“We are set to launch the SRI framework for investment funds by the end of the year.”
ZAINAL IZLAN ZAINAL ABIDIN, Securities Commission development and Islamic markets managing director
KUALA LUMPUR: The Securities Commission (SC) is set to launch the sustainable and responsible investment (SRI) framework for investment funds by year-end in a bid to strengthen Malaysia’s position as the world’s Islamic banking hub.
SC development and Islamic markets managing director Zainal Izlan Zainal Abidin said the framework would be based on Islamic values as both SRI and Islamic finance had similar principles.
“It complements the SRI sukuk framework introduced back in 2014. It’s a new growth driver for the Islamic capital market.”
He was speaking on the sidelines of the “Responsible Investment Forum”, jointly organised by the SC and Bursa Malaysia, here, yesterday.
Zainal said the initiative would enable fund managers to offer products that combined SRI elements and were syariah-compliant.
When Bursa Malaysia introduced the FTSE4Good index in 2014, there were 24 companies incorporating environmental, social and governance principles in their daily businesses. Today, it has almost doubled to 43.
The FTSE4Good index measures the performance of publiclisted companies demonstrating strong environmental, social and governance practices in their daily operations.
Globally, SRI assets grew 25 per cent between 2014 and last year to US$22.9 trillion (RM98.47 trillion).
Although the initiative was relatively new in Malaysia, Zainal said Malaysia was the largest SRI market in the region.
“In Malaysia, syariah-compli- ant assets under management account for 30 per cent of the Asian SRI market,” he said.
Earlier this year, Zainal said the SC had launched the Islamic fund and wealth blueprint, which outlined strategies to create more products and services that met both SRI and Islamic finance requirements.