The SC regulates the issue and offer of corporate bonds and sukuk (collectively referred to as “Private Debt Securities” or “PDS”) in Malaysia and is the sole approving authority for prospectuses (other than prospectuses issued by unlisted recreational clubs). The SC will complete its evaluation within the stipulated time period below:
- The approval period for corporate proposals involving the issue/offer of corporate bonds and sukuk is within 14 working days from the date of submission, subject to full and complete information being received.
- The approval period for corporate proposals involving asset-backed securitisation (ABS) is within 28 working days from the date of submission, subject to full and complete information being received.
- Proposals involving the issue/offer of PDS by multilateral institutions, Ringgit-denominated PDS that have been assigned a local rating of AAA by domestic credit rating agencies recognised by the SC, foreign currency-denominated PDS that have been assigned an international rating of at least BBB- (or its equivalent) by an international credit rating agency and quasi-sovereign institutions and the issuance of structured products by eligible issuers are treated as being deemed approved upon the receipt of complete submission of the relevant proposals to the SC.
The SC ensures that all submissions for the proposed issuance of PDS are in compliance with its guidelines and practice notes. Strong emphasis is given to ensuring full and adequate disclosures of material information to prospective investors to assist them in making informed decisions in respect of their investments.
In the case of an ABS proposal, where the assets to be securitised include real property, the SC will review the valuations of the respective properties, as prepared and submitted by the professional valuation firm, so as to ensure the valuations are reasonable and in the best interest of investors.
The SC will also ensure that any issuances/offers of sukuk are Syariah compliant and consistent with the principles as approved by the Syariah Advisory Council. As matters governing and application of Syariah principles are complex and complicated, pre-submission consultations with the SC are highly encouraged. Issuers are further encouraged to internationalise the issuance process by structuring the issuance based on globally-accepted Syariah principles, thereby stamping and entrenching Malaysia’s position as the most advanced and developed Islamic financial centre within the global financial scene.
In assessing a PDS application, there is a vigorous internal challenge process to ensure thoroughness, consistency, transparency and accountability within the process. There is also much communication between the principal advisers and the SC, right from the pre-submission consultations stage through to post-decision meetings.