Labuan IBFC Inc yesterday signed a Memorandum of Understanding (MoU) with RAM Rating Services, Malaysia’s premier rating agency, to collaborate on RAM Ratings’ Labuan Entity Corporate Assessment (LECA™) service.
LECA™ is RAM’s new rating service for companies based in Labuan International Business and Financial Centre (Labuan IBFC). The LECA™ service for banks, (re)insurers and service providers, available from this month, was developed in consultation with Labuan Financial Services Authority (Labuan FSA), Association of Labuan Banks, Labuan Investment Banking Group, Labuan International Insurance Association and Association of Labuan Trust Companies.

LECA™ 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 Ratings will work with Labuan IBFC Inc – the market development agency of the midshore jurisdiction Labuan IBFC – to develop, promote and facilitate the adoption of LECA™.

“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, in a statement.

Mr Chris Lee Wai Kit, CEO of RAM Ratings, stated, “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.”

Datuk Danial Mah Abdullah, director-general of Labuan Financial Services Authority (Labuan FSA), said, “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 initiatives by other organisations towards increasing transparency in Labuan IBFC.”

In addition, Labuan IBFC CEO, 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.

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.

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