Professional Documents
Culture Documents
Dr. Zaharuddin Abd. Rahman
Dr. Zaharuddin Abd. Rahman
Rahman
REGULATORY FRAMEWORK
The
purpose
of
the
regulatory
framework
is
to
protect
Commission (SC)
Bursa
Malaysia
Labuan
OVERVIEW:
In case of dispute resolution, authority is given to the SAC of BNM & SAC of
SC to provide a binding Shariah ruling in any court or arbitration proceedings
involving Islamic banking disputes & Islamic capital market disputes
( *Sections 56 & 57 CBMA, and Sections 316F & 316G CMSA)
CBMA: Central
Bank
of Malaysia
Reference Manual for the court for SAC Bank Negara
Malaysia
to comply
with
Act 2009
THE ROLES OF
SECURITIES COMMISSION
(SC)
In particular, SC plays the following roles; (i) Regulatory, (ii) Planner, (iii)
Development, (iv) Building of Foundation of Islamic Capital Market, and (v)
Enhancing Corporate Governance.
1) REGULATORY ROLE
o
2) ROLE AS A PLANNER
o
services;
ii) Create a viable market for the effective mobilization of Islamic funds;
iii) Ensure that there is an appropriate and comprehensive
accounting, tax, and regulatory framework for the Islamic capital
market; and
iv) Enhance the value recognition of the Malaysian Islamic capital
market
internationally.
3) DEVELOPMENT ROLE
o
SIDCs objectives;
i) To educate investors on matters related to investments, risk and reward;
ii) To enlighten investors with proper financial planning;
iii) To clarify their rights and responsibilities; and
iv) To promote professionalism and expertise among intermediaries such as
investment banks, brokerage firms, etc.
Islamic Capital Market Unit was established within SC in 1994 currently known
as the Islamic Capital Market Department, and the unit was authorized to
conceptualize and propose initiatives for the development of the Islamic capital
market.
In the same year, SC has formed the Islamic Instrument Study Group
(IISG);
i)
regulators;
ii)
capital market
iii)
issues; and
capital market
THE ROLE OF
BANK NEGARA MALAYSIA
(BNM)
Bank Negara Malaysia (BNM) is the central bank of Malaysia, it was established
on 26th January 1959 under the Central Bank of Malaya Ordinance 1958, to fulfill
following roles;
Over the years, the roles and responsibilities of BNM have evolved and expanded.
Today, BNM focuses on the three pillars of central banking, namely monetary
stability, financial stability, and the payment system.
BNM is vested with comprehensive legal powers under various Acts and
Ordinances;
With this role, BNM assists Islamic capital market to be known internationally
and locally by both investors and issuers.
In an effort to promote Islamic capital market, BNM works closely with the
SC on projects such as
In February 2001, the Capital Market Master Plan was launched, and it was
formulated by the Capital Market Strategic Committee comprising
representatives from the SC, BNM and foreign professionals.
SUPERVISORY ROLE
BNM plays important role on education and training in Islamic Finance with the
establishment of an academic and research institutions;
To increase the
number of experts
in the field of
Islamic Finance.
BNM also made available Shariah scholarship Award and Shariah Research
Grant- offered to Malaysian and non-Malaysian seeking to pursue studies and
research in Islamic Finance.
Some specific roles of BNM in the area of Islamic capital market include;
To introduce the principal dealer and auction systems to develop the secondary
market for bond
o To develop a market infrastructure for Private Debt Securities
o To perform activities like trading, registering, settlement and redemption of
government securities by using latest ICT like RENTAS, FAST and BIDS
o
laws,
regulation,
and
guidelines
are
The CMSA also recognizes the Islamic banks which carry out
the whole range of capita market activities for all Shariah
based products and services.
Prior to 1993, there were multiple agencies who were responsible for
the capital market in Malaysia.
With the coming into force of the CMSA, the SCA has
undergone consequential amendment, particularly in respect
of deletion of Division 2 part IV of the Act which deals with
fund raising activities.
S. 124 (3) and (4) of BAFIA further provide that any licensed
institutions carrying on Islamic banking business and Islamic financial
business may refer to BNMs Shariah Advisory Council (SAC) and shall
comply with directions on Islamic banking business and Islamic
financial business issued by BNM in consultation with its SAC.
However, it should be noted that under section 124 (5) of the BAFIA,
the licensed institutions under the Act are not Islamic banks,
but conventional banks offering Islamic banking and financial
services.
encompassing
Shariah
compliant
retail
banking,
Dealing in securities;
Investment advice;
Fund management
Under IBA and CMSA, the activities conducted must comply with
the principles of Shariah and approved by the SAC of BNM and/or
SAC of SC
NINTH SCHEDULE OF
THE FEDERAL CONSTITUTION
CASES - Adnan bin Omar, BIMB vs Tinta Press Sdn. Bhd. & Ors and
Dato Nik Mahmud vs BIMB
The Courts used the civil law and procedures in reaching its decisions
The courts did not consider whether the application of the existing
law and procedure have contradicted the Shariah or anyway affect
the validity of the contractual documents.
THE END