Mutual Fund

A mutual fund or fund means a Labuan company, a corporation incorporated under the laws of any recognised country or jurisdiction, a partnership, a protected cell company, a foundation or a unit trust which:

  • collects and pools funds for the purpose of collective investment with the aim of spreading investment risk; and
  • issues interests in a mutual fund which entitles the holder to redeem his investments that is agreed upon by the parties and receives an amount computed by reference to the value of a proportionate interest in the whole or part of the net assets of the aforesaid types of entities, as the case may be, and includes an umbrella fund whose interests in a mutual fund or units are split into a number of different classes of funds or subfunds and whose participants are entitled to exchange rights in one part for rights in another.

Two types of funds are prescribed under the Labuan Financial Services and Securities Act 2010, namely private funds and public funds.

Private Fund


Private funds are mutual funds:

  1. whose shares are not offered to the general public and are owned or held by
    • not more than 50 investors where the first time investment of each of such investors is not less than RM250,000 or its equivalent in any foreign currency
    • any number of investors where the first time investment of each such investors is not less than RM500,000 or its equivalent in any foreign currency; or
  2. which is designated as a private fund under regulations made under the Labuan Financial Services and Securities Act 2010.

Islamic private funds are private funds with similar definition to the above and are in compliance with Shariah principles.

Public Fund


Labuan public funds are those whose securities are offered for subscription to any members of the general public.

 

Registration Requirement

No public fund shall carry on business in or from within Labuan unless it has been registered under Section 33(1)(a) of the Labuan Financial Services and Securities Act 2010 (LFSSA) or in the case of an Islamic public fund, Section 38(1)(a) of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA). The annual fee payable is RM2,000 (USD600).

 

Application Requirement

  1. A copy of the Memorandum and Articles of Association / Partnership agreement / trust deed / charter / other constituent documents as the case may be of the fund.
  2. Names, addresses, profiles and relevant experience of the director / general partner / designated partner / trustee / council members of the fund (Board of the public fund), whichever applicable. The appointment of any members of the Board of the public fund requires prior written approval from Labuan FSA.
  3. The profile of the promoter/custodian/trustee/fund manager, whichever applicable.
  4. An audited annual account of the promoter and fund manager, where applicable, for the three years preceding the application.
  5. The profile of the qualified person as its Shariah adviser in the case of a Labuan Islamic public fund.
  6. A signed declaration by the Board of the public fund on confidentiality and secrecy with regard to the operation and administration of the fund.
  7. A certificate from an expert as required under Section 11 of the LFSSA or Section 16 of the LIFSSA that includes a statement certifying that the Labuan public fund complies with the requirements under Part III of LFSSA or Part IV of the LIFSSA and the Guidelines on the Establishment of Labuan Mutual Funds Including Islamic Mutual Funds.
  8. A copy of the prospectus of the Labuan public fund which should comply with Section 35 of the LFSSA or Section 40 of the LIFSSA, either in draft or final form.

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