SC issues new guidelines for SRI funds

KUALA LUMPUR: The Securities Commission Malaysia (SC) has issued Guidelines on Sustainable and Responsible Investment (SRI) Funds to facilitate and encourage greater growth of the funds in Malaysia.

The new guidelines, which would enable funds to be designated as SRI, would widen the range of SRI products in the market and attract more investors in the SRI segment and applicable for both conventional and Shariah-compliant funds, it said in a statement yesterday.

SC Chairman, Tan Sri Ranjit Ajit Singh, said the capital markets played a critical role in facilitating fund raising and investments for sustainable initiatives.

“The introduction of the SRI Funds Guidelines is another significant step towards further development of the SRI ecosystem in the Malaysian capital market, reinforcing our positioning in the regional SRI segment and global leadership in Islamic finance,” he said.

Ranjit said developing the SRI was identified as a key area of growth for the Malaysian capital market under the Capital Market Masterplan.

The SC said the SRI Funds Guidelines would apply to fund products within its oversight, such as unit trust funds, real estate investment trust funds, exchange-traded funds and venture capital and private equity funds.

“The Guidelines will also introduce additional disclosure and reporting requirements that aim to encourage greater transparency in investment policies and strategies of SRI funds,” it said.

Fund managers that manage qualified SRI funds under these Guidelines will be eligible for tax incentives as announced in the recent 2018 Budget, it said.

In 2014, the SC introduced the SRI Sukuk framework, now widely acknowledged as a pioneering regulatory development that integrates the principles of Shariah with those of SRI and in July 2017, the world’s first green sukuk was issued in Malaysia under the SRI Sukuk framework. — Bernama