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Capital Market and
Services Act 2007

LAB4112
ZULKIFLI HASAN

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n  Capital Markets and Services Act 2007
n  Securities Industry (Central Depositories Act)

1991
n  Securities Commission Act 1993
n  Companies Act 1965
n  Offshore Companies Act 1990
n  Labuan Financial Services and Securities Act

2010

Governing Laws

+CMSA 2007
n  Prescription by Minister in respect of Islamic securities, etc.

n  316. (1) This Division applies to a person who proposes to make available, offer for subscription
or purchase, or issue an invitation to subscribe for or purchase, Islamic securities.

n  (2) Where the Minister has made a prescription under section 5 in respect of Islamic 242

n  securities, the Minister may make such modifications in the prescription on the usage of
expressions in the securities laws as may be necessary to give full effect to the principles of
Shariah in respect of such Islamic securities.

n  (3) The Commission may specify in guidelines made under section 377 on the following:

n  (a)  any model agreement or documentation relating to a transaction or arrangement in respect
of Islamic securities;

n  (b)  the duties and responsibilities of the different parties involved in a transaction or
arrangement in respect of Islamic securities; and

n  (c)  any other matter as may be deemed appropriate,

n  in giving full effect to the principles of Shariah in relation to a transaction in respect of Islamic
securities.

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CAPITAL MARKETS AND SERVICES
(AMENDMENT) ACT 2010

n  S2―Shariah Advisory Council‖ means Shariah Advisory
Council established under section 316A;

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Definition of ICM

n  (b)  by inserting after the definition of ―Islamic bank‖ the
following definition: ̳ ―Islamic capital market business or
transaction‖ means

n  (a) the business of carrying on any regulated activity;

n  (b)  any proposal that falls within subsection 212(2);

n  (c)  any transaction relating to a futures contract; or

n  (d)  the establishing, operating or maintaining of a stock
market or a futures market,

n  which does not involve any element that is inconsistent with
the principles of Shariah as may be determined by the
Shariah Advisory Council;‘.

+ Establishment of Shariah Advisory Council
for Islamic capital market

n  316A. (1) The Commission may establish a Shariah Advisory
Council for Islamic capital market which shall be the
authority for the ascertainment of the application of Shariah
principles for the purposes of Islamic capital market
business or transaction.

n  (2) The Shariah Advisory Council may determine its own
procedures.

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Functions of Shariah Advisory Council

n 316B. The SAC shall have the following functions:

n (a)  to ascertain the application of Shariah principles on
any matter pertaining to Islamic capital market business
or transaction and issue a ruling upon reference made to
it in accordance with this Division;

n (b)  to advise the Commission on any Shariah issue
relating to Islamic capital market business or transaction;

n (c)  to provide advice to any person on any Shariah issue
relating to Islamic capital market business or transaction;
and

n (d)  such other functions as may be prescribed by the
Minister.

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Appointment of members of Shariah
Advisory Council

n 316C. (1) The Yang di-Pertuan Agong may, on
the advice of the Minister after consultation
with the Commission, appoint persons as
members of the Shariah Advisory Council who
are qualified in—

n (a)  fiqh muamalah;

n (b)  Islamic jurisprudence;

n (c)  Islamic finance; or

n (d)  any other relevant discipline.

+Cont..
n (2) If a judge of the High Court, the Court of Appeal or the

Federal Court, or a judge of the Shariah Appeal Court of a
State or Federal Territory, is to be appointed under
subsection (1), such appointment shall not be made
except—

n (a)  in the case of a judge of the High Court, the Court of
Appeal or the Federal Court, after consultation by the
Commission with the Chief Justice of the Federal Court;
and

n (b)  in the case of a judge of the Shariah Appeal Court of a
State or Federal Territory, after consultation by the
Commission with the Chief Shariah Judge of that State or
Federal Territory, as the case may be.

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Cont..

n  (3) A member of the Shariah Advisory Council appointed
under subsection (1) shall hold office on such terms and
conditions as may be provided in their respective letters of
appointment, and shall be eligible for reappointment.

n  (4) The members of the Shariah Advisory Council shall be
paid such remuneration and allowances as may be
determined by the Commission.

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Secretariat to Shariah Advisory
Council

n  316D. The Commission may—

n  (a) establish a secretariat and such other committees as it
considers necessary to assist the Shariah Advisory Council in
carrying out of its functions under section 316B; and

n  (b) appoint an officer of the Commission or any other person
to be a member of the secretariat or any of such committees.

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Advice or ruling of Shariah
Advisory Council

n 316E. Any licensed person, stock exchange, futures
exchange, clearing

n house, central depository, listed corporation or any
other person may—

n  (a)  seek the advice; or

n  (b)  refer for a ruling,

n of the Shariah Advisory Council on any matter relating
to its Islamic capital market business or transaction to
ascertain whether such Islamic capital market business
or transaction involves any element which is
inconsistent with the Shariah.

+ Reference to Shariah Advisory Council for
ruling from court or arbitrator

n 316F. (1) Where in any proceedings before any
court or arbitrator concerning a Shariah matter in
relation to Islamic capital market business or
transaction, the court or the arbitrator, as the case
may be, shall—

n (a) take into consideration any ruling of the Shariah
Advisory Council; or

n (b) refer such matter to the Shariah Advisory
Council for its ruling.

n (2) Any request for advice or a ruling of the
Shariah Advisory Council under this Act or any
other law shall be submitted to the secretariat.

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Effect of Shariah ruling

n  316G. Any ruling made by the Shariah Advisory Council
under section

n  316E or 316F shall be binding on—

n  (a)  the licensed person, stock exchange, futures exchange,
clearing house, central depository, listed corporation or any
other person referred to in section 316E; and

n  (b)  the court or arbitrator referred to in section 316F.

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Shariah Advisory Council ruling
prevails

n  316H. (1) Where a ruling given by a registered Shariah
adviser to a person engaging in any Islamic capital market
business or transaction is different from the ruling given by
the Shariah Advisory Council, the ruling of the Shariah
Advisory Council shall prevail.

n  (2) For the purpose of this section, ―registered Shariah
adviser‖ means a person who is registered under any
guidelines issued by the Commission under section 377.‖.