On Oct. 2, LBN FSA proposed guidelines on market conduct for firms.
LBN FSA proposed Guidelines for market conduct for digital financial intermediaries (DFIs), to promote ethical, transparent, and fair practices in digital financial services.
Applies money-brokers, fund managers, payment systems, licensed by LBN FSA.
Key Points
Proposed guidance sets out the minimum requirements on market conduct practices to be adhered by Labuan financial intermediaries undertaking digital financial services.
Provides definitions for terms like digital financial services, DFIs, client digital asset.
DFIs must operate with honesty, transparency, and integrity, ensure accuracy and security of client information, safeguarding against unauthorized access and loss.
Require segregation of client money from DFIs’ own accounts, mandate disclosure of terms, conditions, fees, charges, procedures for reporting suspected fraud or breaches.
Policies, procedures must be in place to manage conflict of interest, shall be set up for surveillance of trading activities to prevent and report market manipulative.
Disclose of terms and conditions to each client and maintain agreement terms.
Advertisements must be clear, fair, not misleading, shall include risk statements.
Provide means for clients to file complaints easily, clear instructions for the process.
Effectiveness
The consultation is open until Oct. 31, 2023.
Dec. 2023 Final Guidelines and FAQs
On Dec. 29, 2023, LBN FSA published the Guidelines on market conduct for Labuan digital financial intermediaries, effective Jan. 1, 2025 but early adoption is encouraged.
Provide the minimum requirements on market conduct practices to be adhered to by Labuan financial intermediaries undertaking digital financial services.
Applicable to any digital financial intermediary licensed and approved by LBN FSA.
Any person who fails to comply with the guidelines may be subject to enforcement actions which include a compound and/or an administrative penalty under section 36B and section 36G of the Labuan financial services and securities act 2010 (LFSSA).
LBN FSA also published frequently answered questions relating to the guidelines.
