SC eases retail investors' access to sukuk, bond market

PETALING JAYA: The Securities Commission Malaysia (SC) has liberalised its regulatory framework to facilitate greater retail access to the RM1.3 trillion bond and sukuk market, which is currently the third largest in Asia and the world's largest sukuk market.
The liberalised framework consists of the new Guidelines on Seasoned Corporate Bonds and Sukuk and amendments to Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors, the Guidelines on Sales Practices of Unlisted Capital Market Products, as well as Division 2 of the Prospectus Guidelines, which will come into effect on Oct 11, 2018.
The SC said in a statement today that the liberalised framework will allow a more efficient issuance process for corporate bonds and sukuk to be offered to retail investors.
"Qualified issuers no longer need to make disclosures through a prospectus, and are only required to issue a product highlight sheet. The range of corporate bonds and sukuk that can be offered to retail investors has also been expanded beyond plain vanilla bonds," it said.
The SC is also introducing a new seasoning framework to enable retail investors to access existing corporate bonds and sukuk that are traded by sophisticated investors in the over-the-counter (OTC) market.
Under this framework, corporate bonds and sukuk that are eligible for retail investment must have been in the market for at least 12 months and have a minimum credit rating of 'A', among other requirements.
In tandem with these measures, distributors of corporate bonds and sukuk in the OTC market are required to observe the sales practices prescribed by the SC.
The regulator noted that the liberalised framework for retail investors is complemented by the centralised online information platform, Bond+Sukuk Information Exchange Malaysia (BIX Malaysia), established by the SC in November 2017.
BIX Malaysia enables investors to obtain information on ringgit bonds and sukuk to assist them in making investment decisions.