LIBFC resilient in face of global market challenges
The Labuan International Business and Financial Centre (LIBFC) remained resilient in 2019, in the face of challenges in the global market.
The centre maintained its growth in key business sectors and witnessed a surge in innovative business ventures – in tandem with Labuan IBFC’s progressive shi towards more digital-based financial business.
As the centre unveiled its Market Report 2019, it also marks the Labuan IBFC entering its third decade of operation since 1990.
While 2019 had been a year of sustained growth for Labuan IBFC, it had been a challenging start for 2020 as global markets being impacted by the Covid19 pandemic and distressed oil prices.
Considering the uncertainties looming in the international business scene, Labuan FSA has been closely monitoring the situation and taken preemptive measures to maintain stability and sustainability of the industry.
A set of regulatory reliefs which provided administrative flexibilities and financial reliefs was given to Labuan entities to cushion the impact and minimize disruption to business operations arising from the Covid-19 outbreak.
Labuan FSA will continue monitoring the situation to ensure that the centre’s business operations and the delivery of services remain uninterrupted.
Further reliefs will be considered as the condition evolves and based on engagements with the industry players.
During these challenging times, the Labuan entities including the financial institutions which operate in multiple markets within the Asia region continue to be able to provide services and business facilitation to their clients.
“The effects of Covid-19 are unprecedented. It has been a huge eye opener for everyone, and it remains to be seen how the landscape of financial intermediation will change with this pandemic,” Labuan FSA director general Datuk Danial Mah Abdullah said.
“From operational, regulatory and supervisory related aspects, we continue to monitor the situation and scan the environment for emerging risks and the possible threats that would undermine the stability of the centre, particularly those related to cybercrime and money laundering.
“Similar to other jurisdictions introducing measures to cushion the impact of the pandemic, Labuan FSA has provided Temporary Regulatory Reliefs to the industry to alleviate some of the regulatory burdens and to offer some level of flexibility.
“The reliefs cover among others, relaxations on administrative governance and market conduct requirements so as to ensure practicality in view of the current situation; flexibility on the technical requirements for the (re)insurance and (re)takaful liabilities; extension of period for the regulatory reporting and statistical submissions; as well as registration of company in terms of document submission.
“Of course, any global economic downturn will affect an IFC including Labuan IBFC, however once the economy rebounds so will activities in an IFC. Financial intermediation will continue to remain an integral part of the global economy, and IFCs are o en seen as the ‘lubricants of global trade and investments’ and hence in this regard, Labuan IBFC’s role will continue to be relevant.
“However, there will be recalibrations and some changes as to the manner this intermediation is done. In this respect, Labuan FSA will definitely need to recalibrate its strategies, to adopt to the new norms in a changed business landscape for Labuan IBFC.”