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From Left to Right: Shamsul Akmal Ahmad, Director, Islamic Capital Market, Bursa Malaysia (Interim); Selvany Rasiah, Chief Commercial Officer, Bursa Malaysia; Datuk Seri Tajuddin Atan, CEO, Bursa Malaysia; Professor Dr. Ashraf Md Hashim, Chairman, Shariah Committee of Bursa Malaysia; Professor Dr Younes Soualhi, Member, Shariah Committee of Bursa Malaysia; and Dr Shamsiah Mohamad, Member, Shariah Committee of Bursa Malaysia
Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) yesterday launched the Islamic Securities Selling and Buying Negotiated Transaction (ISSBNT) framework. ISSBNT is the world’s first Shariah-compliant alternative to Securities Borrowing and Lending (“SBL”) and was developed to provide a new mechanism for institutional Islamic capital market participants to trade with more flexibility, while still adhering to principles of Islamic finance.
Bursa Malaysia Chief Executive Officer, Datuk Seri Tajuddin Atan said, “Today’s innovative launch is yet another step in our journey towards ensuring that Malaysia remains as the world’s leading, fully integrated Islamic investing marketplace offering a complete set of Islamic financial market instruments and trading alternatives.”
Locally, the conventional SBL market has seen a growth from RM0.4 billion in October 2012 to RM4.7 billion in October 2017. ISSBNT was developed to cater for the need to have a Shariah-compliant version of SBL, especially when considering the massive size of Islamic Asset Under Management in Malaysia, which stood at RM161 billion as at September 2017.
The ISSBNT framework was designed based on the Securities Borrowing and Lending Negotiated Transaction (SBLNT) framework and is expected to:
- facilitate hedging and risk management activities of Islamic fund and wealth managers; and
- advance the development of the Islamic Exchange Traded Funds (iETFs) through the spurring of liquidity.
“The nation’s Islamic finance framework and developments have placed Malaysia in a global leadership position. Introducing platforms and services that are global ‘firsts’ or novel in the Islamic capital market sphere is something that is not new to Bursa Malaysia. This new offering reinforces our unique position to provide ample conventional and Islamic products and services in the marketplace. Bursa Malaysia will continue to make progress towards being the center or artery of Shariah investments by domestic and international investors.” Datuk Seri Tajuddin added.
As an integrated exchange, Bursa Malaysia offers a good breadth of quality stocks. Out of 902 companies listed on the Exchange, 76% or 686 companies are Shariah-compliant. The Shariah market capitalisation as at end November 2017, makes up 61.1% of the total market capitalisation of RM1.84 trillion. The Exchange offers investors a wide choice of Shariah investments products such as i-ETFs, i-REITs and Exchange Traded Bonds and Sukuk (ETBS).
ISSBNT activities will be facilitated through the Trading Clearing Participants and Non-Trading Clearing Participants of Bursa Malaysia Securities Clearing Sdn. Bhd.
For more information on ISSBNT, visit http://www.bursamalaysia.com/market/products-services/islamic-securities-selling-buying-negotiated-transaction-issbnt/issbnt-circulars
