Islamic Unit Trust
The 2nd International Islamic Financial Markets Conference, Bahrain
ISLAMIC UNIT TRUSTS
Shahrin Shaikh Mohd Securities Commission, Malaysia 19 June 2007
Malaysian Unit Trusts Industry - Where we are @ 31 March 2007
Total Number of Operators Total Number of Unit Trusts Total Net Asset Value Bursa Malaysia Market Capitalisation % of NAV to Bursa Malaysia Market Capitalisation No. of Unitholder Accounts
36 414 USD38.34 bn USD281.46 billion 13.62% 11.3 million
Total Number of Islamic Unit Trusts Total Net Asset Value of Islamic Unit Trusts % of NAV to Bursa Malaysia Market Capitalisation
98 USD2.80 bn 0.99%
2
Growth of Malaysian Islamic Unit Trusts
414
450 400 350
No of Funds 324
393
Industr y Total
300 250 200 150 100 50 0
273
95 65 79
98 Isl ami c Uni t Tr usts
Dec-04
Dec-05
Dec-06
Mar-07
3
Key Growth Factors
Tools & Products Availability of Shariah-compliant stocks, investments and indices Intermediaries Availability of Islamic Brokers and Wide Distribution Channels Expertise Investment management Tax Incentives Govt tax incentives to promote growth of unit trusts Regulatory Framework Clear guidelines and policies with respect to Islamic unit trusts Education Promote understanding and general awareness of unit trusts
4
Regulatory Approach
Securities Commission adopts 2 tier regulation for Islamic unit trusts 1st tier – regulation that applies to all unit trusts 2nd i. ii. iii. tier – additional regulation required for Islamic unit trusts Appointment of Shariah Committee / Advisory Board / Adviser Appointment of 2 Muslim Investment Committee Member Appointment of a designated compliance officer for Islamic unit trusts iv. Enhanced disclosures in offering documents v. Reports by Shariah Committee / Advisory Board / Adviser in annual and interim reports to unitholders.
5
Recent Trends
•
Investors of conventional unit trusts shifting their investments into Islamic unit trusts
ISLAMIC UNIT TRUSTS
Shahrin Shaikh Mohd Securities Commission, Malaysia 19 June 2007
Malaysian Unit Trusts Industry - Where we are @ 31 March 2007
Total Number of Operators Total Number of Unit Trusts Total Net Asset Value Bursa Malaysia Market Capitalisation % of NAV to Bursa Malaysia Market Capitalisation No. of Unitholder Accounts
36 414 USD38.34 bn USD281.46 billion 13.62% 11.3 million
Total Number of Islamic Unit Trusts Total Net Asset Value of Islamic Unit Trusts % of NAV to Bursa Malaysia Market Capitalisation
98 USD2.80 bn 0.99%
2
Growth of Malaysian Islamic Unit Trusts
414
450 400 350
No of Funds 324
393
Industr y Total
300 250 200 150 100 50 0
273
95 65 79
98 Isl ami c Uni t Tr usts
Dec-04
Dec-05
Dec-06
Mar-07
3
Key Growth Factors
Tools & Products Availability of Shariah-compliant stocks, investments and indices Intermediaries Availability of Islamic Brokers and Wide Distribution Channels Expertise Investment management Tax Incentives Govt tax incentives to promote growth of unit trusts Regulatory Framework Clear guidelines and policies with respect to Islamic unit trusts Education Promote understanding and general awareness of unit trusts
4
Regulatory Approach
Securities Commission adopts 2 tier regulation for Islamic unit trusts 1st tier – regulation that applies to all unit trusts 2nd i. ii. iii. tier – additional regulation required for Islamic unit trusts Appointment of Shariah Committee / Advisory Board / Adviser Appointment of 2 Muslim Investment Committee Member Appointment of a designated compliance officer for Islamic unit trusts iv. Enhanced disclosures in offering documents v. Reports by Shariah Committee / Advisory Board / Adviser in annual and interim reports to unitholders.
5
Recent Trends
•
Investors of conventional unit trusts shifting their investments into Islamic unit trusts