Monday, November 16, 2009

Go East, local Islamic finance players urged

by Alfean Hardy
The Securities Commission (SC), which has inked an agreement with its Hong Kong counterpart to further develop the Islamic capital market and Islamic Collective Investment Schemes (CIS), is calling upon local players to take advantage of the new environment to tap into Hong Kong, China and global Islamic CIS opportunities, its chairman Tan Sri Zarinah Anwar said.
The mutual recognition agreement signed between the local regulator and the Securities and Futures Commission Hong Kong (HKSFC) allows for the fast-tracking approval for Malaysian based capital market intermediaries to offer their retail shariahcompliant funds in the East Asian financial hub and vice versa.
The deal will also see the two regulators working together to develop a common platform for cross-border offerings of Islamic CISs, collaborate in capacity building, and share information and experiences in the development and regulatory framework of Islamic CISs as well as the exchange of regulatory experience in relation to shariah principles.
In a welcoming address at the signing of the agreement in Kuala Lumpur yesterday, Zarinah said Hong Kong was one of Asia's most established international financial centres and could serve as a gateway for Islamic finance into China and other global financial centres.

"The agreement between (both parties) will allow local investment companies to be recognised by the HKSFC while Islamic funds from Malaysia will be deemed to have substantially complied with the Hong Kong code on unit trust (and) the same applies for Hong Kong investment management companies and Islamic funds to be offered in Malaysia.
"It's our hope that, with the signing of the agreement, both local and Hong Kongbased firms will quickly tap into the opportunities for cross-border distribution of Islamic funds," she added. Speaking to reporters later, Zarinah said the agreement would result in the diversification of Islamic finance products in both jurisdictions.
"Not only the products but the unit trust management companies will similarly (be) approved," she said.
"It's very important for our market players and intermediaries to take advantage of the regulatory bridges and alliances that have already been built between the SC and HKSFC. The regulators can only facilitate but the deal-making and issuance as well as distribution of products will have to be undertaken by our intermediaries and market players.

(This story appeared in The Malaysian Reserve on Nov 10, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)