Navigating Securities Licenses Across Offshore Jurisdictions
In the complex realm of financial services, obtaining a securities license is the compass guiding professionals in marketing and selling investments (inclusive of securities) to clients. However, obtaining a securities license is no easy feat, as there are different types of securities licenses tailored to the kinds of products you want to sell, the compensation and the kind of services you want to provide in the global financial landscape.
In the United States, the Financial Industry Regulatory Authority (FINRA) offers the Series 7 license, also known as the general securities representative (GS) license, which has the broadest reach in the securities industry, allowing holders to sell almost all types of securities. The Series 7 exam is by far the most difficult of all the securities exams and requires the longest time of completion.
Venturing into Asia, Singapore mandates companies that wish to conduct investment activities involving securities and futures to secure a Capital Market Services (CMS) License. In Hong Kong, the Securities and Futures Commission (SFC) is an independent statutory body to regulate Hong Kong's securities and futures markets. The licensing spectrum encompasses Type 1, 4, 8 licenses pertaining to the purview of dealing in securities.
Meanwhile, in Labuan, the Labuan Securities License opens avenues for investment advisory services and administrative services, coupled with the ability to deal in securities. Noteworthy is the distinctive allure of Labuan, offering full foreign ownership of the firm and capital requirements lower than those prevailing in alternative jurisdictions. Read on to unveil the possibilities that Labuan unfolds in the realm of securities licensing.
What is a Labuan Securities License?
A Labuan Securities License is meant for an individual, known as a Labuan Securities licensee, who provides valuable investment advice or administrative services about securities for investment purposes and dealing in securities.
Why Choose Labuan
Strategic location to tap into the Asia Pacific market
Shared time zone with major Asian cities for seamless interaction
Excellent infrastructure and regulations within the Labuan IBFC
OECD whitelist jurisdiction status
Recognised by prominent exchanges for entity listing (such as Hong Kong, Singapore, Malaysia, Australia, and Dubai Exchanges)
100% foreign ownership with a minimum requirement of 1 shareholder and 2 directors
Low corporate tax rate of 3%
Absence of withholding tax, stamp duty, GST, import duty, sales or service tax, capital gains tax, inheritance tax
Void of tax on dividends to shareholders
Void of tax on director fees for foreign directors
Eligibility Criteria for Labuan Securities License
If you meet any of the following criteria, you are welcome to apply.
1
Any individual who holds a relevant degree or professional qualification to carry out activities of a securities licensee.
2
Applicant with a minimum qualification of a diploma holder and 3 years’ relevant experience in the capital market or direct experiences in such activities.
3
Any licensed / approved individual who undertakes the permitted activities from a country or jurisdiction who is a member of the International Organization of Securities (IOSCO).
Interested applicants may contact our team for pre-assessment on their eligibility for Labuan Securities License.
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Licensing & Operational Requirements of a Labuan Securities License
Investment Advisory
- Conduct securities analysis and make investment recommendations based on the client's investment objectives and financial situation.
- Provide securities advice including the issuance or promulgation of research report and analysis.
- Provide consultancy and advisory services related to corporate finance and financial planning matters for corporate clients.
Administrative Services
- Conduct securities analysis and make investment recommendations based on the client's investment objectives and financial situation.
- Provide securities advice including the issuance or promulgation of research report and analysis.
- Provide consultancy and advisory services related to corporate finance and financial planning matters for corporate clients.
Administrative Services
- Make submissions on behalf of clients to Labuan FSA in respect of securities and any other reporting requirements including issuing any documents which are deemed to be a prospectus.
Dealing in Securities
- Quote two-way prices and deal in securities.
- Arrange for the sale or purchase of securities including those that are not listed on a stock market of a stock exchange, issued by, belonging to or on behalf of clients.
- Underwrite securities and placement out of such underwritten securities to commensurate with the adequacy of its financial resources.
Any other activity as may be permitted by Labuan FSA from time to time.
- Maintain a minimum paid-up capital of MYR 150,000 or its equivalent in any foreign currency. Additional capital may be required based on a thorough risk management assessment, considering the licensee’s risk profile, nature and complexity of business.
- Maintain a professional indemnity insurance policy with a minimum coverage of MYR 1 million or its equivalent in any foreign currency.
- Establish an operational office in Labuan with a minimum number of 2 full-time employees and a minimum annual operating expenditure of MYR 100,000. You also have the flexibility to extend your reach by setting up a marketing office anywhere in Malaysia.
- Establish adequate policies and procedures for both its clients and operations, compliance measures, internal controls, corporate governance, and risk management, including its business continuity plan.
- Appoint an approved Labuan auditor to carry out an annual audit which must be submitted within 6 months after the closure of each financial year.
- Obtain prior approval from Labuan FSA on changes of identity, place of business or office in Labuan or outside Labuan, ownership, and shareholding. Any amendments or alterations to constituent documents or business plan should be promptly notified to Labuan FSA within thirty (30) days.
- Ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and the Guidelines on Anti-Money Laundering and Counter Financing of Terrorism through the appointment of a compliance officer.
- Consultation on eligibility and procedural guidance tailored to your profile.
- Profiling, due diligence and guidance on documentation preparation.
- Preparation of Business Plan, Financial Forecast and Operation Manuals.
- Submission and supervision of the application process until approval.
- Acting as your liaison and contact point with LFSA, arranging for interviews (if any).
- Tracking the license approval and handling all queries from LFSA.
- Advisory services on the appropriate company structure post-approval.
- Assistance in setting up onshore and offshore bank accounts.
- Assistance in establishing operational and marketing or co-located offices.
- Staff provision and office space rental.
- Internal audit and compliance advisory.
About FAA Advisory Limited
Comprising a team of seasoned professionals well-versed in Labuan's business landscape, FAA Advisory Limited extends a comprehensive suite of services covering corporate services, private wealth management, and licensing compliance administration, all tailored to meet the unique needs of our clients.
At FAA Advisory Limited, our expertise lies in delivering Labuan insights that facilitate business expansion, simplifying intricate processes, and offering valuable information to guide you through various facets of your journey.
Choose FAA Advisory as your trusted partner in navigating the dynamic business landscape of Asia. With our commitment, we are your gateway to success in Labuan and beyond.
Email: advisory@finarkasia.com | Phone number: +6010-931 6678