Bank Negara in Malaysia is planning to appoint a number of managers to manage up to US$2 billion under an Islamic scheme; applications have closed for these mandates and short-listed firms are expected to be announced soon. Asia Asset Management understands that fund houses do not need to have a local presence to bid for these mandates.
Malaysia is keen to build on its recent progress in Islamic finance and banking and specific to asset management, the authorities have established a scheme overseen by the Securities Commission (SC) to promote the sector. The SC recently granted three licences to fund houses to operate under the Malaysia Islamic Finance Centre which confers certain tax advantages and privileges, including being allowed to fully own a local subsidiary and to market and distribute Islamic products. The first batch of the Islamic fund licences were granted to Kuwait Finance House (Malaysia), DBS Asset Management and CIMB-Principal Islamic Asset Management.
As reported in Asia Asset Management, the Islamic licensees will enjoy tax-free status until 2016. They are permitted to have 100% foreign equity and are allowed to invest all their assets overseas.
Foreign fund managers can also access the local market through another scheme that the SC launched a few years ago. Five global firms have been licensed, Aberdeen Asset Management, Nomura Asset Management, BNP Paribas Asset Management, Credit Agricole Asset Management and Franklin Templeton Investments – but they are not permitted to market and distribute retail funds, only to manage funds from institutional investors.
