Sukuk At Retail Level

Retail investors can now invest in Malaysian government bonds and sukuk with the launch of the retail bonds and sukuk framework by the Securities Commission (SC) yesterday. By next year, this access will be expanded to include issuances by public-listed companies and banks.

Relevant guidelines and regulations are expected to be issued in January. The SC said the retail bonds and sukuk framework allows retail investors to invest directly in bonds and sukuk. The framework enables retail bonds and sukuk to be issued and traded either on the exchange (Bursa Malaysia) or over-the-counter (OTC) via appointed banks.

The SC has approved Bursa Malaysia's rules and listing requirements to facilitate the offering of retail bonds and sukuk. "The retail bonds and sukuk framework is intended to meet retail investors' demand for access to a wider range of investment products. Issuers will now also have access to a larger pool of investors," said SC chairman Datuk Ranjit Ajit Singh.

He said during the introductory phase, retail investors will be able to invest in bonds and sukuk issued or guaranteed by the Malaysian government. Such issuances will naturally be subject to their own funding needs and requirements.

This phased approach will provide retail investors time to familiarise themselves with investing and trading in bonds and sukuk, the SC said. It added that the SC, Bursa and market will work closely to enhance the level of awareness among investors in the bond and sukuk market.

Banking and financial institutions welcomed the framework, saying that it is a much-awaited move that will lead to the widening of the range of investible assets for retail investors.