The collaboration between the Securities Commission Malaysia (SC) and the Islamic Development Bank (IsDB) Group aims to enhance the Islamic capital market (ICM) and expand the scope of Islamic fintech and social finance, specifically waqf.
The signing of the Memorandum of Understanding (MOU) took place in the esteemed presence of the Honorable Prime Minister of Malaysia, Dato’ Seri Anwar Ibrahim, and IsDB President and Chairman, His Excellency Dr. Muhammad Al Jasser. This MOU marks the first of its kind between the Malaysian capital market regulator and the premier multilateral development bank of the Global South.
Dato’ Seri Dr. Awang Adek Hussin, Chairman of the SC, and Dr. Zamir Iqbal, IsDB Vice President, Finance and Chief Financial Officer, formally signed the MOU on the sidelines of the IsDB Annual General Meeting 2024 in Riyadh.
This historic collaboration stems from the agreement reached between Dato’ Seri Anwar and H.E. Dr. Muhammad Al Jasser in March 2023, to foster close cooperation between regulators, authorities, and businesses in Malaysia and IsDB. These areas of collaboration include the development and implementation of innovative Islamic finance products, promotion of the halal industry, and support for micro, small, and medium enterprises (MSMEs).
The MOU outlines the key areas in which the SC and IsDB will cooperate, including promoting innovation in Islamic fintech, catalyzing the development of Islamic social finance, and facilitating investments. It also seeks to enhance capacity building, knowledge sharing, and joint technical projects related to ICM, for the benefit of other IsDB member countries.
Dato’ Seri Dr. Awang Adek emphasized the significance of this synergistic collaboration and the intention to amplify Islamic fintech through scalability and expansion into new markets. He also highlighted the potential of social finance, particularly in the development of waqf assets, as a means to support micro, small, and medium enterprises.
Dr. Muhammad Al Jasser expressed his optimism about the collaboration, stressing the focus on enhancing Islamic fintech, social finance, and attracting foreign investment in private markets. This partnership is poised to strengthen Islamic capital markets not only in Malaysia but also across IsDB Member Countries, prioritizing support for MSMEs and private markets.
Aligning with the Capital Market Master Plan 3 (2021 – 2025), the MOU reflects the strategic initiatives for the Malaysian ICM, which includes expanding the reach of ICM to a broader range of stakeholders and embracing collaboration and innovation for growth.
In line with these initiatives, the SC, together with its affiliate, Capital Markets Malaysia, has been actively engaging with various stakeholders in Abu Dhabi, Dubai, and Riyadh to reinforce the impact of ICM and enhance Malaysia’s global thought leadership.
During panel sessions in the region, Sharifatul Hanizah Said Ali, the SC’s Executive Director of Islamic Capital Market, highlighted the potential of ICM to structure innovative financing instruments for advancing social impact investing, sukuk issuances, and Islamic asset management.
In 2023, the Malaysian ICM saw a growth of 4.5% to RM2.4 trillion, with a 7.4% rise in sukuk outstanding and a 1.5% increase in Shariah-compliant equities. Malaysia continues to lead in ICM globally, particularly in sukuk outstanding and Islamic fund management, securing top rankings in global indices for the 10th consecutive year.
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About the Securities Commission Malaysia:
The Securities Commission Malaysia (SC) is a statutory body established under the Securities Commission Act 1993, with direct responsibility for the regulation and development of capital markets. The SC supervises and monitors the activities of market institutions, including exchanges and clearing houses, and regulates all persons licensed under the Capital Markets and Services Act 2007. More information about the SC is available on its website at www.sc.com.my. Follow the SC on our social media channels @SecComMalaysia for more updates.