As the money broking business continues to grow in Labuan IBFC, the Labuan Financial Services Authority (Labuan FSA) has stepped up with a revised set of guidelines to ensure the industry keeps pace with modern financial challenges. The new guidelines are designed to tighten regulations, promote better governance, and protect investors, especially with the increasing digitalisation of financial services.

The update focuses on six key areas aimed at tackling emerging risks:

• Tougher Licensing Rules: Clearer criteria have been set to ensure only qualified companies can operate in the jurisdiction.

• Defining What Money Brokers Can Do: Labuan FSA has clarified what activities fall under the money broking license, reducing confusion and paving the way for the use of digital technology in fintech innovation.

• Boosting Compliance: Enhanced anti-money laundering (AML) and counter-terrorism financing measures have been incorporated to align operations with global standards and keep financial crimes at bay.

• Stronger Oversight: Stricter monitoring, audits, and reporting requirements will now be part of the regulatory framework to ensure money brokers are operating responsibly.

• Better Client Protection: Transparency is key in the new guidelines, with more disclosure requirements and improved ways for clients to resolve disputes.

• Tighter Risk Management: Brokers must now have robust risk management systems to prevent misconduct and fraud, ensuring greater accountability.

This move comes as Labuan IBFC continues to adapt to the complexities of digital financial services. Like other international financial centers, Labuan FSA is aligning its regulations with global standards set by bodies such as the Financial Action Task Force (FATF), the International Organization of Securities Commissions (IOSCO), and the International Monetary Fund (IMF).

Labuan FSA Director General, Mr. Nik Mohamed Din Nik Musa, highlighted the importance of these changes, noting, "We need to address challenges like regulating sophisticated financial products while ensuring market stability and investor protection in Labuan IBFC. Our aim is to keep Labuan IBFC a secure, competitive, and attractive hub for global businesses."

The updated guidelines are expected to strengthen Labuan’s position in the international financial scene, while ensuring a safer environment for investors in the rapidly evolving digital economy.

Source: https://www.labuanfsa.gov.my/general-info/media/press-release-on-labuan-fsa-strengthens-regulatory-framework-for-labuan-money-brokers-amidst-emerging-risks