Welcoming Remarks by Director-General of Labuan FSA on Luncheon Talk on Labuan IBFC with Foreign Embassies to Malaysia
Combating Financial Fraud Conference: The Perfect Storm

11 August 2016

Dorsett Grand Labuan

Your Excellency,

Members of the Diplomatic Communities,

Distinguished guests,

Ladies and Gentlemen

Good morning,

It is my pleasure to welcome you to this luncheon talk, to give you an update on the achievements and development of the Labuan International Business and Financial Centre (IBFC) in conjunction with the release of the Labuan Financial Services Authority (Labuan FSA) Annual Report 2013 last week.

This is the sixth consecutive years the luncheon talk is organized aimed to engage the international communities in Malaysia, by sharing the achievements and the development of Labuan IBFC in the past one year. This is an important platform to facilitate productive dialogue between the authority and the foreign diplomats of different countries towards enhancing business opportunities between Malaysia and the other economies.

Ladies and Gentlemen,

While the global economic and financial landscape transitions, the broader global economic recovery has led to positive spillovers to the rest of the world, including Asia. This has provided Labuan IBFC with vast opportunities to capitalise on the increased economic activities and growth of new businesses in the region.

Over the last decade, the Labuan IBFC has grown to become an integral part of the Malaysian financial system. This is evident from the increased influx of players; expanded business volume and the wide-ranging diversity of financial products offered currently as compared to the centre’s early years. In 2013, the Labuan IBFC continued to chart positive growth across all key business sectors and continued to attract multinational corporations across the globe onto its shore. The penetration of business connectivity in Asia has also widened with increasing Labuan companies serving the Asian markets. This is attributable mainly to the strategic business development initiatives focusing towards the growth sectors in the Asia Pacific region. A key success factor to the sustained growth of Labuan IBFC is the well-regulated financial centre with facilitative business environment which provide confidence for investors to continue using Labuan IBFC.

As the regulatory body for Labuan IBFC, Labuan FSA is entrusted with the regulatory and supervisory roles to ensure the soundness and financial stability of the Labuan IBFC. Labuan FSA’s supervisory approach has evolved over the years in tandem with international regulatory reforms setting of new global standards. Towards this end and in line with the expanded legal framework, Labuan FSA has undertaken definitive actions in 2013 to enhance its regulatory and prudential framework aimed at improving the capacity and capability of the Labuan financial institutions. This is vital for the authority to maintain the status of Labuan IBFC as a centre with high integrity and repute.

In doing so, Labuan FSA has stringent entry policies and extensive due diligence process in place to ensure only “fit and the proper” and conduct of genuine business transactions operating in Labuan IBFC. This approach towards regulations and supervision has received positive assessment by international regulatory bodies such as the IMF, Asia/Pacific Group on Money Laundering in the past years. Of recent assessment by the OECD Global Forum Peer Review II, Malaysia (including Labuan IBFC) has been rated “Largely Compliant” on the implementation of internationally agreed standards and best practice on taxation, particularly on effective exchange of information. Malaysia (including Labuan IBFC) is one of the 25 jurisdictions been rated “Largely Compliant” among the 54 jurisdictions assessed by the Global Forum. This is a global recognition to Malaysia and Labuan IBFC for its longstanding adherence to the highest international standards and reaffirms Labuan IBFC’s jurisdiction positioning as a regulated financial centre that is in compliance with internationally adopted standards.

Looking to the year ahead, the financial landscape is expected to experience further regulatory changes and Labuan FSA will ensure that the thrust of initiatives and development for Labuan IBFC will continue to be focused at ensuring the well-regulated and robust IBFC is preserved. This will be achieved through several developmental and policy initiatives including the effective adoption of international standards, and enhancing the disclosure and transparency standards in line with international best practices. Regional cooperation in the areas of cross-border surveillance and supervision will also be strengthened. At the same time, significant focus will also be accorded to developmental strategies to enable the centre to reap the benefits presented by the new landscape.

On that note, on behalf of Labuan FSA, I would like to thank you for presence here today. We certainly hope that this event will be the starting point, if not already prompt more business engagements to enhance trade and investment flows between our countries. I would like to draw my remarks to a close and wish to call upon Mr. Danial Mah, Deputy- Director General to give you a presentation.

Thank you.
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