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

88. Application for licence to carry on Labuan banking business

(1)

An application for a licence to carry on Labuan banking business shall be made in writing by or on behalf of the applicant to the Authority.

(2)

An application for a licence to carry on Labuan banking business by a Labuan company shall be accompanied by the following:

(a)

the applicant’s constituent documents duly authenticated by an officer of the applicant in such manner as may be acceptable to the Authority; and

(b)

a statement on the following:

(i)

the name, place and date of establishment of the applicant;

(ii)

the principal business and the principal place of business of the applicant; and

(iii)

the names and addresses of the directors of the applicant and the participants who each holds ten per centum or more of the paid-up capital of the applicant;

(c)

a statement on the names, addresses, qualifications, working experience and proposed positions of all officers who would be responsible for the management of the applicant’s Labuan banking business;

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(d)

a proposed amendment to the applicant’s constituent documents to the effect that the sole and exclusive object of the Labuan company shall be the carrying on of Labuan banking business;

(e)

where the applicant—

(i)

is a Labuan company which is a subsidiary of a holding company, a copy of the audited balance sheet of its holding company’s business for each of the three financial years immediately preceding the date of application;

(ii)

is a Labuan company which is not a subsidiary of any corporation, a copy of the audited balance sheet of the business of its participants who each holds ten per centum or more of the paid-up capital of the applicant for each of the three financial years immediately preceding the date of application;

(f)

a guarantee secured and an undertaking given by the applicant in respect of its Labuan banking business, in such manner and such form as may be acceptable to the Authority, and such guarantee and undertaking shall provide, inter alia, that—

(i)

the applicant shall comply with the financial obligations and requirements imposed under this

Act and shall meet the applicant’s liabilities in respect of its Labuan banking business;

(ii)

no participant of the applicant who holds ten per centum or more of the paid-up capital of the applicant shall be changed without the prior written approval of the Authority;

(iii)

every director or the principal officer of the applicant responsible for the management of its Labuan banking business shall be a fit and proper person and the appointment of such director or principal officer shall only be made after consultation with the Authority.

(3)

An application for a licence to carry Labuan banking business by a proposed Labuan company to be incorporated under the Labuan Companies Act 1990 (“proposed Labuan company”)

shall be accompanied by the following:

(a)

its proposed constituent documents duly authenticated in such manner as may be acceptable to the Authority by any of its officers;

(b)

a statement on the following:

(i)

the name, place and date of the proposed establishment of the applicant;

(ii)

the proposed principal business and the proposed principal place of business of the applicant; and

(iii)

the names and addresses of the proposed directors of the applicant and the proposed participants who each holds ten per centum or more of the paid-up capital of the applicant;

(c)

(d)

a copy of the audited balance sheet of the business of the proposed participants who would each hold ten per centum or more of its paid-up capital for each of the three financial years immediately preceding the date of its application; and

(e)

a statement on a guarantee secured and an undertaking given by its proposed participants that they would cause the proposed Labuan company, upon being incorporated, to secure a guarantee and give an undertaking as are referred to in paragraph (2)(f).

(4)

An application for a licence to carry on Labuan banking business by a foreign Labuan company shall be accompanied by the following:

(a)

its constituent documents duly authenticated by an officer of the applicant in such manner as may be acceptable to the Authority;

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(b)

a statement on the following:

(i)

the name, place and date of establishment of the applicant;

(ii)

the principal business and the principal place of business of the applicant; and

(iii)

the names and addresses of the directors of the applicant and the participants who each holds ten per centum or more of the paid-up capital of the applicant;

(c)

a proposed amendment to the applicant’s constituent documents to the effect that the sole and exclusive object of the foreign Labuan company shall be the carrying on of Labuan banking business;

(d)

a copy of the audited balance sheet of the applicant’s business for each of the three financial years immediately preceding the date of the application;

(e)

an undertaking given by the applicant in respect of its

Labuan banking business, in such manner and such form as may be acceptable to the Authority, and such undertaking shall provide, inter alia that—

(i)

the applicant shall comply with the financial obligations and requirements imposed under this

Act and shall meet the applicant’s liabilities in respect of its Labuan banking business;

(ii)

where the applicant is a foreign Labuan company, that it shall promptly notify the Authority of any change in its participants who hold ten per centum or more of its paid-up capital;

(iii)

(5)

An application for a licence to carry on Labuan banking business by a foreign company which is seeking registration as a foreign Labuan company under the Labuan Companies Act 1990

(“proposed foreign Labuan company”) shall be accompanied by the following:

(a)

the constituent documents under which it is to be established, duly authenticated by any of its proposed officers in such manner as may be acceptable to the

Authority;

(b)

a copy of the audited balance sheet of the business for each of the three financial years immediately preceding the date of the application;

(c)

a statement on—

(i)

the name, place and date of the establishment of the foreign company;

(ii)

the principal business and the principal place of business of the foreign company;

(iii)

the names and addresses of the directors of the foreign company;

(iv)

the names and addresses of the participants of the foreign company who each holds ten per centum or more of the paid-up capital of the foreign company;

(v)

the names, addresses, qualifications, working experience and proposed positions of all proposed officers of the proposed foreign

Labuan company who would be responsible for the management of its Labuan banking business;

and

(d)

an undertaking given by the foreign company as is referred to in paragraph (4)(e).

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(6)

An application for a licence to carry on Labuan banking business by a Malaysian bank shall be accompanied by the following:

(a)

the applicant’s constituent documents duly authenticated by an officer of the applicant in such manner as may be acceptable to the Authority; and

(b)

a copy of the audited balance sheet of the applicant’s business for each of the three financial years immediately preceding the date of the application;

(c)

a statement on the following:

(i)

the name, place and date of establishment of the applicant;

(ii)

the principal business and the principal place of business of the applicant; and

(iii)

the names and addresses of the directors of the applicant and the participants who each holds ten per centum or more of the paid-up capital of the applicant;

(d)

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
constituent documents
Defined · s 2
“constituent documents” means the statute, charter, memorandum of association and articles of association, rules, by-laws, partnership agreement, or other instrument, under or by which a person is established and the scope of that person’s functions, business, powers and duties are set out, whether contained in one or more documents;
Open s 2
corporation
Defined · s 2
“corporation” means any body corporate formed or incorporated or existing within Malaysia or outside Malaysia and includes a foreign Labuan company but does not include— (a) a corporation sole; (b) a trade union registered under any written law as a trade union; and (c) a society registered under any written law relating to co-operative societies;
Open s 2
director
Defined · s 2
“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;
Open s 2
established
Defined · s 2
“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;
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establishment
Defined · s 2
“establishment”, in relation to— (a) a company, means incorporation; (b) a statutory body, means coming into existence under the law establishing, appointing or constituting it; (c) a co-operative society, means registration, incorporation or otherwise coming into legal existence as a co-operative society; (d) a partnership, including a limited partnership and a limited liability partnership, means formation; (e) a sole proprietorship, means registration of its business; and (f) 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;
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foreign company
Defined · s 2
“foreign company” means— (a) a company, a corporation, a society, association or other body incorporated outside Malaysia; or (b) 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;
Open s 2
foreign Labuan company
Defined · s 2
“foreign Labuan company” means a foreign company registered under Part VIII of the Labuan Companies Act 1990;
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holding company
Defined · s 2
“holding company” has the meaning assigned to it in the Labuan Companies Act 1990;
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Labuan
Defined · s 2
“Labuan” means the Federal Territory of Labuan;
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Labuan banking business
Defined · s 86
“Labuan banking business” means— (a) the business of receiving deposits on current account, deposit account, savings account or any other account as may be specified by the Authority; (b) Labuan investment banking business; (c) Labuan financial business; (d) Labuan Islamic banking business; (e) such other business as the Authority, with the approval of the Minister, may specify, in any currency (including ringgit where permitted by the *Exchange Control Act 1953 or such other relevant law in force);
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Labuan company
Defined · s 2
“Labuan company” has the meaning assigned to it in the Labuan Companies Act 1990;
Open s 2
liabilities
Defined · s 2
“liabilities” includes debts, duties and obligations of every kind, whether present or future, or whether vested or contingent;
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licence
Defined · s 2
“licence” means a licence granted or renewed under this Act;
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Malaysian bank
Defined · s 86
“Malaysian bank” means a licensed as bank defined in the **Banking and Financial Institutions Act 1989 or an Islamic bank as defined in the ***Islamic Banking Act 1983; *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…
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officer
Defined · s 2
“officer”, in relation to a corporation, includes— (a) a director, secretary or employee of the corporation including the principal officer; (b) a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and (c) a liquidator of the corporation appointed in a voluntary winding-up; but does not include— (A) a receiver who is also not a manager; (B) a receiver and manager appointed by the Court; and (C) a liquidator appointed by the Court or by the creditors;
Open s 2
paid-up capital
Defined · s 86
“paid-up capital”, in relation to an applicant under sections 88, 89 and 90 or a bank licensee, means the amount of money contributed by its participants for it to carry on business but does not include credit facilities granted to it by its participants. Labuan banking business, Labuan investment banking business and Labuan financial business to be carried on only under licence
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participant
Defined · s 2
“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;
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person
Defined · s 2
“person” includes a corporation, partnership, a body of persons, corporate or unincorporated and a corporation sole;
Open s 2
principal officer
Defined · s 2
“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;
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
subsidiary
Defined · s 2
“subsidiary” shall have the meaning assigned to it under the Labuan Companies Act 1990;
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Report

Read on from s 89

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

88. Application for licence to carry on Labuan banking business

Terms defined in this Act

Labuan Insurance

Company Management

Part IX

Self-Regulatory Organizations

Appeals

Schedules