Approval of Bursa Suq Al-Sila’

Shariah Compliance Endorsement on BSAS

Approval of Trading Approach for Timber in Bursa Suq Al-Sila’

The Shariah Committee endorsed the structure and mechanism prepared and submitted by Bursa Malaysia Islamic Services Sdn. Bhd. (BMIS) concerning the application of debt settlement through agents using the setting-off concept, as one of the settlement mechanisms for transactions conducted via Bursa Suq Al-Sila’ (BSAS).

Application of Debt Settlement Through Agents in BSAS

BSAS - Trading Break During Jumaat Prayer

The Shariah Committee endorsed the structure of ISSB as a Shariah-compliant alternative to Securities Borrowing and Lending (SBL).

Islamic Securities Selling and Buying (ISSB)

The Shariah Committee endorsed the revised Islamic Securities Selling and Buying Negotiated Transaction (ISSB-NT) structure, which is based on the Securities Borrowing and Lending-Negotiated Transaction (SBL-NT) model.

• Contract of Sale (Bay’)
• Two unilateral promises/undertakings  (Wa’dan)
  
• Conditional option (Khiyar al-Shart)

Islamic Securities Selling and Buying Negotiated Transaction Model (ISSB-NT) 

The Shariah Committee resolved that the individual Central Depository System (CDS) account that holds in the custody Shariah-compliant and Shariah non-compliant securities raises no issue from Shariah perspective.

Placement of Securities in Individual CDS Account

The Shariah Committee reviewed and endorsed the structure, mechanism and documentation prepared and submitted by Bursa Malaysia Islamic Services Sdn Bhd (BMIS) concerning the standard flows of commodity and two common transactions on Bursa Suq Al-Sila’ (BSAS), namely, the Financing Structure and Deposit Structure.

The former structure is implemented whereby the Commodity Trading Participant (CTP) provides financing to their client, while the latter is when the CTP receives financing from their client.

Shariah Committee Pronouncement on BSAS Process

Based on the feedbacks and recommendation from the industry and some Shariah scholars, Bursa Malaysia Islamic Services Sdn. Bhd. (BMIS) has undertaken a system enhancement to further improve the randomisation process in Bursa Suq Al-Sila’ (BSAS) trading platform.

• Before enhancement: To complete the transaction, BMIS will sell at random in the commodity market. However, the possibility of the same commodity sold fully or partially to the same party or original supplier may exist.
• After enhancement: The system has been improved with the exclusion of the original supplier when BMIS sells it in the commodity market. The staging inventory is embodied in the system to hold the commodity from being sold to the original supplier until there is eligible CSP to buy the said commodity. The movement is captured by and recorded in the BSAS system.

The Shariah Committee reviewed and endorsed the improvement of randomisation process.

BSAS - Improvement of Randomisation Process

Bursa Malaysia-i is a platform that offers a comprehensive range of exchange-related facilities including listing, trading, clearing, settlement and depository services, leveraging on existing infrastructure with enhancements to incorporate a complete end-to-end Shariah compliant investment features.

The Shariah Committee confirmed that all the operations and services of Bursa Malaysia-i for the period from 5 September 2016 until 19 March 2018 have been conducted in conformity with the Shariah principles.

Annual Shariah Confirmation on Bursa Malaysia-i

General Shariah Principles on Listing of Waqf Securities

ii.   can be subjected to a temporary subscription     based on the concept of temporary Waqf         (Waqf Mu’aqqat)

General Shariah Principles of Listing of Waqf Securities

Bursa Suq Al-Sila’ (BSAS): Salam Deposit

The Shariah Committee has reviewed the structure and mechanism prepared by Bursa Malaysia Islamic Services Sdn Bhd (BMIS) regarding deposit taking activities via a forward sale (Salam) contract and agreed to endorse it as Shariah-compliant.

Bursa Suq Al-Sila' Salam Deposit

In enhancing the efficiency of the Bursa Suq Al-Sila’ (BSAS) system, Straight Through Processing (STP) is introduced to allow the Commodity Trading Participant (CTP) to automate Commodity Murabahah transactions in the system by way of submitting a set of transaction data which consists of all purchasing information required to BSAS’s server instead of purchasing manually through the normal channel.

The Shariah Committee has subsequently approved of said process, while expressing relevant solutions in events of disputes regarding the ownership status of the commodity arising from calamitous events.

Straight Through Processing (STP) in BSAS System

End-of-Day (EOD) Bay’ amongst the Commodity Supplying Participants (CSPs) would entail their freedom to enter a transaction, based on the Current and Original CSP’s equal rights, ability and option to:

1. Current CSP will have the options to offer or not to offer for the sale of the commodities to the Original CSP; and
2. Original CSP will have the options to accept or not to accept for the sale of the commodities made by the Current CSP.

The Shariah Committee has reviewed the structure, mechanism and documentation prepared by Bursa Malaysia Islamic Services Sdn Bhd (BMIS) and subsequently endorsed EOD Bay’ amongst CSP.

Bursa Suq Al-Sila' (BSAS) End-of-Day (EOD) Bay' amongst CSP