In its effort to develop the Islamic capital market, the Commission established the Islamic Instrument Study Group (IISG) in 1994 with a membership comprising Shariah consultants and corporate figures. The group discussed and made decisions on issues related to the Islamic capital market in Malaysia. Eight meetings were held throughout 1995–1996.

The Commission viewed that it was important for the IISG to expand its role, and consequently, it was upgraded to a more formal body called the Shariah Advisory Council (SAC) on 16 May 1996. Its establishment was endorsed by the Minister of Finance and it was given the mandate to ensure that the implementation of the Islamic capital market complied with Shariah principles. Its scope of jurisdiction is to advise the Commission on all matters related to the comprehensive development of the Islamic capital market and to function as a reference centre for all Islamic capital market issues. This effort is to ensure ICM in Malaysia continues to develop by welcoming innovations in structuring capital market products. In this regard, the SAC resolutions continue to be a scholarly reference avenue for ICM-related issues particularly in providing greater consistency and clarity to issuers, intermediaries and investors.