Page 89 - KLIFF2022eBook

KLIFF 2022 PROGRAMME BOOK

ISLAMIC CAPITAL MARKET – RECENT

GUIDELINES FOR SHARIAH ADVISERS ISSUED

BY SECURITIES COMMISSION MALAYSIA

Megat Hizaini Hassan Saiful Akmal Suhaimi
Partner and Head, Islamic Finance Practice, Associate, Islamic Finance Practice,
Lee Hishammuddin Allen & Gledhill Lee Hishammuddin Allen & Gledhill

Shariah advisers play an important role in the Islamic capital market, and their functions are regulated by the Securities
Commission Malaysia (“SC”), being the regulator for the Islamic capital market in Malaysia. Shariah advisers provide advisory
services relating to compliance with Shariah in respect of an Islamic capital market product or an Islamic capital market activity
that is regulated by the SC. Such services provided by Shariah advisers are specified to be capital market services for the
purpose of Section 76A of the Capital Markets and Services Act 2007 (“CMSA”). On 20th December 2021, the SC has issued
1
the Guidelines for Shariah Advisers, which came into effect on 1st January 2022 (“2022 Guidelines”). The 2022 Guidelines
supersedes and replaces the Registration of Shariah Advisers Guidelines which was issued and came into effect on 10th
August 2009 (“2009 Guidelines”). In this article, both 2009 Guidelines and 2022 Guidelines, are compared with the aim of
highlighting key similarities and differences between the latest and previous guidelines.

Requirements for Registration
Shariah advisers can be Malaysian and foreign individuals, or corporations who have made an application to register as Shariah
advisers, subject to them meeting the requirements as set out in the 2022 Guidelines. This is in line with Section 76A(2) of
the CMSA, which requires that a person providing any capital market services must be registered. As at February 2022, there
are sixty-one (61) individuals and eighteen (18) corporations registered as Shariah advisers. In addition, in both the 2009
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Guidelines and the 2020 Guidelines, Islamic financial institutions (in particular, (a) licensed Islamic banks as defined in the Islamic
Financial Services Act 2013, and (b) licensed banks and licensed investment banks as defined in the Financial Services Act
2013, approved by Bank Negara Malaysia to carry on Islamic banking business) are deemed to be registered with the SC as
Shariah advisers under these two guidelines and as such are not required to apply for registration. Nevertheless, such financial
institutions are still subject to the compliance of the conduct requirements and continuous obligations as set out in the 2022
Guidelines.

Registration Requirements – Comparison between the 2009 and 2022 Guidelines

To become a Shariah adviser, one must fulfil the criteria for registration relating to background, qualification and experience. The
key differences between the two guidelines are stated as follows:-

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1 Act 671.
2 Retrieved from https://www.sc.com.my/development/icm/shariah/registered-shariah-advisers/list-of-registered-shariah-advisers.

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