Labuan Entity Corporate Assessment (LECA") will enhance intra and inter-Labuan cross business as the Labuan IBFC jurisdiction grows from strength to strength.
Kuala Lumpur, 21 January 2021 - RAM Rating Services Berhad (RAM Ratings), Malaysia's premier rating agency, and Labuan IBFC Incorporated Sdn Bhd (Labuan IBFC Inc) today inked a Memorandum of Understanding (MoU) to collaborate on RAM Ratings' Labuan Entity Corporate Assessment (LECA") service. RAM Ratings will work with Labuan IBFC Inc – the market development agency of the midshore jurisdiction Labuan International Business and Financial Centre (Labuan IBFC) – to develop, promote and facilitate the adoption of LECA".
LECA", RAM's new rating service for companies based in Labuan IBFC, evaluates the performance and financial standing of Labuan entities. A customised service, LECA" has been formulated in response to Labuan entities looking to encapsulate the global wholesale nature of their business dealings in Labuan IBFC. To ensure reliability and consistency, LECA" also applies RAM Ratings' established frameworks for credit and performance evaluation.
"RAM is thrilled to collaborate with Labuan IBFC Inc through this MoU. Having helped develop Malaysia's onshore financial markets over the last three decades, we look forward to expanding our services to the midshore jurisdiction of Labuan IBFC via LECA," said Tan Sri Amirsham A Aziz, Chairman of RAM Ratings.
Mr Chris Lee Wai Kit, Chief Executive Officer of RAM Ratings, elaborates: "LECA ratings facilitate clarity, transparency and insights for confident decision-making between Labuan companies and their counterparts. Through this MoU, RAM hopes to contribute to the long-term resilience and growth of Labuan IBFC."
"Labuan market participants can expect the RAM hallmarks of excellence and analytical rigour when they engage with RAM Ratings. Several Labuan entities have already enquired about obtaining a LECA rating from RAM," he added.
"With Labuan IBFC having entered its 30th year milestone last year, this bespoke assessment for Labuan entities will certainly add to the maturity of our midshore wholesale financial ecosystem while continuing to enhance our resilience amidst current global challenges. We also encourage similar initiative by other organisations towards increasing transparency in Labuan IBFC", said Datuk Danial Mah Abdullah, Director-General of Labuan Financial Services Authority (Labuan FSA).
Meanwhile, Labuan IBFC Inc Chief Executive Officer, Ms Farah Jaafar-Crossby, said: "As the jurisdiction is fast gaining global recognition, this is a coming-of-age for Labuan IBFC and our players. The benefits of transparency which LECA provides will assist us in enhancing our reputation as a transparent, well-governed midshore wholesale financial intermediation centre."
"As we are now home to almost 1,000 global licensed entities, we are keen to encourage intra-Labuan cross business links. For example, LECA will provide an independent first point of assessment between our reinsurance and banking license holders," she added.
As Asia's leading wholesale financial intermediation centre, Labuan IBFC has welcomed more than 16,000 registered companies since its inception in 1990. It has grown beyond serving Malaysia-based entities to include international organisations in banking, leasing, capital markets, insurance, reinsurance, risk management and wealth management.
RAM Ratings' LECA" service for banks, (re)insurers and service providers is available from January 2021. It was developed in consultation with Labuan FSA, Association of Labuan Banks, Labuan Investment Banking Group, Labuan International Insurance Association and Association of Labuan Trust Companies.
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