Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has, at its 184th meeting held on 28 April 2016, discussed on the issue of Shariah non-compliant activities for companies with hotel and resort operations under the Shariah screening methodology.
Issue
The issue in discussion was on the applicability of the 20-per cent benchmark for contributions from hotel and resort operations under the Shariah screening methodology
Resolution
The SAC has resolved that the 20-per cent benchmark on hotel and resort operations under the business activity benchmarks in the Shariah screening methodology is no longer applicable since the main purpose of hotel and resort operations was to provide accommodation.
Notwithstanding the above, other benchmarks in relation to other Shariah non-compliant activities under the business activity benchmarks in the Shariah screening methodology remain applicable for companies with hotel and resort operations.