Labuan Fsa Hosts Dialogue On Protected Cell Companies

By Jailani Hasan

LABUAN, Oct 9 (Bernama) -- The Labuan Financial Services Authority (Labuan FSA) hosted a comprehensive market briefing and roundtable discussion to enhance the understanding of Labuan Protected Cell Companies (PCCs) and their operational structures.

Held on Oct 5 in Kuala Lumpur, the dialogue brought together key stakeholders from Labuan banking institutions, Labuan insurers and captive insurance owners.

Labuan FSA's director-general Nik Mohamed Din Nik Musa said the primary objective of the session was to assist banking institutions in the process of onboarding and screening PCCs for the purpose of opening bank accounts. 

Over 50 participants from various organisations attended the roundtable session, including representatives from the Labuan Compliance Officers' Networking Group; the Labuan International Insurance Association; the Association of Labuan Banks; Malaysian banks; PCC owners and Bank Negara Malaysia.

Nik Mohamed Din said Labuan captive insurance and PCCs are unique business structures offered exclusively within the Labuan International Business and Financial Centre (Labuan IBFC).

“Currently, the Labuan IBFC stands out as the only market in Asia with specific legislations supporting the PCC structure as a corporate vehicle,” he said.

Nik Mohamed Din noted that the awareness of the pecuniary nature and features of Labuan PCCs is lacking, and to address this knowledge gap, the Labuan FSA provided attendees with insights into the licensing procedures, regulatory requirements and supervisory oversight of Labuan PCCs. 

The dialogue also covered aspects of anti-money laundering (AML) requirements, which apply to PCCs as Reporting Institutions under the law.

“Labuan FSA’s AML/Countering the Financing of Terrorism (AML/CFT) control measures for PCCs are comprehensive and on par with those applied to other Labuan licensed financial institutions,” he said. 

He said this includes obligations related to customer due diligence, beneficiary ownership reporting, disclosures and suspicious transaction reporting to relevant authorities.

“Addressing the global issue of challenges in opening bank accounts, Labuan FSA officials emphasised the stringent requirements for due diligence processes and adherence to know-your-customer rules in compliance with AML/CFT laws during the briefing.

“They also noted that the Labuan insurance sector, including Labuan captives, was rated as ‘low risk’ by the National Coordination Committee to Counter Money Laundering in the National Risk Assessment 2020 and Labuan Risk Assessment 2020,” he said. 

Nik Mohamed Din said Labuan PCCs are subject to regulations and supervision, similar to other Labuan financial institutions.

"The Labuan insurance captives, including PCCs, are key business focus areas outlined in Labuan IBFC's Strategic Roadmap 2022-2026,” he said.

He added that banking facilities and financial infrastructural support from Labuan and Malaysian banks play an important role in promoting intra-Labuan business.

-- BERNAMA