SC Reviewing Regulated Short-Selling & Securities-Borrowing And Lending Framework

Written by Writer on Thursday, November 13th, 2008

SC Reviewing Regulated Short-Selling & Securities-Borrowing And Lending Framework

KUALA LUMPUR, Nov 13 (Bernama) — The Securities Commission is reviewing its regulated short-selling and securities borrowing and lending (SBL) framework, chairman Datuk Seri Zarinah Anwar said Thursday.

According to her, the aim is to introduce appropriate flexibilities within the Syariah context to enable the establishment of alternative strategy funds which are highly dependent on their ability to undertake hedging strategies.

Zarinah said the Syariah Advisory Council had already approved regulated short selling via a Syariah-compliant replicated SBL framework and would continue to assess other issues, including leveraging and other hedge strategies.

“These regulatory developments will provide a sound basis for alternative strategy funds to be used as a launchpad for an Islamic fund employing absolute return strategies,” she said at the Second International Islamic Capital Market Forum here.

Zarinah said the current challenges posed by an unstable global financial system provided an opportunity for Islamic finance experts to consider the opportunities to promote the virtues of a Syariah-compliant financial system.

This, she said, must go hand-in-hand with continued advancement in knowledge and innovation.

Islamic investors also needed to consider diversification strategies and to reduce their reliance on their traditional investments in commodity mudharabah, mutual funds, and direct equity and bond investments, she added.

– BERNAMA