The Malaysian Experience In Sukuk Issuance

Abstract

According to the International Islamic Financial Market Sukuk Report (IIFM, 2018), the global sukuk issuance has grown exponentially over the last three decades, recording a total issuance of US$ 97.9 billion in 2018 with Malaysia topped the list with US$ 32.8 billion representing 33.5 % of the world’s total. In the light of Malaysia’s experience as a foremost sukuk issuer, this paper examines the underlying concept and nature of the sukuk, the operational and structures involved in sukuk, and the legal and regulatory frameworks for sukuk issuance in Malaysia. In terms of methodology, the research adopts a qualitive approach employing the inductive method to trace primary and secondary data on the topic and the descriptive method to describe the Malaysian experience in sukuk issuance. The research also adopts the analytical method to evaluate the viability of sukuk issuance in the Malaysian context. The study found that the developments of sukuk in Malaysia is very promising due to the abundant encouragement provided by the regulators. The research has also concluded that the success of the Malaysian experience is due to the legal and regulatory frameworks and the infrastructure support system that facilitate and govern the sukuk issuance. It is also attributable to the Shariah framework that is uniquely co-exists with the existing legal framework to regulate sukuk issuances. These contribute to adherence of Shariah provisions and facilitate the growth of the industry thereby making Malaysia a leading model in sukuk issuance.