Section 2

a corporation sole;

a trade union registered under any written law as a trade union; and

a society registered under any written law relating to co-operative societies;

“court” means a court of competent jurisdiction;

“Court” means the High Court or a judge thereof;

“custodian” means the person who is entrusted by a mutual fund with custody of the property of the fund pursuant to an agreement to that effect;

Labuan Financial Services and Securities 17

“dealing in securities” means, whether as principal or agent, making or offering to make with any person or inducing or attempting to induce any person to enter into or to offer to enter into—

any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting securities; or

any agreement the purpose or avowed purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities;

“debenture” includes debenture stocks, bonds, notes and any other evidence of indebtedness of a corporation for borrowed monies, whether or not constituting a charge on the assets of the corporation, but shall not be construed as applying to any of the following:

any instrument acknowledging or creating indebtedness for, or for money borrowed to defray the consideration payable under, a contract for sale or supply of goods, property or services or any contract of hire in the ordinary course of business;

a cheque, banker’s draft or any other bill of exchange or a letter of credit;

a banknote, guarantee or an insurance policy;

a statement, passbook or other document showing any balance in a current, deposit or savings account;

any agreement for a loan where the lender and borrower are signatories to the agreement and where the lending of money is in the ordinary course of business of the lender, and any promissory note issued under the terms of such an agreement;

any instrument or product or class of instruments or products as the Authority may prescribe;

Act 704

“declaration” means a written statement of facts which the person making it signs and solemnly declares to be true before a commissioner or magisterial officer or notary public;

“director”, in relation to a person specified in the first column of the First Schedule, has the meaning set out in the second column of the First Schedule as against such person;

“domestic company” means a company incorporated under the

*Companies Act 1965 [Act 125];

“established”, in relation to a person specified in the first column of the First Schedule, has the meaning set out in the third column of the First Schedule as against such person;

“establishment”, in relation to—

a company, means incorporation;

a statutory body, means coming into existence under the law establishing, appointing or constituting it;

a co-operative society, means registration, incorporation or otherwise coming into legal existence as a co-operative society;

a partnership, including a limited partnership and a limited liability partnership, means formation;

a sole proprietorship, means registration of its business;

and

any other body, association or group of persons, whether corporate or unincorporated, which requires registration or any other form of recording or recognition under any written law before it can lawfully commence its activities, means registration, recording or recognition under such written law;

“expert” includes any engineer, accountant, solicitor, valuer, auditor or any other person whose profession or reputation gives authority to a statement made by him;

*NOTE—The Companies Act 1965 [Act 125] has since been repealed by the Companies Act 2016

[Act 777] which comes into operation on 31 January 2017—see subsection 620(1) of Act 777

and P.U. (B) 50/2017.

Labuan Financial Services and Securities 19

“financial year” means the period not exceeding fifty-three weeks at the end of which the balance of the fund’s accounts is struck or, if no such balance is struck or if the period of fifty-three weeks for so doing is exceeded, the calendar year;

“foreign company” means—

a company, a corporation, a society, association or other body incorporated outside Malaysia; or

an unincorporated society, association or other body which under the law of its place of origin may sue or be sued, or hold property in the name of the secretary or other officer of the society, association or body duly appointed for that purpose, and which does not have its head office or principal place of business in Malaysia;

“foreign currency” means any currency other than ringgit;

“foreign Labuan company” means a foreign company registered under Part VIII of the Labuan Companies Act 1990;

“foundation” means a foundation established under the Labuan

Foundations Act 2009 [Act 706], Part XI of the Labuan Islamic

Financial Services and Securities Act 2010 [Act 705] or such similar entity established under the laws of any recognized country or jurisdiction notwithstanding any statutory definition to the contrary;

“fund administrator” means a person who, for valuable consideration, provides a mutual fund with administrative services or facilities alone or with accounting services;

“fund manager” means a person who, for valuable consideration, provides management services alone or with investment advice or administrative services in respect of securities for the purposes of investment, including dealing in securities or such other activity as may be specified by the Authority;

“holding company” has the meaning assigned to it in the Labuan

Companies Act 1990;

Act 704

“home supervisory authority” means any relevant authority or body in Malaysia or of any other country which exercises supervisory functions over the operations of any licensed entity;

“insurance licensee” means a person licensed under Part VII;

“Labuan” means the Federal Territory of Labuan;

“Labuan bank” means a person who is licensed to carry on

Labuan banking business under Part VI;

“Labuan company” has the meaning assigned to it in the Labuan

Companies Act 1990;

“Labuan investment bank” means a person who is licensed to carry on Labuan investment banking business under Part VI;

“Labuan licensed institution” means a person who is licensed to carry on Labuan financial business under Part VI;

“Labuan private trust company” means a Labuan company or foreign Labuan company carrying on trust company business for a private trust and registered with the Authority under Division 4 of Part V;

“Labuan trust company” means a person licensed to carry on trust company business under sections 61 and 71;

“liabilities” includes debts, duties and obligations of every kind, whether present or future, or whether vested or contingent;

“licence” means a licence granted or renewed under this Act;

“licensed entity” means a person licensed or registered to carry on any activity under any Part;

“limited liability partnership” means a limited liability partnership formed under the Labuan Limited Partnerships and Limited

Liability Partnerships Act 2010 [Act 707], Part X of the Labuan

Islamic Financial Services and Securities Act 2010, or under the laws of any recognized country or jurisdiction notwithstanding any statutory definition to the contrary;

Labuan Financial Services and Securities 21

“limited partnership” means a limited partnership formed under the Labuan Limited Partnerships and Limited Liability Partnerships

Act 2010, Part X of the Labuan Islamic Financial Services and

Securities Act 2010, or under the laws of any recognized country or jurisdiction notwithstanding any statutory definition to the contrary;

“Malaysian bank licensee” means a bank licensee which is an office or a subsidiary of a Malaysian bank;

“Minister” means the Minister charged with the responsibility for finance;

“mutual fund” or “fund” means a Labuan company, a corporation incorporated under the laws of any recognized country or jurisdiction, a partnership, a protected cell company, a foundation, or a unit trust which—

collects and pools funds for the purpose of collective investment with the aim of spreading investment risk;

and

issues interests in a mutual fund which entitles the holder to redeem his investments that is agreed upon by the parties and receive an amount computed by reference to the value of a proportionate interest in the whole or part of the net assets of the aforesaid types of entities, as the case may be, and includes an umbrella fund whose interests in a mutual fund or units are split into a number of different class funds or sub-funds and whose participants are entitled to exchange rights in one part for rights in another;

“national language” means the national language of Malaysia as defined in the National Language Act 1963/67 [Act 32];

“office” includes the principal place of business, a branch, an agency, a mobile place of business, a place of business set up and maintained for a limited period only, an electronic terminal and any other place of business;

Act 704

“officer”, in relation to a corporation, includes—

a director, secretary or employee of the corporation including the principal officer;

a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and

a liquidator of the corporation appointed in a voluntary winding-up;

but does not include—

a receiver who is also not a manager;

a receiver and manager appointed by the Court; and

a liquidator appointed by the Court or by the creditors;

“participant”, in relation to a person specified in the first column of the First Schedule, has the meaning set out in the fourth column of the First Schedule as against such person;

“partnership” means a limited partnership or a limited liability partnership;

“person” includes a corporation, partnership, a body of persons, corporate or unincorporated and a corporation sole;

“person in control”, in relation to an applicant for a licence or a licensed entity under this Act, means a person who—

is entitled to exercise, or control the exercise of, not less than one-third of the votes attached to the voting shares in such applicant or licensed entity;

has the power to appoint, or cause to be appointed, a majority of the directors of such applicant or licensed entity; or

has the power to make, or cause to be made, decisions in respect of the business or administration of such applicant or licensed entity, and to give effect to such decisions or cause them to be given effect to;

Labuan Financial Services and Securities 23

“prescribe”, where no mode is mentioned, means prescribe from time to time by order published in the Gazette, and a power to prescribe includes the power to make different provisions in the order for different persons, classes, categories or descriptions of persons;

“principal officer”, in relation to a licensed entity, means a person, by whatever name called, who is responsible, subject to the authority of the directors, for the conduct of the business and the administration of the licensed entity;

“private fund” means a mutual fund—

whose securities are owned or held by—

not more than fifty investors where the first time investment of each of such investors is not less than two hundred and fifty thousand ringgit or such other sum as may be prescribed by the Authority or the equivalent in any foreign currency; or

which is designated as a private fund under regulations made under this Act;

“prospectus” means any prospectus, notice, circular, advertisement or invitation inviting applications or offers to subscribe for or purchase securities, or offering any securities for subscription or purchase;

“protected cell company” means a company incorporated, or converted into, a protected cell company in accordance with the provisions of Part VIIIb of the Labuan Companies Act 1990 or such similar entity established under the laws of any recognized country or jurisdiction notwithstanding any statutory definition to the contrary;

Act 704

“public fund” means a mutual fund other than a private fund;

“recognized country or jurisdiction” means a country or jurisdiction as may be specified by the Authority;

“record” means a facility for storing information which can be subsequently retrieved or reproduced;

“regulations” means regulations made under this Act;

“related”, in relation to a corporation, means related within the meaning of section 4 of the Labuan Companies Act 1990;

“resident” means any person who is—

in relation to a natural person, a citizen or permanent resident of Malaysia; and

in relation to any other person, a person who has established a place of business, and is operating, in Malaysia, and includes a person who is declared to be a resident pursuant to section 43 of the *Exchange Control Act 1953 [Act 17];

“ringgit” means a ringgit in the currency of Malaysia;

“rules”, in relation to an exchange established under Part IX, means the rules governing the conduct of the exchange or its members;

“securities” means any investments commonly known or capable of being described as securities, and includes—

shares, debentures, funds, units, interests in a limited partnership or limited liability partnership or unit trust or foundation or protected cell company or corporation;

debentures, bonds or notes of or issued by any body

(incorporated or unincorporated), government, local government or public authority;

*NOTE—The Exchange Control Act 1953 [Act 17] has since been repealed by the Financial

Services Act 2013 [Act 758] which comes into operation on 30 June 2013—see sections 271

and 272 of Act 758.

Labuan Financial Services and Securities 25

certificates of interest or participation in, temporary or interim certificates for, receipts for or warrants to subscribe to or purchase any of the investments described in paragraphs (a) and (b); and

securities as defined in the Labuan Islamic Financial

Services and Securities Act 2010;

“specify”, where no mode is mentioned, means specify from time to time in writing, and a power to specify includes the power to specify differently for different persons or different classes, categories or descriptions of persons;

“subsidiary” shall have the meaning assigned to it under the

Labuan Companies Act 1990;

“trust officer” means an officer of a Labuan trust company approved and designated as a trust officer by the Authority;

“unit trust” means a trust established under the laws of Malaysia relating to Labuan or the laws of any recognized country or jurisdiction for the purpose, or having the effect, of providing facilities for the participation by persons as beneficiaries under the trust in any profits or income arising from the acquisition, holding, management or disposal of any property.

Any reference in this Act to “this Act” shall, unless otherwise expressly stated, be deemed to include a reference to any regulation, rule, order, notification or other subsidiary legislation made under this Act.

Notwithstanding the definition of “securities” under this Act and “interest” as defined in section 66 of the Labuan

Companies Act 1990, the Minister may, on the recommendation of the Authority, prescribe any instrument or product or class of instruments or products to be securities for the purposes of this

Act and the Labuan Financial Services Authority Act 1996.

Administration of the Act