Kuala Lumpur, 7 September 2012

Wider access for retail investors to bonds and sukuk

The Securities Commission Malaysia (SC) today launched the Malaysian retail bonds and sukuk framework that provides retail investors direct access to invest in bonds and sukuk.

This launch is in line with the initiative set out under the SC’s Capital Market Masterplan 2 to facilitate greater retail participation in the bond and sukuk market. The framework enables retail bonds and sukuk to be issued and traded either on the exchange (Bursa Malaysia) or over-the-counter (OTC) via appointed banks. In this regard, the SC has approved Bursa Malaysia’s relevant rules and listing requirements to facilitate the offering of retail bonds and sukuk.

“The retail bonds and sukuk framework is intended to meet retail investors’ demand for access to a wider range of investment products. Issuers will also now have access to a larger pool of investors,” said Datuk Ranjit Ajit Singh, Chairman of the SC.

During the introductory phase, retail investors will be able to invest in bonds and sukuk issued or guaranteed by the Malaysian government. Issuances by these issuers will naturally be subject to their own funding needs and requirements.

In the next phase, retail investors’ access to bonds and sukuk will be expanded to include among others, issuances by public-listed companies and banks licensed under the Banking and Financial Institutions Act 1989 or Islamic Banking Act 1983. The issuance of the relevant regulations and guidelines for this is targeted for January 2013.

This phased approach will provide retail investors time to gain the necessary understanding and familiarity with investing and trading in bonds and sukuk. The SC, Bursa and the market will work closely to enhance the level of awareness and knowledge of investors in the bond and sukuk market.

Click here to view the frequently-asked questions regarding the retail bond and sukuk market.