Know your risk before the regulator asks.
A risk management framework for your Labuan licence: risk appetite, registers, controls and monitoring across credit, market, operational, regulatory and reputational risk, built and run by us.
Make an enquiryA framework the board owns, not a binder on a shelf.
Licensed Labuan entities meet a supervisory expectation that compounds across the business. How do you document a risk framework that is proportionate to your activity, owned at board level, and able to show controls that work when Labuan FSA looks at it?
We build and run the risk framework for your Labuan licence as part of your wider compliance function. A risk register and control library, paired with a monitoring cycle, mean risk appetite is set by the board and evidenced in practice rather than written once and forgotten.
See what we handleA licensed Labuan trust company watching your risk.
QX Trust Co. Ltd is a Labuan Managed Trust Company headquartered in Labuan IBFC. We build and run the risk framework under your licence, not through an intermediary. We serve you in English, Chinese and Malay.
Make an enquiry2019
Labuan FSA licensed
LMT0081
Our Labuan licence
EN + ZH + MS
Language desks
Labuan IBFC
Headquartered
What we put in place.
Six building blocks of a working risk framework, sized to your licence type and the risks your business actually carries.
Risk appetite statement
The board-level boundary. It defines how much risk the entity will accept in pursuit of its objectives, pairing qualitative statements with quantitative limits so management decides inside a clear line.
Risk register
A documented list of identified risks. Each carries an inherent score before controls, the controls in place, a residual score after controls, a tolerance level, and a named owner.
Control library
The set of controls mapped to each risk. We define what the control is, who runs it, how often, and what evidence it produces, so a control is more than a line in a policy.
Risk categories
Coverage across credit, market, operational, regulatory and reputational risk. The weight on each follows the licence type, so a bank reads differently from a corporate licensee.
Monitoring and reporting
A defined cycle that tests controls, refreshes scores, and reports into the board or a risk committee. Risk appetite is reviewed against what the register shows in practice.
Governance and ownership
Reporting lines, committee terms of reference and a designated officer. The board keeps accountability for risk while we run the framework as an external arrangement.
From risk scoping to a live framework.
Four steps to stand up a risk framework, run by the team that maintains it afterwards.
Risk scoping and licence read
We map your business model, licence type and group structure to the risks that matter. This sets which categories carry weight and where the framework needs depth.
Appetite and register build
We draft the risk appetite statement for board approval and build the register: each risk identified, scored before and after controls, with a tolerance level and an owner.
Controls and governance
We design the control library, the reporting lines and the committee terms of reference, then align the framework with Labuan FSA supervisory expectations for your licence.
Monitoring and review
We run the monitoring cycle, test that controls hold, refresh the register, and report into the board, so the framework reflects the business rather than its launch date.
Treat each risk, do not just list it.
A register that records risk without acting on it adds little. A working framework decides what to do with each risk, then evidences the decision. Four responses cover the field, and we apply the right one to each entry.
- Avoid: remove the exposure entirely where the risk is not worth carrying.
- Reduce: put controls in place that lower the likelihood or the impact.
- Transfer: shift the exposure through insurance or a contractual route.
- Accept: hold the risk knowingly, inside the board's stated appetite.
- Every response is owned, scored after controls, and revisited on the monitoring cycle.
Frequently asked.
Direct answers on framework scope, risk appetite, the risk categories and outsourcing.
Do all Labuan licensees need a risk management framework?
Licensed Labuan entities are expected to operate a documented risk management framework proportionate to the size and nature of their business. The framework typically covers credit, market, operational, regulatory and reputational risk, with defined ownership, risk appetite, controls and reporting lines into the board or a risk committee. Labuan FSA assesses the framework as part of its supervisory expectations for licensees.
What does a risk management framework include?
A risk management framework usually includes a risk appetite statement, a risk register, a control library, defined risk ownership, a monitoring and reporting cycle, and governance into the board or a risk committee. It identifies risks, scores them before and after controls, assigns an owner to each control, and sets the level of risk the entity is prepared to tolerate.
What is a risk appetite statement?
A risk appetite statement defines how much risk an entity is willing to accept in pursuit of its objectives. It typically pairs qualitative statements with quantitative metrics and limits, so the board can set boundaries and management can make decisions inside them. The statement guides how individual risks in the register are scored against tolerance.
What types of risk does the framework cover?
For a Labuan licensee the framework typically covers credit, market, operational, regulatory and reputational risk. The relative weight of each category depends on the licence type and business model. A Labuan bank weights credit and market risk heavily, while a corporate licensee may centre on operational and regulatory risk. The framework is calibrated to the actual activity.
Is there a capital ratio requirement for Labuan banks?
Labuan FSA sets minimum risk-weighted capital ratio requirements for Labuan banks under its Guidelines on Banking and Islamic Banking Capital Adequacy Framework, in line with international Basel standards. Capital adequacy sits alongside the risk management framework, which identifies and controls the risks the capital base is held against.
Can a Labuan licensee outsource its risk management function?
Yes. Labuan FSA permits the outsourcing of operational risk and compliance work, provided the licensee retains accountability through a designated officer and board oversight, and the arrangement sits under a clear service agreement. We build and run the framework as an external arrangement while the board keeps ownership of risk appetite and final decisions.
Building or outsourcing a risk framework?
Tell us about your entity and your licence. We scope the risks, build the framework, and run the monitoring under our Labuan FSA licence.
Make an enquiry