The Securities Commission of Malaysia (SC) established the Framework for Sustainable and Responsible Investment-Linked Sukuk (the Framework) on June 30, 2022.
The Sustainable and Responsible Investment Sukuk framework was first introduced by the Securities Commission Malaysia (SC) in 2014. This was done to facilitate the creation of an ecosystem that promotes sustainable and responsible investing for SRI investors and issuers. The Framework was introduced in 2014.
The Disclosure Framework has been designed under international standards and best practices, both of which emphasise the significance of transparency concerning disclosure requirements.
This document is intended to serve as a reference for the relevant stakeholders. It should be read in conjunction with the other requirements outlined in the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework and the Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors, whichever of those two sets of guidelines is applicable.
What is SRI Sukuk?
SRI Sukuk is where the Sukuk proceeds will be applied exclusively for funding any activities or transactions relating to the eligible SRI projects.
Incentives and Grant Scheme
Tax Deduction on SRI Sukuk Issuances
Tax deduction for the expenditure incurred on the issuance of Sukuk approved or authorised by or lodged with the SC until the year of assessment 2023.
90% of the proceeds raised are solely used to fund SRI projects as specified in the Guidelines by the SC.
Green SRI Sukuk Grant Scheme (the Grant)
From January 2018 until fully utilised:
The Issuer can claim for the Grant based on an issue or programme.
Should there be more than one issuance requiring a separate external review, the issuer can claim on that review cost incurred.
The application form is available at the Capital Markets Malaysia website – www.capitalmarketsmalaysia.com
The Grant will be paid on a reimbursement basis within 60 days upon complete submission.
Sustainable and Responsible Investment-Linked (SRI-linked) Sukuk Framework
The following guidelines have been updated, including the introduction of a new chapter on the framework as well as the setting out of the additional requirements concerning the issue of SRI-linked Sukuk:
Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework.
Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors.
The framework is an extension of the efforts that were announced in 2019 as part of the SRI roadmap to increase the range of SRI products that are available.
More importantly, this effort represents the SC's determination to broaden the scope of the Islamic Capital Market (ICM) to include a broader range of economic stakeholders and to construct an ICM ecosystem conducive to advancing the sustainability agenda.
You can access a list of frequently asked questions that the SC has released about the SRI-linked Framework here.
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