shall be kept by the takaful operator Labuan 86. (1) every Labuan takaful operator shall keep accounts in respect of the takaful business Labuannya separately from his account to another.

(2) every Labuan takaful operator who carries both the takaful business family and General takaful business shall keep accounts in respect of the family takaful business separate from the account in respect of the General takaful business.

(3) every takaful operator Labuan is a branch of the Malaysian takaful operator shall keep accounts in respect of the takaful business Labuannya separate from the account in respect of domestic use takaful business in Labuan.


Presentation of the financial statements 87. Every licensee of takaful under this section shall comply with the requirements concerning the presentation of the financial statements set out in the third schedule.


132 laws of Malaysia ACT 705 Subsidiary and licensee takaful 88. Takaful licensee under this section may, subject to the prior written consent of the Board, or as permitted by the Board from time to time, open any Office other than the principal place of business in Labuan, or acquire or establish such subsidiary.


Restriction on business of takaful licensees by the takaful operator Labuan 89. (1) no takaful operator Labuan can undertake any business activities in Labuan or elsewhere from its Office in Labuan in addition to takaful business Labuannya business activities or in respect of or for the purpose of the Labuan takaful business.

(2) Notwithstanding the definition of "takaful business Labuan" and subsection (1), a person of Labuan takaful operator may conduct retakaful business domestic, including takaful takaful takaful business operated as a domestic ringgit and any other business as may be specified by the Board.

(3) no takaful operator Labuan can act on behalf of a takaful operator Labuan as Manager of takaful takaful underwriting Manager or Labuan Labuan unless Labuan takaful operator who first mentioned has been granted a license to conduct business as General Manager of takaful Labuan or Labuan takaful underwriting Manager, as the case may be.





Financial services and securities Labuan Islamic restrictions on 133 and the duty manager of the takaful Labuan, an underwriting Manager of takaful takaful brokers Labuan Labuan and 90. (1) no manager of takaful Labuan licensed can provide any services other than administrative and no underwriting Manager licensed takaful Labuan can provide any services other than underwriting services.

(2) no underwriting Manager Labuan takaful can provide underwriting services to any person who is not licensed under this Act or to any business conducted by takaful operator registered under * the Takaful Act 1984.

(3) no takaful brokers Labuan can act as broker in respect of domestic takaful business, but one broker Labuan licensed takaful can handle retakaful

the takaful business domestically, including retakaful the takaful business operated as a domestic dollars.

(4) every manager of takaful Labuan or Labuan takaful underwriting Manager acting on behalf of the takaful operator Labuan shall maintain the money is separate from money the takaful operator Labuan and cannot use the money the Labuan takaful operator to explain any expenses or liabilities other than with respect to the Labuan takaful business.

List of the takaful operator of Labuan shall be supplied by the Manager of takaful takaful underwriting Manager and Labuan Labuan 91. Every manager of takaful takaful underwriting Manager and Labuan Labuan shall, within thirty days from the closure of * NOTE — of Takaful Act 1984 [Act 312] was repealed by the Islamic financial services Act 2013 [Act 759] — see section 282 of the Act 759.

134 the laws of Malaysia ACT 705 its financial year, submit to the Board, in such form and manner as may be determined by the Board, a list of all the takaful operator Labuan Labuan takaful Manager for which provides the necessary administrative or underwriting Manager takaful Labuan provides underwriting.


Conduct of business 92. (1) every Labuan takaful operator shall — (a) carry on business takafulnya with due diligence and caution in accordance with Shariah principles;

(b) to comply with international accounting standards that are received or any other standard approved by the Board;

(c) register all assets on its name, or the name of the custodian or nominee for takaful operators Labuan if the asset is acquired in the name of the custodian or nominee, and in the case of bearer shares, hold it in safe custody; and (d) show clearly on letterhead, the tool he wrote and other documents containing its name that it is licensed under this Act, together with the licence number takafulnya.

(2) no takaful operator Labuan can advertise or publish, in any form, the information is not correct or likely to mislead another person in relation to the law applicable to the takaful operator Labuan and business and its related activities or financial status of the takaful operator Labuan or takaful plan or retakaful or any other matter in respect of the takaful business Labuannya.

Financial services and securities Islam Labuan 135 (3) Paragraph 1 (a) and (d) and subsection (2) shall apply with the necessary modifications for the Manager of the takaful Labuan, an underwriting Manager of takaful takaful brokers and Labuan Labuan.

Chapter 4 Payment Policy moneys under the policy of takaful family and personal accident takaful policy Application this chapter 93. In this chapter, a reference to a policy is a reference to the family takaful policy with respect to the life policyholders including life policy under section 23 civil law Act 1956 [Act 67], and a family takaful policy in respect of personal accident by the policy owner to his own that provide payment policy moneys upon his death.


The power to make the naming of 94. (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 by notifying the Labuan takaful operator 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, the policy owner shall submit the policy together with details of the nominee referred to in subsection (1) for endorsement of a takaful operator the naming on Labuan the policy.



136 the laws of Malaysia ACT 705 (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 takaful operator Labuan — (a) shall display clearly in the nomination form a notice that the policy owner should assign the policy benefits to her nominee if his intention is for the nominee of his, other than his spouse, his son or mother or father, to 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) may 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 the takaful operator Labuan for endorsement on the policy.

(6) a nomination made under subsection (1) may be made for the benefit of one person or a few people and if there is more than one named, the policy owner may direct that specified part paid to the person nominated it and in the absence of instructions by the owner of the policy, the takaful operator of Labuan shall pay the same portion of a lot to that person.



Financial services and securities Islam Labuan 137 Revocation naming 95. (1) a nomination, including a nomination for which section 97 applies, shall be cancelled — (a) when a nominee dies, or if there is more than one nominee, when all the nominees to death, during the lifetime of the policy owner;

(b) by a written notice given by the owner of the policy; or (c) any other 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, in the absence of any nomination later by the policy owner to dispose the dead parts of the nominee, the takaful operator 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.


Payment of moneys policy 96. (1) subject to subsection (2), if an owner

policy die having made a nomination, Labuan takaful operator shall pay the money policy 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 takaful operator Labuan realize the policy owner's death, the takaful operator of Labuan shall 138 laws of Malaysia ACT tell 705 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 from the notification under subsection (2), section 100 shall apply as if no nomination has been made.

(4) where a nominee, other than a nominee under section 97, dying after the death of the policy owner but before any money policy has been paid to him as nominee, section 95 or section 100 shall apply to the policy, as the case may be.


Trustee of the policy moneys 97. (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 (b) if 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) cannot be 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 takaful operator Labuan, may appoint trustees for money policy is and if there is no trustee — (a) the nominee credible to contractual; or financial services and securities Islam Labuan 139 (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 relief to the takaful operator 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 a policy owner from applying to the Court for a declaration that this section, in whole or in part, is not applicable to any specific policy on the ground that premiums under the policy have been paid to cheat the creditors.


Nominee other than a nominee under section 97 98. (1) a nominee, other than a nominee under section 97, 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 the takaful operator of Labuan shall be released from liability in respect of the policy moneys paid.

(2) subsection (1) apply to nominee Muslim policy owner who, upon receipt of policy moneys that, 140 laws of Malaysia ACT 705 shall divide the policy moneys in accordance with Shariah principles.


Money policy diserahhakkan or backed up 99. (1) Notwithstanding the nomination under section 94 or the creation of a trust under subsection 97 (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 rights under the mortgage or assignment is preserved Labuan, the takaful operator shall pay the balance of the policy moneys to the nominee.

(2) if there is 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 their 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.


Payment of money policy if there is no naming 100. (1) if the policy owner dies without making a nomination, subject to section 99, the takaful operator of Labuan shall pay the money policy the policy owner who died to applicants who submit a grant of Probate, letters of administration or the distribution Order.

(2) subject to subsection (1), Labuan takaful operator 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 — financial services and securities Islam Labuan 141 (a) if the policy moneys not exceeding one hundred thousand ringgit or value equivalent in a foreign currency or any amount or kind of other currencies more as Labuan, the takaful operator can pay all the money the policy without requiring the grant of Probate, letters of administration or order Division — (i) to someone who satisfy the takaful operator Labuan as ought to be given the right and the grant of Probate, letters of administration or order Distribution; or (ii) to a person the satisfaction of Labuan as the takaful operator is entitled beneficially to the estate of a deceased policy owner thereof; or (b) if the policy moneys that are more than one hundred thousand ringgit or value equivalent in foreign currencies, or any amount or kind of other currencies more as Labuan, the takaful operator 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 the

such person the balance of the policy moneys in the grant of Probate, letters 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 the policy owner and the takaful operator Labuan is if there is no nomination.

(4) the grant of Probate, letters of administration or the distribution Order given or which have effect seems to have been granted, in respect of the estate of a 142 laws of Malaysia ACT 705 consists of 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 the takaful operator Labuan to pay money the policy to the person to whom the grant is made.

(5) the takaful Operator may receive a grant of Probate of Labuan, letters of administration or the distribution Order or any other document having the same force, 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, letters of administration or the distribution Order 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 a payment under paragraph (2) (b) was made by someone the takaful operator Labuan, a balance of the policy moneys still due and no claim has been made by a person who holds a grant of Probate, letters of administration or order distribution, Labuan takaful operator shall pay the balance of the money the policy to the person who received the initial payment of the policy moneys.

(7) the policy moneys payable under this section shall be deemed to have been paid accordingly and the takaful operator of 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 defect in, grant of Probate, letters 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.
Financial services and securities Islam Labuan 143 payments to people who are not competent to contract 101. 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 Committee of his estate has been appointed, or be unable, by reason of the weakness of mind or body, to take care of himself and property and Affairs, the takaful operator Labuan — (a) in the case of a nominee under subsection 97 (1) — (i) if the policy moneys is ten thousand dollars or the equivalent in foreign currencies or less or any amount or kind of other currencies as determined, can pay to someone who satisfy the takaful operator Labuan is that he will use the policy moneys for the remuneration and benefits of the nominee under subsection 97 (1), or a person to whom the policy moneys payable under subsection 100 (2) or (6), subject to the implementation of an undertaking by the person that the policy moneys will be used alone-points for remuneration and benefits of the nominee; and (ii) if the money policy is more than the amount 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 100 (2) or (6), shall pay to the holder of a public trust or a trust company named by the Trustees Raya.

144 the laws of Malaysia ACT 705 money Distribution policy in the course of the administration of appropriate 102. A person to whom the policy moneys payable under section 100 shall receive the policy moneys as an executor and not merely as beneficiaries and shall divide the policy moneys in the course of proper administration of the estate of the deceased 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 provision of pusakanya property on his death without a will.

This chapter shall supersede the policies and any other written law 103. (1) this section shall have effect in relation to the policy in force on or after operations, and in respect of a nomination made before, on or after the operation, notwithstanding anything contained in the policy, and there is nothing contained in the policy that can reduce, or interpreted as reducing in any way or to any extent, this chapter.

(2) this section shall have effect and the full effects notwithstanding anything which is not in accordance with or contrary to any other written law relating to probate, administration, distribution or the granting of the estate of the person who died, or in any of the five pillars of law, practice or custom relating to the matter.

Chapter 5 Winding Winding takaful operator Labuan 104. (1) the Board shall be a party to any petition for the winding up of any takaful operator Labuan.
Financial services and securities Islam Labuan 145 (2) the Board may submit a petition for the winding up of a takaful operator Labuan or takaful business Labuannya on the ground programs for discharge of any liabilities or when it suspended payments to his creditors.

(3) for the purposes of subsection (1) and (2), the Court shall pay attention to the importance of the policy owner, other clients and creditors of the takaful operator Labuan.

(4) in any winding up of the takaful operator Labuan or Labuan takaful operator when becoming insolvent, shall be paid out of the assets of the takaful Fund or other takaful operator of the Labuan in priority before all other unsecured liabilities, liabilities the following in order of the following: (a) the costs and expenses of the winding up, including the cost of

liquidator or receiver;

(b) 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 in foreign currencies or any amount or kind of other currencies as may be determined from time to time in respect of the services provided by him to the Labuan takaful operator within four months prior to the commencement of the winding up;

(c) 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;

146 the laws of Malaysia ACT 705 (d) 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) all amounts payable in respect of contribution payable within twelve months immediately before the commencement of the winding-up by the takaful operator of Labuan as the employer of any person under any written law relating to the retirement fund or employees or under any superannuation or pension benefit is a scheme approved under any federal law relating to income tax;

(f) the amount of all federal taxes that are assessed under any written law prior to the date of the commencement of the winding up or assessed at any time before the expiry of the time set for proving liability;

(g) all liabilities and expenses that can be linked with the takaful business Labuannya of classes for which the particular takaful Fund is established; and (h) the amount required to pay any deficit in the takaful Fund after other liability and an expense that can be associated with Labuan of takaful business class for him certain takaful Fund referred to in paragraph (g) applies has been paid in full.

(5) liability in each class which is specified in subsection (4) shall be staggered in order specified but financial services and Labuan Islamic securities liabilities of 147 of the same class shall have the same level of liability between itself, and must be paid in full, unless the assets of takaful fund the takaful operator Labuan is not sufficient to explain it, that in that case the liability shall be reduced by the same rate between them.

(6) for the avoidance of doubt, the provisions relating to winding-up as applicable to the takaful operator of Labuan shall not apply to any that takaful Fund is set aside pursuant to section 85 and which are not can be part of the assets of takaful operators to Labuan.

(7) 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.


PART VIII the ISLAMIC TRUST establishment of LABUAN Labuan Islamic trust 105. (1) a trust Islam Labuan shall be a trust established under this section and in accordance with the requirements stated in the Labuan Trust Act 1996 [Act 554], which further explained that the establishment of the trust expressly for the purpose of pursuing that goal and pengoperasiannya is in compliance with Shariah principles.

(2) unless otherwise provided, the provisions of the Labuan Trust Act 1996 shall apply to any trust Islam Labuan.



148 laws of Malaysia ACT 705 Asset Trust Islam Labuan 106. Labuan Islamic trustee shall ensure that Labuan Islamic trust assets does not include any property that is not allowed based on Shariah principles, and that the assets are managed and invested in a manner that does not violate Shariah principles.


PART IX ISLAMIC FOUNDATION Islamic Foundation establishment of LABUAN Labuan 107. (1) a Foundation shall be Islam Labuan foundations established under this section and in accordance with Act Foundation Labuan 2010 which the establishment of the Foundation with the purpose pursued with real motivation and pengoperasiannya comply with Shariah principles.

(2) unless otherwise provided, the provisions of the Act Foundation Labuan 2010 shall apply to any of the Islamic Foundation of Labuan.


The aims and purposes of 108. (1) the aims and purposes of the Islamic Foundation of Labuan does not include any goals or purposes that do not comply with Shariah principles.

(2) a Labuan Islamic Foundation cannot conduct any activities that do not comply with Shariah principles.





Financial services and securities Islam Labuan 149 109 Charter. Labuan Islamic Foundation Charter shall not include any elements that do not comply with Shariah principles.


The assets of 110. Officer of an Islamic Foundation of Labuan shall ensure that Labuan Islamic Foundation assets does not include any property that is not allowed based on Shariah principles, and that the assets are managed and invested in a manner that does not violate Shariah principles.


Part X LIMITED SHARING ISLAM LABUAN and LIMITED LIABILITY PARTNERSHIPS ISLAM LABUAN limited partnership Establishment Islam Labuan and limited liability partnerships Islam Labuan 111. (1) a limited partnership of Labuan Islamic and Islam Labuan limited liability partnerships shall be established under this section and in accordance with the Act Limited Partnerships and limited liability partnerships Labuan 2010, which according to the establishment of the partnership carried out expressly for the purpose of that goal and pengoperasiannya shall comply with Shariah principles.

(2) unless otherwise provided, the provisions of the Act Limited Partnership and limited liability partnerships Labuan 2010 shall apply to any partnership limited Islam Labuan and limited liability partnerships Islam Labuan.




150 laws of Malaysia ACT 705 112 goals and purpose. (1) a partnership agreement of a partnership limited Islam Labuan and limited liability partnerships Islam Labuan shall not include any goals or purposes that do not comply with

Shariah principles.

(2) a limited partnership Islam Labuan and limited liability partnerships Islam Labuan cannot conduct any activities that do not comply with Shariah principles.


PART XI SELF-REGULATORY ORGANIZATION ISLAMIC Declaration or recognition of self-regulatory organization Islamic 113. (1) 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 of Islam 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 that are consistent with this Act and any enactment applicable to the industry or sector , or any part thereof;

(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 shall be exercised by him, as a self-regulatory organization including dealing with violations of Islamic law or standards and guidelines applicable;
Financial services and securities Islam Labuan 151 (c) make no distinction in unreasonable of someone in offering access to its services or in the exercise of its functions as a self-regulatory organization Islam;

(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 as defined in the rules prescribed by the Board.

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

(3) an arrangement referred to in subsection (2), shall provide for — (a) any of the powers or functions delegated to the self-regulatory organization Islam under subsection (2);

(b) the terms and conditions with which the authority or such functions have been delegated and may be exercised by self-regulatory organization Islam;

(c) an authorized person to carry out the representation on behalf of the self-regulatory organization of Islam; and (d) the submission of periodic reports to the Board in respect of the exercise of the powers or functions delegated by the self-regulatory organization of Islam.



152 laws of Malaysia ACT 705 rules self-regulatory organization Islamic 114. (1) a self-regulatory organization Islam can 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 Islam has the function of regulation or supervision, including any function delegated to it Board.

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

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

(4) the rules of a self-regulatory organization Islam can provide about the shareholding and voting rights in Islamic self-regulatory organization that best interest of the members of the self-regulatory organization, Muslim consumers, investors and users of their services.


Restrictions on manufacturing decision 115. A self-regulatory organization Islam cannot make a decision under kaedah-kaedahnya that affect a person's rights unless — (a) self-regulatory organization Islam has given the person an opportunity to make representations about that; or financial services and securities Islam Labuan 153 (b) self-regulatory organization Islam considers, on reasonable grounds, that any delay in making the decision will harm a user class, investors or members of the industry or sector, as applicable.


Obligations for and in respect of the officer of a self-regulatory organization Islam 116. A self-regulatory organization shall notify the Board of the Islamic, 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 self-regulatory organization of Islam.


The power to direct the self-regulatory organization Islamic 117. (1) the Board may, after giving a self-regulatory organization chance Islam to make representations about that, give an instruction to self-regulatory organization Islam — (a) suspend, for the period specified in the directive, certain provisions of its Constitution or methodology-his model;

(b) requiring, subject to the companies act of Labuan 1990 or any other laws, amended its Constitution as stated in the instructions for the menyelaraskannya with this Act, any regulations made under this Act or any rules made by the Board;

154 the laws of Malaysia ACT 705 (c) which requires the amendment of kaedah-kaedahnya as stated in the instructions for menyelaraskannya with the relevant Act; or (d) for the implementation or enforcement of its Constitution or kaedah-kaedahnya.

(2) subsection (1) cannot limit the directions that may be given by the Board to a self-regulatory organization of Islam.


Termination of arrangements and cancellation declaration or recognition of 118. (1) the Board may revoke a declaration or recognition if — (a) self-regulatory organization Islam has failed to start operations within three months after an arrangement under this section has been made;

(b) the Board is not satisfied that the self-regulatory organization Islam is implementing properly or may 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 violation of Islamic material of an arrangement or the relevant Act or other applicable law;


(d) it appears to the Board that the self-regulatory organization that is involved in the crime Islamic finance; or (e) self-regulatory organization Islam does not comply with the instructions of the Board.

Financial services and securities Islam Labuan 155 (2) the Board may not cancel a declaration or recognition unless the Board has told Islamic self-regulatory organization of his intention and the reason for the action of the Board, and gave a self-regulatory organization Islam a reasonable opportunity to make representations to the Board.

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


Amendments to the Constitution of the self-regulatory organization Islamic 119. Notwithstanding section 24 of the Act, a company's Labuan 1990 amendments to the constituent documents of a self-regulatory organization Islam cannot be effective unless it is approved by the Board.


Cover for self-regulatory organization Islamic 120. A self-regulatory organization Islam, officer or employee of self-regulatory organization Muslim or a member of a Committee of a self-regulatory organization Islam cannot be liable for any losses incurred by or damage caused to any person as a result of anything done or omitted to be done by him in the execution of, in good faith, their functions and duties related to regulatory or supervisory functions of self-regulatory organization Islam , including the functions delegated to it by the Board.


The financial statements of a self-regulatory organization Muslim 121. (1) within six months after the end of each financial year, the self-regulatory organization shall file with the Board of Islam a copy, certified by the Secretary of the 156 laws of Malaysia ACT 705 as true copies of the financial statements, self-regulatory organization Islam for that year provided 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 Islam that could potentially affect the ability of self-regulatory organization Islam as a going concern;

(b) a self-regulatory organization Islam may have violated this Act, any regulations made under this Act, any guidelines 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) shall not be a breach of the duty of the Auditors.




Financial services and securities Islam Labuan 157 Power Board in respect of self-regulatory organization Islamic 122. For the purposes of this section, of the powers conferred to the Board under section 117 shall apply also in respect of any corporation or organization declared or recognized by the Board as a self-regulatory organization Islam under section 113.


PART XII GENERAL Appeal 123. (1) any person aggrieved by the decision of the Board to reject an application for a licence or registration or cancelling a licence or registration under this Act, may, within thirty days from the day the decision notified to him, appeal to the Board in writing.

(2) the Board shall, after considering an appeal under subsection (1), make a 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), shall within thirty days from the day the decision is communicated to him, appeal to the Minister in writing that can confirm, alter or reverse the decision, and the decision of the Minister shall be final.

(4) for the avoidance of doubt, an appeal is made under subsection (1) and (3), does not suspend the decision the appeal is being made against him.



158 the laws of Malaysia ACT 705 cancellation of permission, license or registration of 124. (1) the Board may revoke any authorization, licence or registration made under this Act — (a) upon request of a licensed entity;

(b) if the licensed entity — (i) has been stalled from running business in or from within Labuan;

(ii) has violated any provision of this Act or of any other terms, conditions, restrictions or limitations that are included along with the licence or registration, as the case may be;

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

(iv) has been charged with or convicted of an offence under this Act or criminal offence in any country or jurisdiction is recognised;

(v) has knowingly and willfully provide information that is false, misleading or inaccurate or not to disclose the information required under this Act;

Financial services and securities Islam Labuan 159 (vi) doing business in such manner as the Board reasonably believes would be prejudicial to the public interest;

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

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

(ix) in connection with licensee Islamic banks or licensee takaful, any warranty or undertaking referred to in section 63, 64, 78 and 79 which have not been amortised; or (x) for any other reason as it deems fit by the Board in its absolute discretion.


Cancellation procedures 125. (1) prior to cancel any licence or registration under section 124, the Board shall — (a) give written notice to the licensed entity regarding the reason for which the Board intends to do so;

(b) provide the licensed entities an opportunity to make written representations to her within three

30 days after receipt of the notice; and (c) considering the representations of it.

(2) if the Board revoke any licence or registration under section 124, the Board shall give written notice to the licensed entities about the revocation and cancellation of 160 laws of Malaysia ACT 705 it shall become effective on the date specified in the notice.

(3) if the revocation is about a licence takaful or Islamic bank licence, the Board shall, as soon as practicable, publish in a newspaper widely distributed in Malaysia and one international financial newspaper a notice about every revocation of a license or license takaful Islamic banks, 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.


Surrendering a license 126. (1) subject to this section, a licensee Islamic banks or licensee takaful can surrender his/her license.

(2) any licensee Islamic banks or licensee of takaful intends to surrender his/her license shall obtain the prior approval of the Board.

(3) the Board shall give its approval if it is satisfied that the licensee Islamic banks or licensee the takaful has made adequate provision in respect of all liabilities, and thereafter shall specify a date the surrender takes effect.

(4) where the Board's approval has been obtained under subsection (3), the licensee of bank Islam or licensee takaful shall, not later than twenty-one days before the date fixed under subsection (3), post an ad about surrendering his/her license proposed that in at least one newspaper of Malaysia circulated widely in Malaysia and another international financial newspaper.

Financial services and securities Islam Labuan 161 (5) the Board may, with as soon as practicable, publish in a newspaper widely distributed in Malaysia and one international financial newspaper a notice for every surrender of a licence 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 surrender.

(6) any licensee Islamic banks or takaful licensee licensed under this Act shall surrender his/her license by giving fourteen days notice to the Board prior to the surrender.


Consequences of revocation and surrender of licences 127. (1) if the revocation of a licence or registration under section 124 or surrender of the licence or registration under section 126 has been in force, the licensed entities shall, from the date of revocation or surrendering it under no circumstances cause, ceases to carry on any business further.

(2) Notwithstanding subsection (1), if a licensed entity continued to exist as a corporation after the cancellation or surrender of his/her license comes into operation, the Minister may, on the recommendation of the Board, to authorize in writing to the licensed entity to continue to carry out its business activities to any extent and for such period of time as may be specified by the Minister in the truth for the purpose of winding up its affairs or for the purpose of explaining the policy owner claims , other clients or creditors.

(3) every licensed entities whose licences have been revoked or surrendered shall continue to be subject to the provisions of this Act so long as its liability is not paid or is not otherwise provided for.



162 the laws of Malaysia ACT 705 business Transfer 128. (1) for the purposes of this section, any reference to "pemindah" shall refer to entities licensed under part VI or VII that moves its business that requires it is licensed under this Act and "transferee" shall refer to licensed entities licensed to conduct business, receive transfers from pemindah.

(2) the whole or any part of a person's business pemindah can be transferred to the transferee if the transfer is effected through a scheme under this section.

(3) a scheme under this section cannot make provision for business pemindah is transferred to a person who has not yet been licensed to do business under this Act or that exist yet except where expressly provided in the scheme that the scheme shall come into force only when the person is licensed.

(4) a scheme under this section may include provisions for matters incidental to the transfer undertaken and provisions to give effect to the transfer, and in particular may include provision for — (a) any property, rights or liabilities of the transfer, vested, by virtue of the scheme and without further assurance at the transferee;

(b) in the case of the transfer of a registration policy of takaful business, transferred by the transferee, for the amount to be included in respect of the policy into the takaful fund operated by the transferee and for other matters arising under this Act of the transfer;

Financial services and securities Islam Labuan 163 (c) the continuation by or against the transferee, any legal proceedings pending or against the pemindah;

(d) the dissolution without liquidation, of the pemindah; or (e) any matter incidental, consequential and supplementary necessary to ensure that such schemes are carried out properly and effectively.

(5) a scheme under this section shall not have effect unless the scheme 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 scheme 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 a 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 specified, on the intention to make an 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 the copy shall be open to inspection by all its members and policy owner affected by the scheme.

164 the laws of Malaysia ACT 705 (7) in addition to subsection (6), in respect of the transfer scheme, the provisions of the takaful business the following 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 adequate to express the opinion of the actuary of the possible impact of such schemes on the policy owner the parties to the scheme in respect of any transfer of the family takaful business;

(c) each party to the scheme shall give a copy of the report referred to in paragraph (b) to any person requesting the copy at any time before the Court verifies such schemes; and (d) the Board may cause a report on the scheme made by an 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 party.

(8) a copy of any scheme and report as is mentioned 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 in that behalf otherwise directs, be sent by each party to the scheme to each policy owner affected by the scheme.

(9) the parties to the scheme shall be liable in association and several Board to repay any costs or expenses incurred by the Board under this section in relation to the scheme; and the scheme shall include provisions on how the liability to be borne between the parties: financial services and 165 Labuan Islamic securities provided that if the Court were to make any order as to costs, the cost to be paid back to the Board shall not exceed the amount specified in the order.

(10) the Board may approve or reject a scheme.

(11) after a scheme has been approved by the Board under subsection (10), an application may be made to the Court in association by means of the ex parte originating summons by the parties to the scheme for a court order to confirm the approved schemes and to facilitate or enable such schemes are given effect.

(12) an application to the Court in respect of any matter relating to a scheme 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 certify the scheme.

(14) a scheme which has been endorsed by the Court under subsection (13) shall have effect in accordance with its meaning notwithstanding anything contained in the previous section of this Act and shall be binding on any person affected thereby.

(15) when the scheme is verified, each party to such schemes shall, unless the parties an unincorporated company, filing a copy of the scheme with the Board and with the regulatory authorities in the country where it was established or originated.

(16) the transferee shall, within one month after the scheme comes into operation, lodge with the Board — 166 laws of Malaysia ACT 705 (a) the statement of assets and liabilities of each party to the scheme, in so far as at the time immediately before the transfer, signed on behalf of it;

(b) a copy of the scheme as confirmed by the Court and a copy of the sealed court order confirming such schemes; and (c) a declaration made by the Chairman of the Board of directors or by the transferee, his/her principal officer in Labuan, which States fully every payment made or to be made to any person by reason of the transfer, and stating that, during which he, no payment other than payments specified have been, or will be made, by reason of the transfer by or with the knowledge of the parties to the scheme.

(17) Pemindah shall lodge, 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 scheme approved by the Board under subsection (10), with the relevant authorities, if any, in respect of registration or recording transactions in any movable property or interest in property transferred in accordance with the order.

(18) If an order of the Court under subsection (11) vest any alienated lands, or any share or interest on land alienated, at transferee — (a) the Court shall, if the alienated lands are in Peninsular Malaysia, pursuant to subsection 420 (2) national land code [Act 56/1965] causes a copy of the order is delivered to the Registrar of Land Titles or the administrator, as the case may be , immediately after the financial services and securities Islam Labuan 167 manufacturing the order so that the Registrar of titles or land administrator, as the case may be, to implement subsection 420 (2), (3) and (4) the national land code;

(b) if the land give the title are in Sabah, the transferee shall, as soon as practicable after the order is made, submit 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 transferee as provided under the Sabah Land Ordinance [Sabah Cap. 68]; or (c) if the alienated land is in Sarawak, transferee shall, as soon as practicable after the order is made, submit a copy of the order certified to the Registrar for the registration of land alienated vesting date or registration section or interest about the alienated land as provided under section 171 of the Sarawak land code [Sarawak Cap. 81].


(19) an order of the Court under subsection (1) may be related to any property or business pemindah outside Malaysia and, if it's really relevant, effect may be given to him either by any reciprocal arrangements relating to the enforcement of judgments that exist between Malaysia and the other country, territory or place outside Malaysia in which the property or the business or if there such arrangements, in accordance with the laws applicable in the country, territory or place it.

(20) in this section, "the parties to the scheme" means the pemindah and transferee and "parties to a scheme" shall be construed accordingly.

168 the laws of Malaysia ACT additional Licensing Requirements for 705 licensee bank Islam and takaful 129 licensees. The Board cannot approve an application for a license the takaful or Islamic banking by any applicant under this Act unless it is satisfied that — (a) goals and business operations the applicants intend to run will not involve any elements that do not comply with Shariah principles; and (b) there is, in the matter of the applicant associations, provision for the establishment of Shariah Advisory Board to advise the applicant of the Interior of its business operations to ensure that pengoperasiannya does not involve any elements that do not comply with Shariah principles.


The establishment of the Advisory Board of internal licensee Shariah Islamic securities and fund managers 130. (1) every licensee of Islamic securities, fund managers and regulated under part IV, shall appoint a qualified person to fill their internal Shariah Advisory Board, respectively, and shall notify the Board in writing of the appointment.

(2) Notwithstanding the appointment under subsection (1), the Board shall have power at any time after the appointment to require any licensee or Islamic securities, fund managers which are regulated under part IV, by notification in writing to the licensee of Islamic securities or the Fund Manager, to replace any member of the Advisory Board of internal licensee Shariah Islamic securities or Fund Manager with another person qualifying satisfaction of the Board.

Financial services and securities Labuan Islamic Shariah 169 for amanah Islamic Islamic Foundation of Labuan, Labuan, Labuan Islamic limited partnership or limited liability partnerships Islam Labuan 131. (1) the Trustees of the trust Islam Labuan under this Act shall appoint a person qualified as Shariah, or consult a qualified person, to advise the trustee on the Administration and operation of Labuan Islamic trust and ensuring compliance with Shariah principles.

(2) Partner-partner for sharing limited Islam Labuan or Labuan Islamic limited liability partnership under this Act shall appoint a person qualified as Shariah, or consult with a person who is qualified, who shall advise the partnership limited Islam Labuan or Labuan Islamic limited liability partnerships about the management and operation of limited partnership Labuan Islamic or Muslim limited liability partnerships and ensure compliance with Shariah principles.

(3) an officer of the Islamic Foundation of Labuan under this Act shall appoint a qualified person as Shariah, or consult a qualified person, who shall advise the Labuan Islamic Foundation about the management and operation of the Islamic Foundation of Labuan and ensure compliance with Shariah principles.

(4) Notwithstanding subsection (1), (2) and (3), the Board shall have power at any time after any appointing a Shariah Advisor it, require any trust Labuan limited partnerships of Islam, Islam Labuan or Labuan Islamic limited liability partnerships or Labuan Islamic Foundation, by notification in writing to replace the Shariah with other qualified people to the satisfaction of the Board.

(5) Notwithstanding subsection (1), (2) and (3), the Board may determine that an Islamic Shariah Advisory trust limited partnership Islam Labuan Labuan, limited liability partnerships 170 Islamic laws of Malaysia ACT 705 Labuan or Labuan Islamic Foundation to conduct a systematic review of Shariah compliance for internal business and operation of the trust Islam Labuan, Labuan Islamic limited partnerships, limited liability partnerships Islam Labuan or Labuan Islamic Foundation.


Shariah compliance review internal 132. Shariah Advisory Board for a licensee's internal bank Islam takaful licensee, licensee of Islamic securities, fund managers and regulated under part IV, shall conduct an internal review of the business and operations, bank Islam licensee, licensee of takaful, licensee of Islamic securities, fund managers and regulated under part IV, as may be determined by the Board from time to time for the purpose of determining whether the business and operation comply with Shariah principles.


Shariah compliance review external 133. (1) a licensee Islamic banks, takaful licensee, licensee of Islamic securities, fund managers and regulated under part IV, may employ, in addition to its internal Shariah Advisory Board, a person who is qualified to conduct an external review of the business and its operations at its sole discretion for the purpose of determining whether the business and operations comply with Shariah principles, and licensee bank Islam , a licensee of takaful, licensee of Islamic securities, fund managers and regulated under part IV, are required to employ the qualified person to conduct the review after are required to do so by the Board through a command that such purpose, issued to the licensee Islamic banks, takaful licensee, licensee of Islamic securities, fund managers and regulated under part IV.


Financial services and securities Islam Labuan 171 (2) licensee Islamic banks, takaful licensee, licensee of Islamic securities, fund managers and regulated under part IV, shall deliver a report containing the results of the review of the Shariah Advisory Board internal referred to in subsection (1), as part of

presentation of the financial statements of bank Islam's licensees, licensees of takaful, bank Islam and licensees, the Fund Manager who is regulated under part IV, to the Board under this Act or under the relevant Act, as the case may be.


134. Internal audit (1) every licensee bank Islam and takaful licensee shall conduct an internal audit for his book and its operations as determined by the Board from time to time and shall submit to the Board an internal audit reports shall include a report of the system of accounting and control of the licensee.

(2) an internal auditor appointed by the licensee Islamic banks or licensee takaful to carry an internal audit for his book and operating under subsection (1) shall, for the purposes of this section be deemed as an official licensee of bank Islam or licensee and shall, at all times, subject to the requirements of section 139.

(3) an internal audit can be carried out by any person except the external auditors for licensee Islamic banks or licensee takaful, as the case may be, under section 135.

(4) an internal auditor shall be immediately reported to the Board if, during the journey, whose work as an internal auditor for licensee Islamic banks or licensee takaful, he is satisfied that — 172 laws of Malaysia ACT 705 (a) there had been a violation of the provisions of this Act or that an offence under any written law was committed by the licensee or licensees of bank Islam takaful or any of its officers or employees; or (b) any harmful ketidakteraturan interest creditors the licensee Islamic banks or takaful, or licensees, in the case of licensees takaful, 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 135. (1) every licensed entities shall appoint an external auditor each year before any date or within such period as may be determined by the Board.

(2) an auditor appointed under subsection (1) shall carry out an audit for a licensed entity in respect of the conduct of its business, and shall submit a report of the audit together with the review of the system of accounting and control of the licensed entity to the participant entities licensed and to the Board.

(3) the Board may, at any time, require a person the auditors appointed under this section to submit to the Board any clarification in connection with its audit, as determined by the Board.

(4) an auditor shall be immediately reported to the Board, if, in the course of his duties as an auditor licensed entities, he is satisfied that — financial services and securities Islam Labuan 173 (a) there is a breach of the provisions of any part of this Act or that an offence under any written law was done by a licensed entity or any of its employees; or (b) any harmful ketidakteraturan policy owner's interest (in the case of an entity licensed under part VII), or the licensed entities, creditor or any other serious, ketidakteraturan has occurred.

(5) for the purposes of this section, the Board shall maintain a list of Auditors.

(6) any person who contravenes 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.


Payment system 136. (1) No person shall — (a) start to handle any payment system in, from or through Labuan; or (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, 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.

174 the laws of Malaysia ACT 705 (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 of , and can also make any examination of the premises, equipment, machines, books or documents, accounts and other transactions relating to the payment system as may be thought fit 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 such schemes or may approve the scheme, 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 may when assigning any permission under this section, impose any restrictions, limitations, or conditions as it thinks fit.

(4) Notwithstanding anything contained in any permission given, or in any scheme or an approved document, under subsection (3), any 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, examine the financial services and securities Islam Labuan 175 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 that may absolutely deem 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 sentence.

(9) for the avoidance of doubt, no licensed institution Islam Labuan can be given approval to handle any payment system under this section.


Accounts and records of 137. (1) an entity licensed under this Act shall cause to be kept the accounting and other records that should have been that transaksinya can explain and disclose with reasonable accuracy at any time, the financial position of the licensed entities.

(2) every licensed entities and its Director shall cause the appropriate entries to be made in the record of 176 laws of Malaysia ACT 705 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, the Director may think fit and such licensed entity shall be at all times open to inspection by any Director and shall be kept in such manner as to enable the records easily and should be audited.

(4) the Board may, in any particular case, direct that the accounting records or other records of a licensed entity is open for inspection of Auditors acting on behalf of a person of the Director, but only on a written undertaking given to the Directors that the information obtained by the auditors during its inspection should 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 the action sengajanya, resulted in default by the licensed entities under this section, commits an offence under this Act.

(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 financial services and securities Islam Labuan 177 (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.


Inspection and review of the books and documents of the licensed entities 138. (1) the Board may, from time to time — (a) examine and review and books or other documents, accounts and transactions of any licensed entity; or (b) obtain from any licensed entities, require any licensed entity to the Board, provide 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 entities shall cooperate and bantuannya to the Board to facilitate any inspections carried out under paragraphs (1) (a).

178 the laws of Malaysia ACT 139 705 Confidentiality. (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) the Islamic mutual funds under part IV;

(b) any licensee customers bank Islam under part VI;

(c) any policy owner under part VII;

(d) self-regulatory organization Islam established under Part XI;

(e) any entity licensed under this Act.

(2) subsection (1) shall not apply to — (a) any disclosure required by valid in law under section 28B Labuan financial services Board Act 1996 or under section 22 Labuan business activity Tax Act 1990 [Act 445];

(b) any disclosure required under a court order made through the applicant exparte, provided that those who disclose relevant information shall notify the person affected by the order and after notification is received, the person affected may file an application to be to court to dispute the order or otherwise comply with such order accordingly;
Financial services and securities Islam Labuan 179 (c) regarding information relating to Islamic mutual funds under part IV, consent

writing of the Muslim advance mutual funds and investors concerned;

(d) regarding information relating to customers of bank Islam licensees under part VI, with the written consent of the relevant customer or his/her;

(e) about the information policy owner under part VII, with the written consent of the owner of the relevant policy or his/her or during travel resignation retakaful business; and (f) with regard to information relating to licensed entities, 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.

(4) all proceedings, except in criminal proceedings, in relation to a breach 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), no nothing in this section may limit any power conferred upon the Court or hakimnya by Bankers Book Act (Description) 1949 [Act 33] or prohibit compliance order made under the Act.
180 laws of Malaysia ACT 705 (6) section 7 of the Act Book Banker (Description) 1949 shall not apply to the licensee bank Islam under part VI, its directors or 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.


Confidentiality in respect of the Supervisory Council of the Shariah 140. (1) no Member, officer, agent or servants Shariah Advisory Council or people who have in any way access to any records, books, registers, letters-correspondence, documents, materials or information relating to the business and Affairs of the Syariah Supervisory Council in the implementation of the obligations or the exercise of its functions, may give, open, reveal, publish or otherwise disclose to any person any records, books, registers, correspondence , document, material or information unless legally required to do so by any court or under any written law.

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


Translation of 141. If any instrument or document required so 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.


Financial services and securities Islam Labuan 181 application of * the Exchange Control Act 1953 142. (1) subject to subsection (2) and (3), no nothing in this Act shall affect the provisions of * the Exchange Control Act 1953 and the application of any provision of this Act for a person or licensee Islamic banks, the provision shall apply subject to the provisions of * the Exchange Control Act 1953.

(2) if there is any conflict or inconsistency between the provisions of this Act with the provisions * the Exchange Control Act 1953, the provisions * the Exchange Control Act 1953 shall apply.

(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 * the Exchange Control Act 1953.


Application of the capital markets and Services Act 2007 143. (1) subject to subsection (2) and (3), no nothing in this Act shall affect the provisions of the capital markets and Services Act 2007 and the application of any provision of this Act for any person, the provision shall apply subject to the provisions of 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 Act and Perkhidmatan2007, the provisions of the capital markets and Services Act 2007 shall apply.

* NOTE — the Exchange Control Act 1953 [Act 17] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 of the Act 758.


182 the laws of Malaysia ACT 705 (3) the provisions of the capital markets and Services Act 2007 does not apply for a licensed entity with respect to any transaction or activity which forms part of its activities licensed under this Act, when a transaction or activity is carried out in Labuan or outside Malaysia.


Application of the companies Act 1990 Labuan and the companies Act 1965 144. (1) in addition to, and without reducing the provisions of this Act — (a) of the Labuan 1990 shall apply to — (i) licensee bank Islam under this part who is not a licensee of bank Islam Malaysia; and (ii) licensee of takaful is Labuan or Labuan foreign companies; and (b) of the companies Act, 1965 shall apply to — (i) licensee bank Islam Malaysia which is the Office of a bank established under the Act; and (ii) licensee of takaful is a branch of a Malaysian takaful operator.

(2) if there is any conflict or inconsistency between the provisions of this Act with the Act referred to in subsection (1) in the application of their respective licensed entities, respectively, the provisions of this Act shall apply.

(3) if there is any difficulty or doubt arising in the application of subsection (1) in relation to any financial services and securities Islam Labuan 183 specific licensee, or any matter or thing under certain circumstances, or in General, the Board may resolve it with issue instructions in writing.


Application of the Labuan financial services Board Act 1996


145. In the event of any inconsistency between any of the provisions of this Act with the provisions in the Act of Labuan financial services Board Act 1996, the Labuan financial services 1966 shall apply.


Disapplication of certain law 146. (1) no holder of Islamic banks may, in respect of any business carried out by the holder of such licence, made subject to any provisions * of the banking and financial institutions Act 1989 and * * the Islamic Banking Act 1983.

(2) No licensee takaful can, with respect to any business carried out by the holder of a licence under part VII, reservations are made subject to any provisions * * * the Insurance Act 1996 [Act 553] and † Takaful Act 1984.


Protection against legal and legal proceedings 147. (1) no action, suit, prosecution or other proceedings may be taken or brought, instituted or maintained in any * 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 of the Act 758. ** The ENTRIES — the Islamic Banking Act 1983 [Act 276] was repealed by the Islamic financial services Act 2013 [Act 759] — see section 282 of the Act 759. NOTE — the Insurance Act 1996 [Act 553] has been repealed by the Financial Services Act 2013 [Act 758] — see section 271 of the Act 758. † ENTRIES — the Takaful Act 1984 [Act 312] was repealed by the Islamic financial services Act 2013 [Act 759] — see section 282 of the Act 759.

184 the laws of Malaysia ACT 705 which court or any other tribunal to any person the following: (a) the Minister;

(b) the Board, any officer who is given power, agents or servants of the Board;

(c) any Member, officer or Committee of the Board;

(d) Shariah Supervisory Council; and (e) 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 respect of 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.

(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 a public officer or a person employed or taken public services for carrying out their duties.

(3) the Public authorities Protection Act 1948 shall apply to any action, suit, prosecution or proceeding of the Board or to any member of the Board, financial services and securities Islam Labuan 185 of any member of the Committee, or any of its officers, servants or agents of the Board in respect of any act, neglect, default made or left from made by him on such properties.


Penalties am 148. (1) any person guilty of an offence under this Act or any regulations made under this Act for which no penalty expressly provided shall, on conviction of — (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.

(2) in the case of a continuing offence, shall, in addition, a daily fine not exceeding five thousand dollars for each day the offence continues to do.


Offences by body corporate 149. If a body corporate commits an offence under this Act or any regulations made under this Act, any person who, at the time the occurrence of the offence was a Director, Manager, Secretary or other similar officer or purporting to act on any such properties — (a) can be prosecuted separately or in association in the same proceedings with the body corporate;
and 186 laws of Malaysia ACT 705 (b) if the body corporate were found guilty of that offence, shall be deemed to have committed the offence unless, after paying attention 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 fees and license 150. (1) the Board may set the annual fee, licence or registration by regulations in respect of the activities of an entity licensed or registered or other activities under this Act.

(2) such Fees as may be prescribed shall be payable on or before January 15 of each year following the year that any permissions, licenses or registration granted.

(3) the fee is not paid may be sued thereon by the Board, through the action as a civil debt.

(4) any fees and penalties collected by or paid to the Board under this Act shall form part of and be credited to the Fund established under section 29 of Labuan Financial Services Act 1996.


Procedure where no specified 151. In the event of any act or step required or allowed to be done or taken under this Act and no financial services and securities Islam Labuan 187 forms or procedures mentioned either in the Act or regulations made under this Act, the application may be made to the Board for instructions about how to act or the move may be made or taken, and any act or move made or taken in accordance with the instructions shall be valid for the execution of the Act or the move.


Misstatement 152. 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 under this Act;


(b) make any statement or provide any information required under this Act that he knows to be false or misleading;

(c) knowingly don't disclose any facts or information that are required to be disclosed under this Act; or (d) have custody over or have ownership or control, alone or with another person or with a few others, any information, record, book or other document referred to in the provisions of this Act refuses or willfully ignore to comply with any direction valid in law granted under such provisions, commits an offence under this Act and may , on conviction, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years or to both.

188 the laws of Malaysia ACT 705 153 Enforcement. (1) where — (a) a licensed entities are insolvent or likely to become unable to meet all or any of its obligations or almost suspend payment at any point; or (b) any licensed entities, their principal officer, an officer or any person like that doing business in such manner as the Board reasonably believes as harmful to the interests of beneficiary, investors, creditors or any other similar stakeholders; or (c) any licensed entities, their principal officer, an officer or any person like the other 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 licensed entity principal officer, official, or any other such person 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 financial services and securities Islam Labuan 189 (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 for the licensed entity.

(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 154. (1) the Board may, with the written consent of the public prosecutor, mengkompaunkan any offence committed by any person under this Act by making an offer in writing to that person to compound the offence upon 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 for 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 extended period as may be conferred by the Board, a prosecution for the offence may be commenced at any time after that to the person to whom the offer is made.

(4) If an offence has been compounded under subsection (1), no prosecution shall be instituted subsequently in respect of offences against the person to whom the offer to compound has been made.
190 the laws of Malaysia ACT 705 (5) any money received by the Board under this section shall be paid into and form part of the Fund established under section 29 of Labuan Financial Services Act 1996.


Delivery of document 155. (1) any document or notice required to be delivered by the Board to the licensed entity, Islamic mutual funds, trust Islam Labuan, Labuan Islamic Foundation, partnership limited Islam Labuan, Labuan Islamic limited liability partnerships or self-regulatory organization may be served by leaving it on Islam at, or sending it by post to the registered office of the licensed entity, Islamic mutual funds, trust Islam Labuan, Labuan Islamic Foundation limited partnership, Islam Labuan, Labuan Islamic limited liability partnerships or self-regulatory organization Islam.

(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 the licensed entity, Islamic mutual funds, trust Islam Labuan, Labuan Islamic Foundation, partnership limited Islam Labuan, Labuan Islamic limited liability partnerships or self-regulatory organization of Islam.


Power of Minister to make regulations 156. The Minister may make regulations prescribing all matters and things required by the Act or assigned to carry out, or perform completely, the provisions of this Act.


Minister's power to issue instructions 157. (1) the Minister may, on the recommendation of the Board, issue a written by notification in the Gazette, a command — financial services and securities Islam Labuan 191 (a) which prohibits the establishment of any business or activity, including any business class or its activities; or (b) directing any licensed entity, to stop running its business or any part of its business either immediately or within such time as may be specified in the instructions.

(2) an order made under this section may be revoked or varied by the Minister.


Minister's power to amend Schedule 158. (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 in this Act and such, upon the publication of 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 dates as may be specified in the order.


(2) the Minister, in 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 159. The Minister may, on the recommendation of the Board, exclude any entity licensed regulated under this Act or any person or any class of persons or any class of licensee or entity regulated under this Act of any provision of this Act and may, in granting 192 laws of Malaysia ACT 705 such exemption, impose such terms and conditions as the Minister thinks fit.


Publication of Gazette notification, 160. Without prejudice to any other provisions of this Act, the Board shall, either as provided 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 content, notification or orders made it.


Savings and transitional 161. (1) all regulations, orders, instructions, notifications, exclusions and other subsidiary legislation, but that whatever is called, and all approvals, instructions, decisions, notifications, exclusions and other executive actions, whatever else is called, is made, given or done, under or by, or by virtue of any law relating to Labuan Islamic financial services before the commencement of this Act shall be deemed to have been made , given or done under, or by, or by virtue of, the provisions of equal in this Act, and shall remain in force and have effect in respect of the person to whom they apply until repealed, amended, deleted, revoked or replaced under, by or under the authority of, the provisions in this Act equivalent.

(2) every notice, instructions, guidelines or circulars issued by the Board or the Minister under any law relating to Labuan Islamic financial services before the commencement of this Act and in force immediately before the commencement of this Act, shall be deemed to have been lawfully issued under this Act the financial services and securities Islam Labuan 193 in relation to specific provisions of this Act equal to the matters dealt with in Directive , notices, guidelines or circulars that and shall remain in force and effect until it is amended, deleted or revoked under this Act.

(3) any application for an approval or consent, or for any other purpose whatsoever or any appeal relating to the application made by any person to the Minister or to the Board under any law relating to Labuan Islamic financial services before the commencement of this Act, and is pending immediately before the coming into operation of this Act , shall, if there is a corresponding provision in this Act, be dealt with as if it is made under the provision and, if there is no equivalent provision in this Act, the application or the appeal shall expire at the commencement of this Act.

(4) all transactions or business which executed or made with valid, and all matters lawfully incurred, under or in accordance with any written law relating to Labuan Islamic financial services before the commencement of this Act by a person approved or registered under any written law relating to Labuan Islamic financial services before the commencement of this Act , with any other person, shall be deemed to have been executed, made or done in accordance with applicable laws and lawful, under and in accordance with this Act, and, therefore, any right or liability under a transaction or business that, immediately before the coming into operation of this Act, shall be deemed to continue to be valid according to the law and valid under this Act.

(5) all legal proceedings, whether civil or criminal and agreement, contract or any other arrangement legally binding on other laws made by the Board, prior to the commencement of the financial services Board Act 194 laws of Malaysia ACT 705 Labuan (Amendment) 2008 [Act A1337], shall be deemed to have been made by the Board.

(6) for the avoidance of doubt, the name change to the Board cannot affect the identity of the Board or any right or obligation of the Board or make the flaw of any proceedings by or against the Board, and any legal proceedings that may be continued or commenced by or against the Board in the name of eternity may be continued or commenced by or against the Board with its new name.

(7) the Shariah Advisory Council of the existing Board who are appointed by the Board shall be deemed to have been appointed with valid and shall continue to perform the function for which it was appointed until a Shariah Supervisory Council appointed pursuant to section 7.

(8) any guidelines, instructions, guidelines, advice, notice or circular issued or any act or thing done by the Board in relation to the Islamic banking business of Labuan, Labuan takaful business or any other business that complies with Shariah principles and supervised and regulated by the Board shall be deemed to have been issued or effected by valid.















Financial services and securities Islam Labuan 195 FIRST SCHEDULE [subsection 2 (1); the definition of "Director"] is the first column (people) Second Space (Director) Third Space (established) the Fourth Space (participants) the Corporation a person holding office as a 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 shareholder Co-operatives incorporated replacement of a member of the Board of the organizing body or other such cooperative , regardless of its name called registered, incorporated or otherwise established in law as a cooperative member of the statutory body of a member of the Board, Committee, Council or other statutory bodies of the organizing body that, regardless of its name is called

its existence under laws that establish, appoint or membentuknya shareholders or, if the statutory body that does not have a share capital, a person as a whole, 196 laws of Malaysia ACT 705 the first column (people) Second Space (Director) Third Space (established) the Fourth Space (participant) separately or in association with others who have the statutory bodies to form partner Sharing Partnership limited partner general partner (or person who holds similar role) its formation or if registration or other forms of recording or recognition required prior to activity
or business can be started according to the law, registration, recording or recognition by-undangnya under applicable law partner of limited liability partnerships partner set (or person who holds similar role) its formation or if registration or other forms of recording or recognition required before the activity or business can be started according to the law, registration, a limited partner of the financial services and securities Islam Labuan 197 first column (people) Second Space (Director) Third Space (established) the Fourth Space (participant) of recording or legal recognition under undangnya law
applicable Ownership single single owner 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 of any single owner body, association or other group of persons whether incorporated or not incorporated any person having command or control over the management of its business affairs or if registration or other forms of recording or recognition required before the activity or business can be started in accordance with the
the law, registration, recording or member regardless of his name called for the body, association or group is 198 laws of Malaysia ACT 705 the first column (people) Second Space (Director) Third Space (established) the Fourth Space (participant) legal recognition of undangnya under the laws that apply in the SECOND SCHEDULE [subsection 2(1)] professional associations recognised in connection with actuarial qualifications in Actuarial Institute of England Faculty of Actuaries in Scotland Actuarial Societies in the United States the Institute of Actuaries Canadian Institute of Actuaries of Australia financial services and Islamic securities Labuan 199 THIRD SCHEDULE [section 74 and 87] financial information, statistics and information should be submitted to the Board section a: licensee bank Islam (a) financial statements within six months after the close of each financial year a licensee Islamic banks, or any further period as may be approved by the Board, the licensee Islamic banks 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, allocation and use of the money and the Auditors ' report.

(b) statistics and information (1) every licensee Islamic banks, at any frequency as determined by the Board from time to time, submit to the Board a statement showing the assets and liabilities of the licensee in relation to bank Islam Islamic banking business of Labuan Islamic investment banking business or Labuannya, as the case may be.

(2) a statement submitted under subsection (1) shall include — (a) a statement indicating the total amount of financing facilities granted by the bank Islam to licensees licensee customers that Islamic banks as determined by the Board;

(b) a statement that specifies the class, category or description of financing facilities granted and businesses or industries in which licensee customers bank Islam is involved;

(c) a statement indicating that the licensee bank Islam has complied with the requirements imposed upon it by section 74; and (d) any statement, document, information, or other statements of statistics as may be determined by the Board.

200 laws of Malaysia ACT 705 (3) Notwithstanding paragraph (2), the Board may publish any consolidated statement, with respect to any category, class or description of licensee bank as may be thought fit by the Board, with mengagregatkan figures in statement submitted under paragraph (1): provided that nothing-nothing in this subsection may empower the Board to prescribe any licensee certain Islamic banks to become a category , class or description of licensee Islamic banks for the purpose of this subsection.

(4) where any person is required by or under this section to produce, issue or give the Board such information, statistics, statement or document, the Board may menentukansupaya information, statistics, statement or document shall be presented, issued or given in such form and manner and within such period or at any interval or time, in accordance with any provision of this part or any regulation made under this Act , as stated by the Board in the determination; and that person cannot produce, issue or give as true or accurate such information, statistics, statement or document which he knows, or has reason to believe, as false, inaccurate and misleading.


Part B: takaful licensee (a) financial statements (1) every Labuan takaful operator shall, within six months after the close of each financial year or such extended period as may be approved by the Board, submit to the Board, with respect to the overall operations of takaful Labuannya carried out, four copies of each annual balance sheet, profit and loss account terauditnya, account as a result and, in respect of the family takaful business , a report stating the actuarial valuation of the assets and liabilities as may be approved in accordance with document konstituennya.


(2) every Labuan takaful operator 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 approval of that.

(3) every takaful operator Labuan Labuan is a foreign company shall, in addition to the financial statements that are required to be submitted to the Board under paragraph (1), submit also each year a copy of the certified balance sheet annual terauditnya that the overall operations both inside and outside the Labuan financial services and securities Islam Labuan 201 within three months after the balance sheet filed with the regulatory authorities in the country of establishment or originally.

(4) every licensed, Manager of takaful Labuan underwriting Manager of takaful takaful brokers licensed Labuan Labuan licensed shall, within six months after the close of each financial year or such extended period as may be 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 Board of takaful any document relating to its operations in such manner as may be 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.






202 the laws of MALAYSIA Act 705 FINANCIAL SERVICES and SECURITIES ACT of ISLAM LABUAN 2010 LIST AMENDMENT of laws that amend the short title effect from-no-203 laws of MALAYSIA Act 705 FINANCIAL SERVICES and SECURITIES ACT of ISLAM LABUAN 2010 LIST SECTION AMENDED Section Power amend with effect from-no-