The Securities Commission of Malaysia (SC) emerged as the “Best Regulator for Islamic Funds” at the inaugural Master of Islamic Funds Awards held in Dubai today. The win acknowledges the SC’s pioneering efforts and leadership role in the development and promotion of a comprehensive Islamic capital market.
“We are honoured by this award. It is an important recognition of our efforts to develop the Islamic investment management industry and the Malaysian Islamic financial market,” said the SC Chairman, Dato’ Zarinah Anwar.
The Master of Islamic Funds Awards confers international recognition for outstanding achievement in the global Islamic funds industry.
This international acknowledgement is also an endorsement of the government’s efforts to position Malaysia as a global Islamic financial hub that specializes in, among others, the origination, distribution and trading of Islamic funds and wealth management.
The Malaysian Islamic capital market has emerged as a centre of innovation for Islamic investment products. Its list of “world firsts” include the first global sovereign sukuk of USD600 million; the first rated Islamic residential mortgage-backed securities; the first exchangeable sukuk of USD750 million; and the first listed Islamic REITs. The Islamic capital market in Malaysia is sizeable-86 per cent of all listed companies on Bursa Malaysia are Shariah-compliant. In the first six months of 2007, half of the world’s sukuk amounting to USD5.9 billion were issued out of Malaysia. Additionally, w ith a net asset value of USD3.8 billion, Malaysia’s Islamic unit trust industry is the world’s largest.
” Malaysia has one of the most innovative and comprehensive Islamic capital markets in the world, offering global investors a strong and attractive value proposition. With a diversified range of products and services, significant size and scale, and end-to-end Shariah compliance, Malaysia is well-poised to be Asia’s gateway for Islamic investments,” said Dato’ Zarinah.
Malaysia ‘s lead position in the Islamic capital market is reinforced by its facilitative regulatory framework for Islamic investment products and services. Guided by a credible Shariah Advisory Council, the SC has introduced specially-tailored guidelines for the issuance of Islamic securities, REITs, unit trust funds and structured products. These are further backed by the disclosure and investor protection provisions within the regulatory framework for the conventional market which also apply to the Islamic products and services.
The SC also plays an active role in Islamic capital market capacity development to facilitate the sustainable development of this niche market. Each year, the SC’s flagship Islamic Markets Programme (IMP) ensures the transfer of knowledge and sharing of expertise among skilled market professionals in this specialised area.
Dato’ Zarinah said, “Markets and intermediaries can only grow faster if there are increasing cross border transactions and investments. Our track record in pioneering and commercialising new products, the depth and breadth of our markets and our robust regulatory framework will enable us to strengthen our linkages with other markets, and build bridges between currently fragmented pools of liquidity, thus allowing us to propel our Islamic capital market to the next phase of development.”
The co-winner of the award is the Dubai Financial Services Authority (DFSA). The SC and the DFSA signed a mutual recognition agreement in March 2007, opening the gateway for cross border distribution and marketing of Islamic funds between Malaysia and the Dubai International Financial Centre. This arrangement between regulators is the first of its kind between two Islamic markets.
The award was organised by Terrapin Pte Ltd, a global business media company that specialises in producing leading global funds conference series, among others. The eminent panel of judges included international Shariah experts and practitioners. They are Shaykh Yusuf Talal DeLorenzo, chief Shariah officer and board member of Shariah Capital Inc, in the United States; Michael Gassner, division head of Islamic Banking Group of Bank Al-Jazira in Saudi Arabia; Hari Bhambra, senior partner in Praesidium LLP of the United Kingdom; Rushdi Siddiqui, Global Director of Dow Jones Islamic Market Index Group; and Sajjad Chowdhry, co-founder of Dinar Standard in United Arab Emirates.