MALAYSIA: Following a proposal made in the 2014 budget speech last October, the Securities Commission Malaysia (SC) has introduced the Sustainable and Responsible Investment (SRI) Sukuk Framework. The guideline is part of the regulator’s developmental agenda to facilitate the creation of an ecosystem conducive for SRI investors and issuers, and is also in line with the rising trend of green bonds and social impact bonds that have been introduced globally to facilitate and promote sustainable and responsible investing. According to Ranjit Ajit Singh, the chairman of the SC: “Combined with Malaysia’s leading position in the global Sukuk market, this framework will further enhance the country’s value proposition as a centre for Islamic finance and sustainable investments.” Due to shifts in investor demographics, there are growing concerns over environmental and social impact of business and greater demand for stronger governance and ethics from businesses. SC believes that the Malaysian capital market is well-positioned to capitalize on these changing trends and facilitate sustainable and responsible investing. According to a statement by the regulator, the new Sukuk framework is an extension of the existing rules: and therefore all other requirements in the guidelines on Sukuk continue to apply. Intended to meet the demand of both retail and sophisticated investors, the new framework affords access to a wider range of investment products and aims to facilitate greater participation in the Sukuk market. The additional areas addressed in the framework for the issuance of SRI Sukuk include utilization of proceeds, eligible SRI projects, disclosure requirements, appointment of independent parties and reporting requirements.
Posted on: Fri, 29 Aug 2014 13:56:39 +0000
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