Securities Commission of Malaysia shows support for Islamic wealth management sector - IFN

Securities Commission of Malaysia shows support for Islamic wealth management sector

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MALAYSIA: As one of the world’s leading Islamic funds players, Malaysia is currently home to 169 Shariah compliant funds and 19 licensed Islamic fund managers. In his speech on the 4th September at the public lecture on Islamic wealth management by INCEIF Center for Wealth Management and BNP Paribas, Ranjit Ajit Singh, the chairman of the Securities Commission of Malaysia (SC), affirmed the regulator’s commitment to position Malaysia as the center of the global Islamic funds industry through consistent regulatory efforts and strategies. Among the strategies currently in play by the SC is to encourage foreign investment firms that have been targeted by the regulator to enter the Malaysian market. Ranjit also expressed his confidence in the government of Malaysia’s support towards facilitating growth in this sector, while urging Islamic financial institutions and investment firms to provide innovative solutions to their clients. Tax incentives for Islamic financial products, a successful track record in fund raising and a high savings rate worth an estimated RM1 trillion (US$303.85 billion) all bode well for the furtherance of Malaysia’s Islamic wealth management industry, he added. However, the main challenge, he said was to ensure that these pools of savings are intermediated through the capital markets to effectively address needs in the domestic market. A more regional approach with regards to cross-border expansions was also identified as a potential driver to the sector. As of the 30th June 2013, data by the SC shows that total Islamic assets under management (AUM) in Malaysia stood at RM82.23 billion (US$24.98 billion), accounting for 14.8% of total industry assets. According to the regulator, total Islamic AUM in Malaysia is projected to reach RM322 billion (US$97.83 billion) by the year 2020 on the back of strong demand for local Shariah compliant funds. A report published by Ernst & Young said that Islamic assets have seen an average annual growth of 19% over the last four years.