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Malaysia regulator amends sukuk rules in new sustainable investment plan

By Goh Thean Eu  
November 28, 2019

Malaysia’s securities regulator has revised its five-year-old framework for the offering of socially responsible Islamic bonds or sukuk to widen the appeal, including to foreign issuers, under a broad new roadmap to grow sustainable investments in the country.

The sukuk framework that was originally launched in 2014 has been amended to expand the list of eligible projects, enhance disclosure and reporting requirements, and clarify the role of external reviewers.

"The revisions are expected to increase its appeal to a broader demographic, including foreign issuers," Syed Zaid Albar, chairman of Securities Commission Malaysia (SC), told reporters on November 26.

Figures from the SC show that there were ten sukuk totaling 4.3 billion ringgit (US$1.03 billion) issued under the framework as of end-October.

Meanwhile, the SC’s new roadmap for sustainable and responsible investments (SRI) comprises five strategies, including widening the range of instruments, increasing the investor base, building a strong issuer base, and instilling a strong internal governance culture.

Each strategy has four strategic recommendations and the SC is targeting to implement them all in five years.

According to Mr. Syed Zaid, the roadmap is aimed at creating a “facilitative SRI ecosystem and chart the role of the capital market in driving Malaysia's sustainable development".

"We believe that the five overarching strategies and 20 recommendations identified in the SRI roadmap will be pivotal in accelerating the growth of SRI domestically and regionally," he says.