Labuan FSA Strengthens Money Broking Framework To Safeguard Investors

LABUAN, Sept 11 (Bernama) -- The Labuan Financial Services Authority (Labuan FSA) has introduced revised guidelines for the money broking business in the Labuan International Business and Financial Centre (Labuan IBFC), aiming to enhance the regulatory framework and protect investors. 

Labuan FSA director-general Nik Mohamed Din Nik Musa said this move reflects Labuan FSA’s commitment to promoting strong governance in response to the rapidly evolving financial sector, driven by digitalisation.

He said the updated guidelines focus on key areas to address new and emerging risks in the money-broking business.

This includes strengthening the eligibility criteria, as the guidelines now provide clearer licensing requirements, ensuring that only qualified entities operate within the jurisdiction.

The revised guidelines also include clarification of permissible activities, providing clear definitions of permissible activities under the Labuan Money Broker (LMB) license, thus reducing ambiguity and supporting fintech innovation.

"It also enhanced compliance measures, incorporating improved Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) frameworks, thus ensuring compliance with international standards and helping protect the financial system from illicit activities," he said in a statement to Bernama today.

Nik Mohamed Din said the revised guideline further enhances monitoring mechanisms, with stringent audit and reporting requirements to better oversee money-broking activities.

He also said the revised guideline includes improved client protection, where new transparency and disclosure measures, along with enhanced dispute resolution mechanisms, would help safeguard client interests.

"Another important measure is comprehensive risk management, as the guidelines mandate more extensive risk management frameworks to prevent financial misconduct and promote greater accountability,” he said.

Nik Mohamed Din said these updates come at a crucial time as digital business models introduce greater complexity to financial sectors. 

“Labuan FSA’s efforts are aligned with global standards set by organisations like the Financial Action Task Force (FATF), International Organisation of Securities Commissions (IOSCO), and the International Monetary Fund (IMF),” he added.

--BERNAMA