Labuan Exchange

A. General

A) Labuan Companies Act 1990 (“LCA”)

B) Labuan Financial Services and Securities Act 2010 (“LFSSA”)

Exchange is a facility where stock brokers and traders can buy and sell securities, such as shares of stock and bonds and other financial instruments.

The Authority may approve a Labuan company to be an exchange in Labuan upon such terms as it deems fit.

An exchange established under section 134 may make rules which provide for:-

  1. the conditions and administration of licences issued by such exchange and for the regulation generally of the conduct of trading agents and listing sponsors in connection with the business of such exchange;
  2. the financial, accounting, record-keeping, disclosure and capital adequacy requirements applicable to trading agents and listing sponsors;
  3. the conditions under which securities may be listed for trading in the securities market proposed to be operated by such exchange;
  4. the conditions governing dealings in securities by trading agents and listing sponsors;
  5. the class or classes of securities that may be dealt in by trading agents and listing sponsors or listed in such exchange;
  6. confidentiality with respect to information relating to the affairs of such exchange and of any trading agent or listing sponsor in connection with the business of such exchange;
  7. the arbitration of disputes arising out of or in connection with any securities market operated by such exchange;
  8. the suspension of trading in and the delisting of any security listed on such exchange;
  9. the carrying on of the business of such exchange with due regard to the interests of the public;
  10. fair and independent market for the listing and trading of securities; and
  11. such other matters as the exchange deems necessary or desirable for the proper and efficient regulation, management and control of such exchange and the securities market operated by it.

a) In addition to its other functions, an exchange established under section 134 shall have regulatory functions and shall:-

  1. ensure that it adequately supervises the market operations and the conduct of market participants;
  2. ensure the adequacy and efficiency of internal controls; ensure market participants follow capital adequacy rules;
  3. investigate misconduct or apparent misconduct by market participants and their representatives that could seriously affect investors or other participating organisations and promptly report to the Authority on these instances of misconduct;
  4. investigate possible market abuses, including insider dealing and fraudulent behaviour; and
  5. take disciplinary measures or agree to a settlement after a public hearing.

b) Where an investigation is carried out by such exchange, it shall, in writing, forthwith:-

  1. inform the Authority of the nature of such investigation and persons involved in the investigation; and
  2. advise the Authority on the status of such investigation at such intervals as the Authority may request

c) On the completion of an investigation, such exchange shall:-

  1. transmit to the Authority all information in its possession relating to any such investigation; and
  2. inform the Authority of the outcome of such investigation and of any disciplinary measure or other course of action taken as a result of an investigation.

B. Corporate Features OF A LABUAN COMPANY

Residents and non-residents of Malaysia are permitted to establish a Labuan company.

(a) Any currency except Malaysian Ringgit (MYR).

(b) A Labuan company business in not permitted to transact in Malaysian Ringgit (MYR) other than:-

  1. For the purpose of defraying its administrative expenses and statutory expenses;
  2. For the holding of investments in a domestic company; and
  3. For the holding of debt obligations in a domestic company and as specified under Section 7(4) of the Labuan Companies Act 1990.

The applicant must appoint a licensed Labuan trust company

  1. Minimum of one (either individual or corporate entity)
  2. No bearer shares are allowed
  3. Shares shall be of no par value

Minimum of one (either individual or corporate entity)

The principal office of a Labuan trust company

Compulsory ( a Labuan trust company shall be appointed as the nominated secretary)

Filed annually not later than 30 days prior to the anniversary of the date of its incorporation

On or before the anniversary date of its incorporation

a) Compulsory

b) Shall be carried out by the Auditors approved by the Labuan FSA

a) Account shall kept in Labuan

b) All Labuan companies (including branches and subsidiaries) shall maintain all accounting records for a period not less than 6 years from the date an account transaction has been completed

Change in domicile is permitted

There are no publicly accessible records of Labuan companies

  1. 3% of net audited profits
  2. Non-trading activities: Zero Tax
  3. No withholding tax, no capital gain tax, no stamp duty on offshore instruments
  1. The Labuan company that carrying out Labuan business activity that specified in the Schedule of Labuan Business Activity Tax (Requirements For Labuan Business Activity) Regulations 2018 (“LBATR”) shall have the number of full time employees and an amount of annual operating expenditures as specified in the said Schedule of the LBATR.
  2. A copy of LBATR is available at http://qxgroup.my/legal/LBATR.pdf

a) Limited to facilitate meetings with clients and establish contacts with potential clients of the Labuan company

b) No maintenance of books and records (including trading activities) shall be done through, from or in the Marketing Office

c) Anywhere in Malaysia

d) With the exception of insurance brokers and captives, all Labuan companies that have a Marketing Office are required to maintain a Management Office in Labuan.

e) Location and address

  1. The Marketing Office must be segregated and independent from office of other entity/company and has its own phone line, fax machine and computer terminal separate from other entity/company.
  2. The premise of the Marketing Office should strictly be used for the purposes as specified under paragraph 16(s) and not for personal use or accommodation.

f) The number of staff in each of the Marketing Office should not exceed four.

g) Name and Signboard

  1. The name of the Labuan company must be easily legible in Romanised characters, printed on a signboard affixed at the entrance of the Marketing Office.
  2. The signboard must contain the company’s name, incorporation/ registration number and licensed number (if applicable).

h) The Labuan company must also comply with requirements of the relevant local authorities with regard to the signboard and Marketing Office, wherever applicable.

A copy of the Guidelines on Establishment of Labuan Marketing Office is available at http://qx-trust.com/legal/LMO.pdf

C. PROCEDURES

http://qxgroup.my/bdd/Procedures-P2IALC.pdf

http://qxgroup.my/bdd/Procedures-P2CRS4LC.pdf

D. REQUIREMENTS

Required

Optional. Please refer to B16

a) The affairs of an exchange shall be managed by a committee consisting of not less than three persons who possess relevant experience in financial, commercial or legal matters of whom the chairman and one other person shall be appointed by the Minister and the rest appointed by the Authority

b) Such committee shall have full power in all matters relating to listing, licensing, securities or dealings on such exchange and other related matters

To be advised by Labuan FSA

a) Shall keep a register of the trading agents and listing sponsors and shall enter the names and addresses of the trading agents and listing sponsors and the date upon which each was admitted and ceased to be a trading agent or listing sponsor

b) The register of trading agents and listing sponsors shall be made available for inspection at the registered office of such exchange during business hours

Any person may require, and if required, the relevant exchange shall forthwith provide, a copy of the register or any part thereof on payment of such fee as may be specified in writing by such exchange

To be audited (Audit fee subject to its volume of transactions)

Own letterhead and stationery

Kept and made available for inspection in Labuan IBFC

To be advised by Labuan FSA

Obtain written consent from Labuan FSA prior to making any change in its directorship and shareholding

Complying Guidelines, Directives and Reporting Requirements issued by Labuan FSA

E. SCOPE OF SERVICES AND FEES

Please contact us to the quotation

Please contact us to the quotation

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