SC Unveils Principles-based Maqasid Al-Shariah Guidance for Islamic Capital Market

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Kuala Lumpur, 30 October 2023

The Securities Commission Malaysia (SC) today introduced the principles-based Maqasid Al-Shariah Guidance Islamic Capital Market Malaysia, a fundamental developmental effort to further promote a strong and resilient industry.

The Guidance provides universal guiding principles to enhance Islamic capital market’s (ICM) competitive advantage and fortify ICM’s impact and contribution to society and the real economy.

By adhering to the highest ethical standards based on core Shariah principles, the initiative is expected to sustain the trust and confidence of its stakeholders.

This is also in line with the SC’s Capital Market Masterplan 3 (CMP3), which seeks to recognise Malaysia as a global leader in ICM and enhance Malaysia’s position as a regional centre for Shariah-compliant Sustainable and Responsible Investment (SRI).

The Guidance was launched by Deputy Minister of Finance I, Datuk Seri Ahmad Maslan at the SC-World Bank Conference today.

The one-day Conference was attended by over 150 industry players including, capital market practitioners, Islamic financial institutions, Shariah advisers, international participants and government agencies.

As of August 2023, the Islamic capital market accounts for 64% or RM2.4 trillion of the Malaysian capital market.

In his speech at the launch, the SC Chairman, Dato’ Seri Dr. Awang Adek Hussin said, “The principles-based document is not meant to replace the existing Shariah requirements. Rather, it is to complement the SC’s existing rules and regulations.”

“This is similar to the concepts of "halal" and "tayyib" where products should not only be permissible but also beneficial, sustainable, and good for society,” he added.

The Guidance is designed in accordance with six overarching aspirations that fit within the context of the ICM. They are:
  1. Aspiration 1: Humanity
  2. Aspiration 2: Justice and Benevolence
  3. Aspiration 3: Clarity and Transparency
  4. Aspiration 4: Flexibility and Innovation
  5. Aspiration 5: Fiduciary and Accountability
  6. Aspiration 6: Accessibility and Inclusivity

Each aspiration underlines its own principles, with a total of 15 principles serving as a reference for the capital market.

Speakers at the Conference today also discussed Malaysia’s social impact ecosystem and the need for greater participation of the private sector in the social and impact space.

Additionally, they also discussed on ways to explore charitable and endowment funds to support social projects that would contribute to the betterment of the society.

More information on the Guidance can be found here.

Source: Securities Commission Malaysia

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