The ‘Report on Asset Securitisation in Malaysia – The Way Forward for the Malaysian Market’ was prepared by the Asset Securitisation Consultative Committee (ASCC), in consultation with the Securities Commission (SC).

The ASCC comprises market professionals, including lead managers, legal advisers, accountants, rating agencies and representatives from the national mortgage corporation. The National Bond Market Committee, which is chaired by the Secretary General of Treasury Tan Sri Dato’ Dr. Samsudin Hitam and oversees the development of the bond market in Malaysia, gave its seal of approval to the report last month. The report is available on the SC website at www.sc.com.my.

SC Director Dr. Nik Ramlah Nik Mahmood said the report identified legal, regulatory, tax and accounting impediments to the development of asset securitisation, and more importantly offered solutions which would lead to an efficient and facilitative framework.

“We are confident that by putting in place a more facilitative framework for asset securitisation, the market will increasingly realise and capitalise on the potential benefits of this product,” she said.

Asset securitisation was introduced in Malaysia only a year ago, following the release of the Guidelines on the Offering of Asset Backed Debt Securities by the SC in April 2001. Since then, it had approved seven securitisation proposals amounting to over RM5.4 billion.

Dr. Nik Ramlah also said that the proposed framework would complement the Guidelines on the Offering of Asset Backed Debt Securities.

She said the SC has already started work in line with some of the proposals outlined in the report, particularly, in the areas of tax, accounting as well as other regulatory issues. Among others, the SC has submitted a comprehensive tax proposal to the Ministry of Finance on the creation of a tax neutral framework for securitisation transactions. Further, the Malaysian Accounting Standards Board has set up a sub-working group to study and clarify appropriate accounting treatment that may be applicable for securitisation transactions.