Guide to Apply Labuan Securities License
Labuan securities licensee refers to a person who for valuable consideration provides investment advice or administrative services in respect of securities for purpose of investment and dealing in securities. For a Labuan Islamic securities licensee, its operations shall comply with Shariah principles.
Labuan securities license registered with under a Labuan Company is permissible to perform the following activities:
A. Investment Advisory
* Conducting securities analysis and making investment recommendations based on client’s investment objectives and financial situation
* Providing advice concerning securities including the issuance or promulgation of research report and analysis
* Providing consultancy and advisory services relating to corporate finance and financial planning matters for corporate clients
B. Administrative Services
Making submissions on behalf of clients to Labuan FSA in respect of securities including any other reporting requirements including issuing any documents which are deemed to be a prospectus.
C. Dealing in Securities
* Quoting two-way prices and dealing in securities
* Arranging for the sale or purchase of securities including that are not listed on a stock market of a stock exchange, issued by, belonging to or on behalf of clients
* Underwriting of securities and placement out of such underwritten securities to be commensurate with the adequacy of its financial resource
* Other dealing in securities as permitted by Labuan FSA.
D. Any other activity as may be permitted by Labuan FSA from time to time.
Tax for Labuan Securities License Company
All activities carried out by a licensed Labuan company are deemed as trading activities, hence, the profit tax will be 3% on profit as per audited account. There will be no tax on the loss incurred.
Criteria to apply for Labuan securities license Company
An individual who holds a relevant degree or professional qualification to carry in the capital market, fund management, securities advisory activities. Labuan FSA may also consider an applicant with at least a minimum qualification of diploma holder and three (3) years’ relevant experiences in capital market or direct experiences in fund management activities;
Other documents required for the application is as follows:
1. A business plan covering the business intentions, types of services to be provided, target market, three (3) years’ revenue projections and manpower, including the equity structure of the company in regard to the percentage of shareholding
2. Resume of all keys personnel with education certificates
3. Reference Letters for key personnel and relevant documents to proof fit and proper person
4. Personal financial statement able to demonstrate the existence of adequate financial resources and the continuing financial support for the business
5. Must have at least two directors in the company.
Subject to the merit of each application, additional information and documents may be requested by Labuan FSA to facilitate the processing of the application.
Operational Requirements of Labuan Securities License Company
1. To maintain a paid-up capital of at least RM150,000 equivalent in any foreign currency throughout its operations. In addition, based on the securities licensee’s risk management assessment, additional capital may need to be injected to commensurate its risk profile as well as the nature and complexity of its business
2. To maintain a professional indemnity insurance policy with coverage of not less than RM1 million or its equivalent in any foreign currency throughout its operations
3. To maintain an operational office in Labuan with a minimum of 2 staffs. You may establish a marketing office at Kuala Lumpur and/or Iskandar Malaysia
4. To ensure the compliance of the business is performed at all times
5. To establish adequate internal policies and procedures for its operations, compliance, internal controls, corporate governance, and risk management, including its business continuity plan. These have to be regularly reviewed to ensure that they remain appropriate, relevant and prudent
6. To ensure proper policies and procedures are in place to ensure a sound compliance framework which safeguards clients’ interests
7. To appoint an approved auditor to carry out an annual audit of its accounts and to be submitted within 6 months after the closure of the financial year
8. To ensure that its risk management plan also clearly sets out the extent of financial requirements to sustain its operational business based on the risk appetite or tolerance levels in relation to the fund management strategies. This has to be reviewed at least on a yearly basis in line with its business plan
9. To obtain prior approval from Labuan FSA on changes of its identity, place of business or office in Labuan or outside Labuan, ownership, and shareholding of the fund manager
10. To notify Labuan FSA in writing of any amendment or alteration to any of its constituent documents, or business plan within thirty (30) days of the changes being affected
11. To take reasonable care to organize and control its affairs responsibly and effectively, with adequate risk management and supervisory system
12. To establish proper compliance function to ensure its business complies with the relevant directive, guidelines and reporting requirements issued by Labuan FSA from time to time
14. To ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and Guidelines on Anti-Money Laundering and Counter Financing of Terrorism relevant to Labuan IBFC.
Fees for Labuan Securities License Company payable to Labuan FSA:
a. The annual license fee payable: RM5,000 upon approval valid till 31st December. For subsequent years, the annual fee is to be paid on or before 15 January of each calendar year
b. Marketing Office annual fee payable: RM7,500 payable upon approval valid until 31st December. For subsequent years, the annual fee is to be paid on or before 15 January of each year.
CP TRUST one-stop license application service level for Labuan Securities License include as follows:
* Consultation of your eligibility and procedures based on your profile
* Profiling, due diligence and guidance on the preparation of documents
* Preparation of Business Plan, Financial Forecast and Operation Manuals
* Submission and supervision of application process to approval
* Act as your liaison and contact point with Labuan FSA for all correspondence and arrange an interview (if any).
Labuan Securities License Application Timeframe:
1. 45 to 60 days depending on any inquiry by Labuan FSA during the approval processing stage
2. Key personnel may be interviewed by the Labuan FSA during the approving process.