SC issues shariah parameters on Islamic ETF

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The Securities Commission Malaysia (SC) issued shariah parameters on Islamic exchange-traded funds (i-ETFs) last month. These parameters use gold and silver as a reference from a shariah perspective to facilitate product development by industry participants.

The issuance of these parameters is an initiative to further develop the Islamic capital market in Malaysia. This is the first set of shariah parameters issued by the SC and is endorsed by its shariah advisory council. The parameters outline the shariah requirements on the trading of ribawi-based items, including the classification of ribawi items and requirements for the trading of ribawi items; the requirements for the establishment, structuring and trading of an Islamic ETF; and the role of shariah advisers in an Islamic ETF based on gold and silver as an underlying asset.