In forceUpdated to 15 Oct 2022Read it in Bahasa Malaysia

Contents

Labuan Financial Services and Securities Act 2010 · Updated to 15 Oct 2022 · Part III

49. Specific duties of fund managers of public funds

(1)

The fund manager of a public fund shall—

(a)

ensure that a written agreement is entered into with each client before transactions are carried out on behalf of a client;

(b)

understand each client’s investment objectives, instructions, risk profile and investment restrictions, where applicable, which shall be reassessed and updated at least annually;

(c)

exercise diligence and thoroughness in, and have reasonable and adequate basis for, preparing the investment policy or investment recommendation;

(d)

obtain each client’s approval for the investment policy or investment recommendation prior to its implementation;

(e)

provide each client with full and accurate information in order to make an informed investment decision when approving the investment policy or investment recommendation;

(f)

avoid any misrepresentation in any investment policy or investment recommendation; and

(g)

ensure that sufficient monies and properties are available in the client’s account to carry out transactions.

(2)

A written agreement referred to in paragraph (1)(a) shall cover amongst others, the following areas:

(a)

the client’s investment objectives, instructions, risk profile and investment restrictions;

(b)

notification of any significant change to the investment policy or investment recommendation;

(c)

mode and manner of reporting to client;

(d)

clear authorization of discretionary management;

(e)

frequency of written report for the performance and review of the client’s monies or properties against an appropriate benchmark;

(f)

amount of fees and charges to be paid by the client;

(g)

the fund manager’s intention to receive, or practice of receiving, soft commission;

(h)

details of the custodian arrangement; and

(i)

such other matters as may be specified by the Authority from time to time.

(3)

A fund manager who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding three years or to both.

Labuan Financial Services and Securities 67

Terms defined in this Act

Authority
Defined · s 2
“Authority” means the Labuan Financial Services Authority established under section 3 of the Labuan Financial Services Authority Act 1996;
Open s 2
custodian
Defined · s 2
“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;
Open s 2
fund
Defined · s 2
“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— (a) collects and pools funds for the purpose of collective investment with the aim of spreading investment risk; and (b) 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;
Open s 2
fund manager
Defined · s 2
“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;
Open s 2
Labuan
Defined · s 2
“Labuan” means the Federal Territory of Labuan;
Open s 2
policy
Defined · s 101
“policy” means an insurance policy and includes a cover note or any written contract of insurance whether or not embodied in or evidenced by an instrument in the form of an insurance policy; and any reference to a policy of an insurer includes a reference to any policy in respect of which the insurer is under any liability, whether the policy was issued by the insurer or the liability was transferred to the insurer from another insurer;
Open s 101
public fund
Defined · s 2
“public fund” means a mutual fund other than a private fund;
Open s 2
ringgit
Defined · s 2
“ringgit” means a ringgit in the currency of Malaysia;
Open s 2
securities
Defined · s 2
“securities” means any investments commonly known or capable of being described as securities, and includes— (a) shares, debentures, funds, units, interests in a limited partnership or limited liability partnership or unit trust or foundation or protected cell company or corporation; (b) 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 has since been repealed by the Financial Services Act 2013 which comes into operation on 30 June 2013—see sections 271 and 272…
Open s 2

Report

Read on from s 50

Part IV

Market Intermediaries

Read on from Part IV

Part V

Labuan Trust Companies

Read on from Part V

Part VI

Labuan Banking

Read on from Part VI

Part VII

Labuan Insurance

Part VIII

Company Management

Read on from Part VIII

Part IX

Read on from Part IX

Part X

Self-Regulatory Organizations

Read on from Part X

Part XI

Appeals

Read on from Part XI