Labuan Financial Services Authority (Labuan FSA) promulgates a well regulated, progressive and conducive business and financial ecosystem within the Labuan International Business and Financial Centre (LIBFC). Despite the challenging environment faced by regional economies and heightened financial market volatility as well as continued uncertainties emanating from the volatile crude oil and commodity prices globally, LIBFC persevered and continued to experience growth in its key sectors i.e. banking, insurance and wealth management, albeit at a more moderate pace.

The financial stability of LIBFC remained resilient in the face of external headwinds and political events in the last six months such as Brexit, the Qatar crisis and more volatile movements of financial flows due to monetary policy stance taken by advanced economies. To ensure continued financial stability and integrity of LIBFC, Labuan FSA is committed to strengthen prudential regulations and supervisory framework in 2017 by:

(i) Enhancing the risk-based capital requirements for Labuan banks, insurance including captives and trust companies in line with international standards and best practices.

(ii) Strengthening the corporate governance framework and internal controls for financial institutions which includes the introduction of a new external auditor framework.

(iii) Reinforcing sound market conduct to promote professionalism of market intermediaries.

(iv) Reinforcing the AML/CFT framework by providing greater guidance to Labuan entities as part of the strategic outcome under National Strategic Action Plan.

Supervisory and Enforcement

(i) Effecting the risk based supervisory approach for the Labuan banks and Labuan insurers.

(ii) Undertaking firm enforcement actions to instil market discipline and preserve the integrity as well as the reputation of the LIBFC.

(iii) Strengthening international cooperation and exchange of information including home-host supervisory dealings with relevant authorities.

The above initiatives will be complemented with efforts to develop new business opportunities via refined and new product offerings. Enhancing the eco-system to promote LIBFC’s facilitative and efficient business environment will be key moving forward. Towards this aim and in the face of a more challenging environment, traditional financial institutions are expected to scale up and shift strategies to be more inclusive and supportive of the growth in LIBFC