Labuan FSA takes challenges in stride in 25-year journey

LABUAN: As the Labuan Financial Services Authority (Labuan FSA) marks its 25th anniversary this year, the regulatory body for the Labuan International Business and Financial Centre (IBFC) has been dealing with a host of challenges throughout its more than two decades journey.

Director-general Nik Mohamed Din Nik Musa said the challenges have led Labuan FSA to create significant new opportunities for growth, emerge stronger and become a more-agile regulatory body.

“Despite the various challenges, especially regulatory challenges, facing Labuan IBFC, one fact that becomes increasingly clear for Labuan FSA is that it has to be agile. “Agile to developing solutions that address the evolving needs of international regulatory reforms, businesses and financial markets to match the rapidly evolving trend and catch up with the latest global developments,” he said in an interview with Bernama Thursday in conjunction with Labuan FSA’s 25th anniversary (1996-2021) this year.

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Nik Mohamed said Labuan FSA needs to align to global development to ensure that Labuan IBFC continues to remain relevant in the competitive business landscape.

“This will also help Labuan IBFC adopt new norms in the changed business landscape such as increase utilisation of digital channel, more engagement with the industry to forge more facilitative or market-boosting initiatives to spur growth, enhance existing business and regulatory policies and processes for niche sectors such as digital financial services, captive insurance, and Islamic finance,” he said.

He said Labuan continues subscribing to international best practices and is a member of the fraternity of regulators in various international organisations such as the International Association of Insurance Supervisors (IAIS), Group of International Insurance Centre Supervisors (GIICS), Group of International Finance Centre Supervisors (GIFCS), Asia/Pacific Group on Money Laundering (APG), Financial Action Task Force (FATF), and International Organisation of Securities Commissions (IOSCO).

“This has enabled us to establish different channels of cooperating with overseas regulators in supervising the activities of Labuan entities,” he said.

He said the Covid-19 pandemic has upended nearly every aspect of life, from personal (how people live and work) to professional facet (how companies interact with their customers, how customers choose and purchase products and services, and how supply chains deliver them).

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“The pandemic has profoundly impacted and posed an unprecedented challenge to Labuan FSA and Labuan IBFC. The global economic slowdown and travel restrictions had impacted some of the business activities in Labuan IBFC,” he said.

Nik Mohamed Din said Labuan FSA has provided temporary regulatory reliefs to alleviate some of the regulatory burdens and offered flexibility to the market to keep businesses viable during these trying times.

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