Securities Commission Malaysia issues new Guidelines on Islamic Capital Market Products and Services

20 December 2022

On 28 November 2022, the Securities Commission Malaysia (“SC”) issued the Guidelines on Islamic Capital Market Products and Services (“ICMPS Guidelines”). Further to the ICMPS Guidelines, the following guidelines have been revised:

  • Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework (LOLA Guidelines);
  • Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors;
  • Guidelines on Unit Trust Funds;
  • Guidelines on Listed Real Estate Investment Trusts;
  • Guidelines on Real Estate Investment Trusts;
  • Guidelines on Exchange-traded Funds;
  • Guidelines on Private Retirement Schemes;
  • Guidelines on Recognised Markets;
  • Guidelines on the Registration of Venture Capital and Private Equity Corporations and Management Corporations;
  • Licensing Handbook; and
  • Guidelines on the Compliance Function for Fund Management Companies.

General amendments to the guidelines above include:

  • Removal of the relevant Shariah requirements which are now provided under the ICMPS Guidelines; and
  • Insertion of paragraphs to reflect the changes introduced by the ICMPS Guidelines.

In addition, amendments have been made to the following guidelines:

  • Revised Guidelines on Listed Real Estate Investment Trusts
    • Enhancements to governance-related requirements under the guidelines to streamline the requirements applicable to listed issuers on Bursa Malaysia.
  • Revised Guidelines on Unit Trust Funds
    • Amendments to disallow money market funds from having an accumulation of income feature for non-individual unit holders.
    • Consequential amendments pursuant to the revision of the Guidelines on Exchange-traded Funds and Guidelines on Private Retirement Schemes.
  • Revised Guidelines on Private Retirement Schemes
    • Substituting the terms “non-permissible” and “non-approved” with “Shariah non-compliant”.
  • Guidelines on the Registration of Venture Capital and Private Equity Corporations and Management Corporations
    • Expanding the investor base eligible to participate in venture capital and private equity funds;
    • Clarifying that the requirement for registration is premised on the carrying out of the regulated activity of fund management;
    • Simplifying the registration framework and streamlining requirements under the guidelines; and
    • Consequential amendments to the implementation of the Electronic Application System (EASy).
  • Revised Venture Capital Tax Incentives Guidelines
    • Consequential amendments following the amendments made to the Guidelines on the Registration of Venture Capital and Private Equity Corporations and Management Corporations; and
    • Providing for the registration of a venture capital company managed by a venture capital management company for tax incentive purposes as required under the relevant tax orders.