Malaysia has developed deep experience in structuring and raising funds through both conventional as well as Islamic fixed income instruments, and is widely recognised as an international leader for Sukuk issuances. The Malaysian fixed income market remains vibrant, supported by strong demand from global investors. According to the SC, the overall fixed income market as of December 2019 stands at RM1490.28 Billion, while the Shariah fixed income saw a steady growth reaching RM555.50 billion in terms of corporate Sukuk.
The Securities Commission Malaysia (SC) regulates the bond and Sukuk market in Malaysia and all issuances need approval from the SC. In 2015 SC introduced the Lodge and Launch Framework (LOLA) The introduction of the LOLA framework helped to shorten the time-to-market by enabling structured products, bonds, Sukuk and asset-backed securities to be launched once the required information is lodged with the SC via its online submission system, as compared to the previous 14-21 days approval time frame. In 2017, SC also launched The Bond and Sukuk Information Exchange (BIX), a non-profit information platform established to provide free public access to information on bonds and Sukuk issued in Malaysia – in both the primary and secondary markets.
Currently, there are several tax incentives in place to support the development of the bond and Sukuk market; amongst the incentives are stamp duty and real property gains tax exemptions (for Sukuk structures). For more up-to-date information on tax exemptions, please refer to Securities Commission Malaysia’s website.
Nearly all Asian countries have at least one rating agency; there are currently two rating agencies in Malaysia that are approved by Securities Commission Malaysia – RAM Rating Services Berhad (RAM Ratings) and Malaysian Rating Corporation Berhad (MARC). In January 2017, the Securities Commission removed the mandatory bond rating as part of measures to liberalize the financial sector and broaden the corporate bond market.