Securities Commission Malaysia publishes guide on waqf

Source: Securities
Commission
Malaysia.

With Islamic finance gaining traction across many parts of the world, the development of waqf can play a significant role in attracting greater interest and participation in the Islamic finance industry and entrenching Islamic finance activities.

Waqf Assets: Development, Governance and the Role of Islamic Capital Market is a guide for waqf institutions, religious bodies, practitioners and other interested parties who wish to explore opportunities in developing waqf assets through the Islamic capital market and provides recommendations on governance best practices for waqf institutions that intend to leverage the Islamic capital market for fundraising and investment. 

The book can be purchased for RM80 at the SIDC Bookshop located at the Securities Commission Malaysia headquarters*. For every purchase, RM20 will be donated to initiatives supporting waqf development. 

*3 Persiaran Bukit Kiara, Kuala Lumpur. 

Islamic finance can complement shift towards sustainable and responsible investments

Source: Securities Industry Development Corporation. Zainal Izlan Zainal Abidin,
Executive Director, Islamic Capital Market Business Group,
Securities Commission presenting his opening remarks
at the Islamic Markets Programme 2014.

The Securities Commission Malaysia (SC) and its training and development arm, the Securities Industry Development Corporation (SIDC), hosted the 9th Annual Islamic Markets Programme (IMP) themed 'Strengthening the Wellbeing of Societies' from 11 to 14 August 2014 in Kuala Lumpur, Malaysia, and saw 48 Islamic finance regulators, experts and practitioners from eight countries discuss the evolving role of Islamic finance in enhancing the wellbeing of societies and what it will take to ensure sustainable development of global Islamic finance. 

Speaking at the opening of the programme, Zainal Izlan Zainal Abidin, Executive Director, Islamic Capital Market Business Group at the SC said, “The Islamic capital market may seek to capitalise on a growing shift in preference especially in the developed markets towards sustainable and responsible investments, or SRI. 

"Islamic finance and SRI share similar underlying principles which suggest that the current significant growth of the SRI market can also potentially benefit the Islamic finance industry. The greater awareness as well as demand for social responsibility in conducting business is driving the growth of the SRI segment, and Islamic finance - which places similarly strong emphasis on preserving commercial and social balance - can offer a distinctive value proposition for global investors.”

The IMP is an established annual international platform for global subject matter experts, regulators and industry players to share information and insights on Islamic finance topics ranging from product innovation, human capital development and interpretation of shari'ah principles to issues of ethics and governance. 

First organised in 2006 with the objective of developing a talent pool and promoting knowledge sharing in the Islamic capital market, the IMP has hosted 401 participants from 38 countries to date and is an integral part of Malaysia’s strategy to become a recognised Islamic financial centre of excellence. This year’s event welcomed the first participants from Kuwait, Oman and Russia.

Securities Commission Malaysia updates list of shari'ah-compliant securities

The Securities Commission Malaysia (SC) has released an updated list of shari'ah-compliant securities approved by its Shariah Advisory Council (SAC).

The updated list features a total of 665 shari'ah-compliant securities, including 28 newly classified shari'ah-compliant securities and excludes nine from the previous list issued in November 2013. These counters constitute 73% of the 905 listed securities on Bursa Malaysia.


The full list, which is updated twice a year based on the companies’ latest annual audited financial statements, is now available on the SC website. The next list will be made available in November 2014.

Bai' 'inah ruling may serve to bring Islamic banking in Malaysia and the Gulf closer together

Malaysia's Securities Commission has published new rules for bai' 'inah, a type of Islamic financing contract, in a move that may see Malaysia and the Gulf states converge with regards to shari'ah-compliant banking, Reuters reports.

Bai' 'inah is controversial as in one version of it, a financial institution or individual could contract to sell a borrower an item on credit, but the borrower does not get to keep the item as the institution then buys that item back for a lower amount in cash. The person ends up with some cash, just as if it were a loan, but has to pay the agreed selling price to the financial institution, just as if the difference between the two prices were interest on the loan.

In other versions, the borrower may be entitled to keep the item and have the option to resell it back to the institution.

According to Reuters, Islamic banks from the Gulf tend not to offer bai' 'inah, whereas it is quite common in Malaysia. Agrobank's Agrocash-i, AmBank's Personal Financing-i, HSBC's Amanah Personal Financing-i and Term Financing-i products, and Maybank Islamic's ExeCash-i are all examples of Islamic financing under the bai' 'inah principle.

Reuters said that the new rules do not ban bai' 'inah but make compliance more demanding, ultimately encouraging a shift towards other forms of Islamic financing.
 
An explanation of the bai' 'inah controversy is here and comments on developments in 2012 here. A list of Islamic capital market statistics for Malaysia can be viewed here.