Business

Tuesday November 10, 2009

SC, HK counterpart in Islamic finance tie-up


KUALA LUMPUR: Local Islamic finance players should take advantage of the mutual agreement signed by the Securities Commission (SC) with the Securities and Futures Commission of Hong Kong (SFC) to promote their business and products in Hong Kong, says SC chairman Tan Sri Zarinah Anwar.

“The mutual agreement that we signed today (yesterday) will facilitate the distribution of Islamic collective investment schemes (Islamic CIS) or Islamic unit trust funds in each jurisdiction.

“This agreement allows for the distribution of Islamic products without going through the normal process approval,” she said yesterday.

Zarinah said this after the signing of a mutual recognition arrangement on the development of Islamic capital market and Islamic CIS between SC and SFC.

Tan Sri Zarinah Anwar exchanging documents with Dr Eddy C. Fong after the signing ceremony. With them are Permanent Secretary for Financial Services and Treasury of Hong Kong SAR Au King Chi (second from left) and Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah.

She said Hong Kong offered a vast pool of fund managers with total fund of about US$750bil compared with Malaysia’s fund market size of about RM300bil.

As such, she said it was important for local Islamic finance players to expand to Hong Kong as the latter was still new to Islamic finance.

“We are laying the platform here for local Islamic finance players to expand their business internationally such as to Hong Kong.

“Regulators like us and SFC can only facilitate the issuers and investors but it’s up to the market practitioners to take this advantage to promote their products,” Zarinah said, adding that there was no Islamic products from Malaysia now in Hong Kong.

She also said SC was now in talks with other jurisdictions for similar types of agreement but declined to elaborate.

Meanwhile, SFC chairman Dr Eddy C. Fong said Hong Kong currently did not have a big Islamic finance market.

“We have the potential to be a prominent platform for Islamic finance based on some reasons such as having a deep pool of financial talents,” he said.

He added that Hong Kong was the gateway for overseas capital to invest in this region. Based on SFC’s survey, over 60% of the US$750bil funds under management in Hong Kong originated from non-Hong Kong investors.

“Apart from that, Hong Kong plays an important role in China’s development and has already captured a stream of liquidity from mainland China investors.

“We expect these inflows to show phenomenal growth in the coming years as investors seek diversification in their investments and use Hong Kong as the platform for such activities,” he said.

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