Welcoming Address by Mr. Danial Mah Abdullah, at MAYBANK International Labuan Roadshow: Introduction of Dual Currency Investment Products

Welcome Remarks By
Mr Danial Mah Abdullah Director-General, Labuan FSA

15th August 2018
Dorsett Grand Labuan

Ladies and Gentlemen

Assalammualaikum and a very good afternoon.

1. First of all, let me thank Maybank International for inviting me to deliver the opening remarks at today’s Maybank International Roadshow to introduce its Dual Currency Investment Product. I am delighted to be part of this programme and I hope you all are as excited as I am to witness yet another new product coming to Labuan IBFC, further diversifying offerings of Labuan IBFC’s financial services. I would like to commend Maybank International for its efforts to raise awareness among the Labuan business community of new financial products.

2. The client base potential of Labuan IBFC is certainly good for the introduction of new financial products. The centre currently has over 14,000 Labuan entities including 55 banks, 208 insurance companies, 50 trust companies, 350 leasing companies, 31 money brokers and entities. However, even though Labuan has progressed well over the years but it has yet to achieve its full potential as a financial centre. Labuan institutions need to step up the game and as the regulator, Labuan FSA would like to see more Labuan players taking advantage of the incentives and regulatory platform that has been provided to fully realise the business potentials of the IBFC. Today’s roadshow is one of the means to do more in Labuan IBFC. Indeed, for the banks, we strongly recommend to expand their activities by having more skill-based activities such as money market operations, forex and investment banking activities and move away from the predominance of traditional deposit taking, loans credit and providing guarantees. This would be the way forward in the development in Labuan IBFC’s financial sector.

3. Even for other international financial centres, they are adjusting and reinventing themselves in the rapid changing global environment to compete and stay relevant. More importantly, the industry must have the capacity and capability to rise to new demands, trends and leaps in technological advancements. Labuan FSA is making efforts to adapt to these changes particularly in areas of fintech. Increasingly, we are seeing many applications to set up operations in Labuan IBFC to provide services and products that use blockchains, cryptocurrencies, e-wallet etc. Financial institutions in Labuan IBFC must tap on these new opportunities, but of course subject to proper risk and prudence management framework.

Ladies and Gentlemen,

4. Today, we are witnessing Maybank International introducing dual currency investments or DCI as an alternative investment for its corporate clients in Labuan IBFC. The products encompass time deposit (money market placement) and foreign exchange (FX option) and are offered to provide avenue for investors to enhance their currency deposits returns with the bank and meet the demands for alternative investment. Investors nowadays are more savvy and sophisticated and would understand the need for currency diversification in their investment portfolio. DCI can be used to implement this investment portfolio diversification strategy.

5. However, while Labuan FSA encourages the introduction of financial products and services, as a regulator, there is always the need to remind investors to always do appropriate due diligence and risk management when considering any new propositions. At the end of the day, we are always mindful of the overarching objective of ensuring the preservation of the reputation and soundness of Labuan IBFC.

6. With this, I end my remarks and look forward to hear more of the DCI and how we all can benefit from it.

Thank you.
Mr Danial Mah Abdullah
Director-General, Labuan FSA
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