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.
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