Guide to Register Labuan Public Fund
Labuan Public Fund is applicable to securities that are offered for subscription to any member of the general public which has to be registered with the Labuan Financial Services Authority (Labuan FSA) with an approved prospectus of the public fund. You can choose to have your Public Fund via the Company structure of a normal Labuan Company or Protected Cell Company registered under the Labuan Companies Act 1990.
Guide to Register Labuan Public Fund-Operational Requirements
1. Must appoint a fund manager, trustee, administrator and custodian that are approved by Labuan FSA, they must be independent of each other.
2. If the fund is managed by a non-Labuan licensed fund manager, at least one of the service providers must be approved by Labuan FSA.
3. Maintain a registered office in Labuan with the appointment of a Trust Company as your Resident secretary.
4. All subscriptions shall be repaid immediately if the minimum level of subscription required is not met within the stipulated time.
5. Conduct its business with due diligence and sound principles with all Board Members being fit and proper persons in accordance with the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA.
6. Maintain proper accounting and other records of each transaction of its names and registration number, the financial position which has to be in line with the Directive on Accounts and Record-Keeping requirement issued by Labuan FSA. These records to be indicated clearly on its letterhead, stationery, and other documents.
7. To appoint an approved auditor to carry out an annual audit of the accounts with a submission of two copies of the audit report within 6 months after the close of financial year.
8. Provide half-yearly reporting to the investors, which includes portfolio valuation report showing portfolio mix, the net asset value of the investment with an independent verification for the existence of the fund’s assets and the fund’s performance.
9. To notify Labuan FSA within 30 days of any amendment of its constituent document and its business plan.
10. An approval is required from Labuan FSA for any change of the Board members and key personnel.
11. The requirement of an auditor to ensure all asset returned to investors to ensure ordering winding down of the matured fund.
12. Ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act and guidelines provided by Labuan FSA.
13. To ensure proper policies and procedures are in place with a sound compliance framework to safeguard investors’ interests at all times.
Guide to Register Labuan Public Fund- The Prospectus
The condition of the PROSPECTUS OF LABUAN PUBLIC FUND should provide full, true and plain disclosure of all facts and circumstances aimed to provide a reasonable assessment by a prospective investor in determining whether to subscribe to the public fund and the prospectus must disclose and contain the following information:-
1. Description of the fund to include the date of issuance, mandate/objective, legal form and structure, tenure, target fund size, and geographical focus.
2. The prospectus must be in the national language of Malaysia or English language.
3. Information on the full details of the experience, the terms of appointment and termination of the Board members, key personnel, managers, custodian and trustee of the fund, whichever applicable.
4. The Board members’ and key personnel particulars’ must include the following information:
a.Any shares held by them in the fund.
b.Any borrowings are given by them to the fund.
c.Any other obligations of the fund to them.
d.Profile of the qualified person as its Shariah adviser for Labuan Islamic Public Fund.
5. The capital and income distribution policy of the fund.
6. A statement in the prospectus to contain the following:
“Labuan FSA takes no responsibility for the contents of this prospectus, makes no representations as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon any part of the contents of this prospectus.
An investor is advised to clearly understand the risk(s) of the investment, seek professional consultancy, if necessary and request for sufficient information to enable them to make a reasonable evaluation of the investment.”
7. The investment strategy to include the investment policies and objectives and type of securities in which the fund intends to invest.
8. The names of all underwriters and amount proposed to be underwritten by each underwriter.
9. Name the key features of the public fund to facilitate an investor in considering and comparing any similar investments on offer with the following information:
a. Issue price of the shares.
b. Type of expenses to be incurred by the fund.
C. Potential risks may be involved in investing the fund.
d. The extent to which it intends to invest in derivatives and unlisted securities. If it is intended for the fund not to invest in any of such investments, the prospectus must include an appropriate statement to that effect.
e. The investment and borrowing limitations of the fund. This should include an analysis of the risks by its nature including the risks of the country and region where the fund intends to invest, if applicable.
10. Financial results and projections with cash flows and profits based on its fund nature, investment policies and objectives, the proposed minimum subscription proceeds net of costs including the underwriting fees. Must have a clear policy on submission of financial reports including interim results and annual financial statements of the fund to its subscribers.
11. Asset Valuation Policy including the financial reporting standards used in for the preparation of the financial statements and the methods on valuing all the assets.
12. Investor Care Framework to cover the following areas:-
a. Rights of investors as stipulated in sections 36 of LFSSA or section 41 of LIFSSA guidelines.
b. All fees and costs that will be borne by all the investors.
c. Disclosure policy on conflict of interest for investor protection.
d. Complaint handling process.
e. Related party transaction policy including its disclosure policy.
13. Redemption policy to include information of procedure for redemption, timing, events where redemption right is suspended and pricing redemption or subscription of unit/shares of the fund.
14. Material changes that affect any of the matters required to be disclosed in the prospectus and the fund manager shall within 30 days incorporate such changes to the prospectus and provide a copy of the supplementary/amended prospectus to each of investors and Labuan FSA.
Note: For Labuan Islamic public fund, the description must state that the fund shall only participate in operations, administrations, investments and all other activities in compliance with Shariah principles. The details of taxes or zakat to be levied on income and/or capital of the fund and any taxes or zakat to be deducted from distributions to shareholders to be disclosed.
The Investment and Borrowing Limitation of Labuan Public Fund
Labuan public funds are required to establish investment and borrowing limitations of its fund with a comprehensive and clear statement of the risks involved. The investment and borrowing limitations of the fund must be detailed defined and approved by the Board members or fund manager and it must then be disclosed in the constituent document/prospectus. If any of the limits on investment and borrowing is breached, the Board of the public fund or fund manager must take all necessary steps within a reasonable time to remedy the situation, protecting the interests of the investors.
Registration Fee for each Prospectus is RM2,000 (USD700). The annual fee of RM2,000 (USD700) payable to Labuan FSA. For structure based on a protected cell company, the annual fees payable are RM5,000 (USD1,700) and RM2,000 (USD700) for each cell. Payment for the annual fee is payable not later than 15 January of each year during which the registration is valid.
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