Legal News: SC To Adopt Revised Screening Method For Company Syariah Complaint Status

*The Shariah Advisory Council (SAC) is responsible for ascertaining and issuing rulings on the application of syariah principles on matters with regards to the Islamic Capital Market (ICM) and applicable to Shariah scholars, jurists and market practitioners.

KUALA LUMPUR: The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has announced the adoption of a revised screening methodology to determine the Shariah-compliant status of listed companies.

In view of the developments and growing sophistication of the Islamic finance industry since the introduction of the current screening methodology in 1995, the SAC has revised the methodology by adopting a two-tier quantitative approach which applies the business activity benchmarks and the newly-introduced financial ratio benchmarks.

The outcome of the revised methodology will be reflected in the list of Shariah-compliant Securities by the SC’s SAC effective from November 2013.

In addition to the above two-tier quantitative assessment, the existing qualitative assessment will continue to be applicable while the release of the list of Shariah-compliant securities will remain twice a year.

“The revision to the screening methodology will further facilitate the orderly development of the Islamic equity market and fund management industry at both domestic and international levels, in line with the growth strategies outlined under the Capital Market Masterplan 2,” said Zainal Izlan Zainal Abidin, who is executive director of Islamic Capital Market of the SC.

Source: The Star

Published: Monday, June 18, 2012

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