This article was first published in the Financial Services Centre Year Book 2011
As the world lurches from one financial imbroglio to another in these turbulent times, a jurisdiction situated in the comparative calm of the Asia Pacific has been enjoying still, calm waters topped by a momentous but quiet occasion on 11 February 2010.
That was the day Labuan International Business and Financial Centre (Labuan IBFC) sailed into a new era, suitably fortified to meet the challenges and business needs of the future with the introduction of its new laws. Reviewing and re-drafting all the laws involved gathering valuable input from industry players and the skills of a clutch of international lawyers who helped draft the legislation.
The tropical isle of Labuan, which began as Malaysia's international business and financial centre in 1990, is strategically located almost midway between China and India, a geographic advantage particularly in the context of today's steady flow of investment from West to East.
Despite its respectable growth over the last two decades, Labuan IBFC recognized that the key driver to greater growth in a changing world is the revamp of its legislation.
The legislation comprises four new laws and the radical amendments of four existing ones governing all the business activities on the island. A veritable feast – too extensive for an article like this - the laws are presented here as a taster's portion which, it is hoped, will have you asking for more.
From omnibus to foundations
Among the 4 new Acts introduced in Labuan are two pieces of 'omnibus' legislation, so-called because they aggregate all the guidelines, directives and legislation covering individual business activities on the island.
The Labuan Financial Services and Securities Act 2010 (LFSSA) governs financial entities using the conventional financial system while the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA) is a mirror of the conventional Act but relates to activities deemed Islamic and Shariah-compliant.
The LFSSA provides for the regulation and administration of the financial services and securities industry including securities, mutual funds, market intermediaries, Labuan Trust companies, Labuan banks, Labuan insurance companies, company management, exchanges and self-regulatory organizations.
Among the key features of the Act is the enhanced scope of the regulator's statutory objectives and functions which now includes the power to issue licenses, guidelines, directives and advisories. New entities such as Labuan Private Trust Company, Labuan Managed Trust Company, Self-Regulatory Organization, Limited Liability...