Islamic Banking

Malaysian Regulator Expands Retail Access To Bonds, Sukuk

Vanessa Doctor Asia Correspondent 10 September 2012

Malaysian Regulator Expands Retail Access To Bonds, Sukuk

The Securities Comission Malaysia has opened up more opportunities for retail investors to engage in bonds and sukuk, Islamic financial certificates, with the launch of a new framework. 

The new bonds and sukuk framework is in line with the SC's Capital Market Masterplan 2, which encourages greater investor participation in both markets. Under the scheme, retail bonds and sukuk may be issued and traded either on the Bursa Malaysia exchange or over-the-counter via appointed banks. 

During the initial phase, retail investors will invest in bonds and sukuk issued by the Malaysian government, subject to the issuers funding needs and requirements. In the succeeding phase, access will be expanded to include issuances by public-listed firms and banks under the Banking and Financial Institutions Act 1989 or Islamic Banking Act 1983. The issuance of the regulations and guidelines for this is expected in January 2013.

Malaysia is one of the largest markets for Islamic finance in the world, accounting for 60 per cent of global sukuk deals. According to Securities Comission Malaysia, the market also recorded MYR941 billion (US$302.6 billion) in total bonds outstanding as of 30 June 2012, reflecting continued growth. 

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