PUBLIC FUND

Public funds are mutual funds other than private funds and Islamic public funds are public funds that are in compliance with Shariah principles.

Registration Requirements

No public fund shall carry on business in or from within Labuan unless it has been registered under paragraph 33 (1)(a) of LFSSA or in the case of Islamic public fund paragraph 38(1)(a) of LIFSSA. The annual fee payable is RM2,000.

  • A statement setting out the scope and nature of the business to be carried out in, from or within Labuan
  • The instrument by which the applicant is constituted or such other proof required by the regulator that the applicant is lawfully constituted under Malaysian laws relating to Labuan or under the laws of any recognized country or jurisdiction
  • Names, addresses and relevant experience of the directors/ general partners/trustees of the fund. The person in control or director or Chief Executive Officer (CEO) of the applicant fund must be a fit and proper person. The appointment of the Board of Directors and CEO requires prior approval from The Authority.
  • A signed declaration by the directors/general partners of the applicant fund on confidentiality and secrecy.
  • A copy of the draft prospectus which should comply with requirements under LFSSA or LIFSSA as the case maybe, and shall contain at least the following information:
    • A general description of the proposed fund.
    • The investment policies and objectives that will be observed by the fund.
    • The prospect for the fund given its nature, investment policies and objectives, and where applicable, an analysis of the risk by its nature and the risk of the country and region where the fund intends to invest.
    • The proposed minimum subscription proceeds net of costs (e.g. underwriting fees related to the offer).
    • The names of all underwriters and amount proposed to be underwritten by each underwriter.
    • The distribution policy of the fund.
    • Details of taxes to be levied on income and/or capital of the fund and any taxes to be deducted from distributions to shareholders.
    • A statement summarising the rights of investors as provided.
    • A key data page giving a summary of the key features of the particular fund, which can assist an investor in considering and comparing any similar investments on offer and which shall include at least the following information
      • Issue price of the shares.
      • Nature and significant expenses to be incurred by the fund.
      • Information on the securities to be offered by the fund.
  • Information on the managers and custodian of the fund and their key personnel, full details of the experience of the managers and custodian, the terms of appointment and termination. The information shall also include particulars of
    • Statement of the potential risks of investing in the fund.
      • Any shares held by them in the fund.
      • Any borrowings given by them to the fund.
      • Any other obligations of the fund to them.
      • The extent to which it intends to invest in derivatives and unlisted securities, but if it intends not to invest in any of such investments, the prospectus must include an appropriate statement to that effect.
      • All other information affecting the fund's business.

Operational Requirements for Public Funds

  • The applicant fund:
    • Must appoint a fund manager, trustee, administrator and custodian who are approved by The Authority. In the case of Islamic public fund, a qualified Shariah Adviser to ensure compliance with Shariah principles.
    • Must maintain a registered office in Labuan. For a Labuan fund permitted to be managed by a fund manager from a recognised country or jurisdiction, at least one of the fund-related businesses, such as custodian, trustee or fund administration, must be based in Labuan.
    • The applicant fund which has been granted provisional acceptance is not allowed to accept subscription monies or make investments until granted registration. It is allowed to use the provisional acceptance only for promotional or marketing purposes.
    • Shall conduct business only in a foreign currency and not in Malaysian Ringgit except solely for the purpose of defraying administrative and statutory expenses.
    • Shall appoint an approved auditor.
    • Must notify The Authority of any amendments or alteration to any of its constituent documents.
    • Must conduct its business with due diligence and sound principles, maintain adequate and proper records and books of accounts and comply with the local laws and regulations where it services its clients.
    • Must indicate clearly its name and licence number on its letterhead, stationery and other documents.
    • Must comply with the requirements with regard to its accounts and the auditing.
    • Must obtain the approval of The Authority for any changes in its business plan.

Fees

  • If any of the mutual funds uses a PCC structure, the annual fee would be as follows:
    • Core RM5,000
      Each cell RM2,000

Governance Legislation

  • Part III of the LabuanFinancial Services and Securities Act 2010 (LFSSA)
  • Sections 31 – 39 LFSSA
  • Part IV of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA)
  • Sections 36 – 44 LIFSSA