Registration of Shariah Advisers Guidelines

Issued/Effective: 10 August 2009

CONTENTS

1.0

PURPOSE

2.0

DEFINITIONS

3.0

APPLICATION

4.0

CRITERIA FOR REGISTRATION AND RENEWAL OF REGISTRATION

5.0

PROCEDURES FOR REGISTRATION AND RENEWAL OF REGISTRATION

6.0

REGISTRATION

7.0

CONTINUING PROFESSIONAL DEVELOPMENT

8.0

DEREGISTRATION

9.0

QUERIES AND SUBMISSIONS

APPENDICES

Form 1(a) : Application for the Registration of a Shariah Adviser/Renewal of the Registration of Shariah Adviser (Individual)
Form 1(b) : Application for the Registration of a Shariah Adviser/Renewal of the Registration of a Shariah Adviser (Corporation)
Form 2 : Statutory Declaration Form Form 3: Information on Foreign Shariah Adviser

1.0

PURPOSE

1.01

The Registration of Shariah Advisers Guidelines is issued by the Securities Commission Malaysia (SC) under section 377 of the Capital Markets and Services Act 2007 (CMSA).

1.02

Any person seeking to advise on the issuance of Shariah-based products or services referred to in paragraph 3.01 below is required to be a registered Shariah adviser.

1.03

These guidelines set out:

(a) the criteria for the registration and renewal of registration of a Shariah adviser; and
(b) the circumstances under which the SC can deregister a registered Shariah adviser.

1.04

The SC may, where it deems appropriate, allow any exemption or variation from the requirements of these guidelines

2.0

DEFINITIONS

For the purpose of these guidelines:

asset-backed securities

has the meaning as defined in the Guidelines on the Offering of Asset-Backed Securities.

chief executive

has the meaning as defined in the Capital Markets and Services Act 2007.

Corporation

has the meaning as defined in the Capital Markets and Services Act 2007.

Director

has the meaning as defined in the Capital Markets and Services Act 2007.

exchange-traded funds

has the meaning as defined in the Exchange-traded Funds Guidelines.

financial institution

means a financial institution licensed under the Banking and Financial Act 1989 which participates in the Islamic banking scheme.

foreign Shariah adviser

means an individual, corporation or Islamic Bank who has been appointed or has obtained the necessary approval to be a Shariah adviser in a foreign jurisdiction.

Islamic bank

means a bank licensed under the Islamic Banking Act 1983.

Islamic banking scheme

a scheme which allows conventional banking institutions to offer Islamic banking products and services using their existing infrastructure.

Islamic securities

has the meaning as defined in the Guidelines on the Offering of Islamic Securities and for the purposes of these guidelines, includes sukuk.

real estate investment trust

has the meaning as defined in the Guidelines on Real Estate Investment Trusts.

registered Shariah adviser

means an individual, corporation or a foreign Shariah adviser who is registered with the SC under these guidelines.

structured products

has the meaning as defined in the Guidelines on the Offering of Structured Products.

unit trust fund

has the meaning as defined in the Guidelines on Unit Trust Funds.

wholesale funds

has the meaning as defined in the Guidelines On Wholesale Funds.

3.0

APPLICATION

3.01

The products and services which require the services of a registered Shariah adviser are set out in Table 1.

Table 1: Shariah-based Products and Services Regulated by the SC
Category Shariah-based products and services
Collective investment schemes
  • Unit trust funds
  • Real estate investment trusts
  • Exchange-traded funds
  • Wholesale funds
Other products and services
  • Islamic securities or sukuk and asset-based securities
  • Structured products
  • Stockbroking services

3.02

The SC may extend the application of these guidelines to any other Shariah-based products and services other than those products and services stipulated in the table above.

4.0 CRITERIA FOR REGISTRATION AND RENEWAL OF REGISTRATION

4.01

The SC may register or renew the registration of a registered Shariah adviser subject to the applicant satisfying the criteria set out below.

   
  Individual
4.02 Qualification
4.03

The applicant should have at least a degree in Shariah, particularly in fiqh muamalat or Islamic jurisprudence from an institution recognised by the Malaysian government.

Experience

The applicant should-

(a) have at least two years of relevant experience and/or exposure in Islamic finance; or
(b) have at least one year of relevant experience and/or exposure in Islamic finance and have attended at least five relevant Islamic finance courses/workshops.
4.04

Fit and proper criteria

The applicant must not –

(a) have been convicted, whether within or outside Malaysia, of an offence involving fraud or other dishonesty or violence or the conviction of which involved a finding that he acted fraudulently or dishonestly;
(b) have been convicted of an offence under the securities law;
(c) have contravened any provision made by or under any written law appearing to the SC to be enacted for protecting members of the public against financial loss due to dishonesty, incompetence or malpractice by persons concerned in the provision of financial services or the management of companies; or
(d) have contravened any provision made by or under any written law appearing to the SC to be enacted for protecting members of the public against financial loss due to the conduct of undischarged bankrupts.
Corporation
4.05 Subject to paragraph 4.07, where the applicant is a corporation, it should employ at least one full-time officer to be responsible for Shariah matters for the products and services provided for in Table 1. It must also satisfy the criteria set out in paragraphs 4.02 – 4.04.

4.06

Fit and proper criteria

The applicant or any of its directors or chief executive must not-

(a) have been convicted, whether within or outside Malaysia, of an offence involving fraud or other dishonesty or violence or the conviction of which involved a finding that it or he acted fraudulently or dishonestly;
(b) have been convicted of an offence under the securities laws; or
(c) have contravened any provision made by or under any written law appearing to the SC to be enacted for protecting members of the public against financial loss due to dishonesty, incompetence or malpractice by persons concerned in the provision of financial services or the management of companies; or
(d) be an undischarged bankrupt whether within or outside Malaysia.

4.07

Registration with the SC is not required, where the corporation is an Islamic bank or a financial institution approved by Bank Negara Malaysia to carry out Islamic Banking Scheme. However, the corporation must observe that at least one of its Shariah committee members meets the eligibility criteria set out in paragraphs 4.02 – 4.04 above.

  Foreign Shariah adviser

4.08

To be a registered Shariah adviser, a foreign Shariah adviser is not required to satisfy the conditions in paragraphs 4.02 – 4.04 or paragraphs 4.05 – 4.07. However, the foreign Shariah adviser is required to submit to the SC, Form 3 attached to these guidelines and a copy of the letter of appointment or any other form of verification that would demonstrate his appointment as a Shariah adviser from a foreign institution.

5.0

PROCEDURES FOR REGISTRATION AND RENEWAL OF A REGISTRATION

5.01

To register or to renew the registration as a Shariah adviser, an applicant is required to submit to the SC the relevant forms and documents specified in Table 2 below.

5.02

A registered Shariah adviser must submit his application for renewal of registration to the SC no later than 30 days before the expiry date of registration.

Table 2: Forms and documents to be submitted to the SC
For individual
(i) Form 1(a): Application for the Registration of a Shariah Adviser/Renewal of Registration of a Shariah Adviser
(ii) Form 2: Statutory Declaration Form
(iii) A copy of the national registration identity card or passport
(iv) A copy of degree of relevant academic certificate
For corporation
(i) Form 1(b): Application for the Registration of a Shariah Adviser/Renewal of Registration of s Shariah Adviser
(ii) Form 2: Statutory Declaration Form
(iii) A copy of a degree or relevant academic certificate by a fulltime designated Shariah officer.
(iv) A copy of Form 9 (certificate of incorporation of private company) of the Companies Act 1965 or any equivalent form under foreign jurisdiction)

5.3

In addition to the above, the applicant must also furnish any other information or documents as may be required by the SC.

6.0

REGISTRATION

6.01

The SC may register or renew the registration of a Shariah adviser subject to such conditions or restrictions as it thinks fit.

6.02

The registration will be valid for a period of three years after the date it is issued or on such later date as may be specified by the SC in writing.

7.0

CONTINUING PROFESSIONAL DEVELOPMENT

7.01

A registered Shariah adviser is encouraged to keep abreast with current developments in Islamic finance.

7.02

The applicant when applying for registration or renewal of registration is encouraged to notify the SC of any relevant experience in Islamic finance, such as-

(a) courses attended;
(b) courses facilitated; or
(c) contribution made to the development of Islamic finance.

8.0

DEREGISTRATION

8.01

The SC may deregister a registered Shariah adviser where-

(a) the registered Shariah adviser does not fulfil any of the requirements as stated under paragraph 4.04 or paragraph 4.06 ; or
(b) the registered Shariah adviser contravenes any conditions or restrictions imposed on the registration.

8.02

The SC will not exercise its power to deregister without first giving the registered Shariah adviser an opportunity to be heard.

9.0 QUERIES AND SUBMISSIONS
9.01 All queries and submission of relevant forms and documents should be addressed to-

The Chairman

Securities Commission Malaysia

3 Persiaran Bukit Kiara Bukit Kiara

50490 Kuala Lumpur Malaysia

(Attention: Islamic Capital Market Department)

Form 1 (a)