GUIDELINES ON
ISSUANCE OF
CORPORATE BONDS
AND SUKUK TO
RETAIL INVESTORS
SC-GL/5-2015 (R2-2018) st Issued : 15 June 2015 Revised : 19 September 2018

GUIDELINES ON ISSUANCE OF CORPORATE BONDS AND SUKUK TO RETAIL INVESTORS Effective Date Upon 1st Issuance:
15 June 2015
List of Revisions
Revision
Series
Revision
Date
Effective
Date of Revision
Series Number st Revision 8.11.2017 8.11.2017 SC-GL/5- 2015 (R1-2017) nd Revision 19.09.2018 11.10.2018 SC-GL/5- 2015 (R2-2018)

CONTENTS
PAGE
PART A GENERAL
Chapter 1 Introduction 1
Chapter 2 Definitions 4
Chapter 3 Responsible Party 9
PART B REQUIREMENTS FOR ISSUANCE OF CORPORATE BONDS AND
SUKUK
Chapter 4 Eligibility 11
Chapter 5 Rating Requirements 14
Chapter 6 Trustee and Trust Deed Requirements 17
Chapter 7 Implementation Time Frame 18
Chapter 8 Utilisation of Proceeds 19
Chapter 9 Mode of Issuance 20
Chapter 10 Other Regulatory Approvals and Compliance with
Relevant Laws and Guidelines
PART C APPROVAL FOR ISSUANCE OF CORPORATE BONDS AND
SUKUK
Chapter 11 Approval 22
Chapter 12 Continuous Disclosure Obligations 24
Chapter 13 Revision to Principal Terms and Conditions 27
Chapter 14 Submission to the SC 31

PART D ADDITIONAL SHARIAH REQUIREMENTS FOR SUKUK
Chapter 15 Roles and Responsibilities of Shariah Adviser 32
Chapter 16 Compliance with Shariah Rulings, Principles and
Concepts
Chapter 17 General Shariah Rulings Applicable to Sukuk 35
Chapter 18 Shariah Rulings Applicable to Specific Types of Sukuk 41
Chapter 19 Revision to Terms and Conditions of Sukuk 46
PART E REQUIREMENTS FOR ISSUANCE OF SUSTAINABLE AND
RESPONSIBLE INVESTMENT SUKUK
Chapter 20 Sustainable and Responsible Investment Sukuk 48
PART F REQUIREMENTS FOR ISSUANCE OF ASEAN GREEN BONDS
AND SUKUK
Chapter 21 ASEAN Green Bonds and Sukuk 51
PART G REQUIREMENTS FOR ISSUANCE OF CORPORATE BONDS AND
SUKUK UNDER THE QUALIFIED ISSUER FRAMEWORK
Chapter 22 Qualified Issuer Framework 52
APPENDICES
Appendix 1 Information and Documents to be Submitted to the SC for
Approval
Appendix 2 Post-Issuance Notice for Corporate Bonds or Sukuk 64
Appendix 3 Information and Documents to be Submitted to the SC for PostIssuance Revision
Appendix 4 Documents and Information to be Submitted to the SC for
Approval to Upsize a Debt or Sukuk Programme
Appendix 5 Electronic Submission 71
Appendix 6 Information and Documents to be Submitted to the SC for
Revision to Terms and Conditions of Sukuk
Appendix 7 Approved Shariah Principles and Concepts for Sukuk 73

PART A: GENERAL
Chapter 1
INTRODUCTION
1.01 The Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors are
issued by the Securities Commission Malaysia (SC) under section 377 of the Capital Markets and Services Act 2007 (CMSA).
1.02 These Guidelines set out the requirements for an issue of, offer for subscription
or purchase of, or invitation to subscribe for or purchase corporate bonds or sukuk to retail investors.
1.03 These Guidelines shall supersede the Guidelines on Private Debt Securities and
Guidelines on Sukuk.
1.04 These Guidelines are in addition to and not in derogation of any other guidelines
issued by the SC or any requirements provided under the securities laws.
1.05 Any issue of corporate bonds or sukuk by a public company that is–
(a) capable of being converted or exchanged into new equity of a public listed company (e.g. convertible loan stock or convertible Islamic loan stock1 , convertible bonds or convertible sukuk and irredeemable convertible loan stock or irredeemable convertible Islamic loan stock); or (b) issued together with warrants, will also be subjected to the additional requirements stipulated in the Listing Requirements of Bursa Securities.

1 These are loan stocks structured in a Shariah-compliant manner based on approved Shariah principles and concepts and have been named appropriately.

1.06 For the purpose of these Guidelines, sukuk shall not include any agreement for a
financing or investment where–
(a) the financier/investor and customer/investee are signatories to the agreement; and (b) the provision of financing/investment is in the ordinary course of business of financier/investor, including any promissory note issued pursuant to the terms in sub-paragraphs 1.06(a) and (b) above.
1.07 All issuances of sukuk must comply with the requirements set out in Part D of
these Guidelines. In addition to the requirements in Part D, issuances of Sustainable and Responsible Investment (SRI) sukuk must also comply with the requirements under Part E of these Guidelines.
1.08 The SC may, on its own initiative or upon application, grant an exemption from
or a variation to the requirements of these Guidelines if the SC is satisfied that– (a) such variation is not contrary to the intended purpose of the relevant requirement in these Guidelines; or (b) there are mitigating factors that justify the said exemption or variation. NON-APPLICATION
1.09 These Guidelines do not apply to the following:
(a) Seasoned corporate bonds or sukuk as defined under the Guidelines on Seasoned Corporate Bonds and Sukuk; (b) Asset-backed securities (ABS) as defined under the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework; or (c) Corporate bonds or sukuk that are structured like an ABS, which have the following features, but do not fall under the purview of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework:

(i) where the corporate bonds or sukuk are without recourse to an originator or obligor; or (ii) where the ability to meet obligations under the senior tranche is enhanced by the less senior tranche(s).

Chapter 2
DEFINITIONS
2.01 Unless otherwise defined, all words used in these Guidelines shall have the
meaning as defined in the CMSA. In these Guidelines, unless the context otherwise requires– approval means an approval, authorisation or recognition granted under Part VI of the CMSA as the case may be; ASEAN Green Bonds or Sukuk means corporate bonds or sukuk which comply with the requirements under Chapter 21 of these Guidelines; ASEAN Green Bond Standards means the ASEAN Green Bond Standards as issued by the ASEAN Capital Markets Forum; Bursa Securities means Bursa Malaysia Securities Bhd; business day means a day on which commercial banks settle payments in Kuala Lumpur; corporate bonds means debentures as defined in the CMSA but do not include– (a) structured products; and (b) debentures issued by– (i) the Federal Government; (ii) any State Government; or (iii) Bank Negara; debt programme means a facility which allows multiple issues, offers or invitations to subscribe or purchase MTNs within an availability period which is disclosed to the SC and bondholders;

Exempt Regime has the meaning assigned to it under the Bursa Malaysia Main Market Listing Requirements; interested person has the meaning assigned to it under the Trust Deeds Guidelines; issuance refers to– (a) making available; (b) offering for subscription or purchase of; or (c) issuing of an invitation to subscribe for or purchase, a corporate bond or sukuk; issuer means any person who makes available, offer for subscription or purchase, or issue an invitation to subscribe for or purchase a corporate bond or sukuk; licensed bank has the meaning assigned to it in the Financial Services Act 2013; licensed investment bank has the meaning assigned to it in the Financial Services Act 2013; licensed Islamic bank has the meaning assigned to it in the Islamic Financial Services Act 2013; medium-term note or MTN has the meaning assigned to it under the Participation and Operation Rules for Payments and Securities Services issued by PayNet, on behalf of Bank Negara; obligor means an entity that is contractually obliged to honour the financial obligations of an issuer; originator means any entity that is seeking to transfer or dispose of its assets to a special purpose vehicle (SPV) in a securitisation transaction;

PayNet Payments Network Malaysia Sdn Bhd (formerly known as Malaysian Electronic Clearing Corporation Sdn Bhd) platform means a platform as may be specified by the SC; principal adviser means a person licensed to carry out the regulated activity of advising on corporate finance and eligible to act as principal adviser pursuant to the Principal Adviser Guidelines; Qualified Issuer means an eligible issuer that meets the requirements in paragraph 22.02; Responsible Party means any person who is accountable or responsible, whether solely or jointly with other persons in the lifecycle of a corporate bond or sukuk, and includes the following:
(a) the issuer;
(b) persons licensed by, or registered with the SC; (c) any person whose profession gives authority to a statement made by him, or is responsible or accountable for having prepared or certified any opinion or statement or report for use in connection with the corporate bonds or sukuk; or (d) any other persons identified by the issuer as having- (i) authority over, makes or has substantial influence in making decisions that affect the whole or a part of the lifecycle of the corporate bonds or sukuk; or

(ii) a significant role, function, accountability or responsibility in relation to a corporate bond or sukuk; retail investors has the meaning assigned to it under the Guidelines on Sales Practices of Unlisted Capital Market Products; SAC means the Shariah Advisory Council of the SC; sukuk means certificates of equal value evidencing undivided ownership or investment in the assets using Shariah principles and concepts endorsed by the SAC; For avoidance of doubt, sukuk does not include sukuk issued by- (a) the Federal Government; (b) any State Government; or (c) Bank Negara; sukuk bai’ bithaman ajil refers to certificates of equal value evidencing the certificate holder’s undivided ownership of the asset, including the rights to the receivables arising from the underlying contract; sukuk ijarah refers to certificates of equal value evidencing the certificate holder’s undivided ownership of the leased asset and/or usufruct and/or services and rights to the rental receivables from the said leased asset and/or usufruct and/or services; sukuk istisna` refers to certificates of equal value evidencing the certificate holder’s undivided ownership of the asset, including the rights to the receivables arising from the

underlying contract; sukuk mudharabah refers to certificates of equal value evidencing the certificate holder’s undivided ownership in the mudharabah venture; sukuk murabahah refers to certificates of equal value evidencing the certificate holder’s undivided ownership of the asset, including the rights to the receivables arising from the underlying contract; sukuk musharakah refers to certificates of equal value evidencing the certificate holder’s undivided ownership in the musharakah venture; sukuk programme means a facility which allows multiple issues, offers or invitations to subscribe or purchase Islamic MTNs, within an availability period which is disclosed to the SC and sukukholders; sukuk wakalah bi alistithmar refers to certificates of equal value evidencing the certificate holder’s undivided ownership in the investment assets pursuant to their investment through the investment agent.

Chapter 3
RESPONSIBLE PARTY
3.01 A Responsible Party must–
(a) carry out its roles and responsibilities in relation to the corporate bonds or sukuk; (b) discharge its functions with integrity, due care, knowledge, skill and diligence; (c) declare any conflict of interest, actual or potential, and effectively manage them in the best interest of the bondholder or sukukholder; and (d) have in place policies and processes to identify, monitor, manage and mitigate conflict of interest. Such policies and processes must be continuously reviewed to ensure their continued effectiveness.
3.02 A Responsible Party who is aware of any change or likelihood of any change that
may render any information or document submitted to the SC or provided to bondholders or sukukholders to be false, misleading or contain any material omission, must immediately inform the principal adviser to enable the principal adviser or lead arranger to make the necessary revision.
3.03 No person shall frustrate or impede the performance of the roles and
responsibilities of a Responsible Party.
3.04 The principal adviser must identify all other Responsible Parties accountable or
responsible in the lifecycle of a corporate bond or sukuk. In the event a Responsible Party ceases to be accountable or responsible for any of the roles or responsibilities relating to a corporate bond or sukuk, the principal adviser must identify a new Responsible Party to undertake such a role and responsibility.
3.05 All Responsible Parties must set out their respective roles and responsibilities in
relation to the corporate bonds or sukuk.

Requirement applicable to issuer, principal adviser and lead arranger
3.06 An issuer, principal adviser and lead arranger must make timely disclosure of
material information and ensure the accuracy and completeness of such information to enable investors to make an informed assessment of the issuer and the issuance.

PART B: REQUIREMENTS FOR ISSUANCE OF CORPORATE BONDS AND SUKUK
Chapter 4
ELIGIBILITY
Issuers
4.01 Only the following issuers are eligible to issue corporate bonds or sukuk under
these Guidelines:
(a) A public company whose shares are listed and quoted on a stock exchange; (b) A licensed bank, licensed investment bank or licensed Islamic bank; (c) Cagamas Bhd; (d) Danajamin Nasional Bhd; (e) Khazanah Nasional Bhd; or (f) A public company whose shares are not listed and quoted on a stock exchange, provided that – (i) the corporate bonds or sukuk are irrevocably and unconditionally guaranteed in full by any of the entities referred to in the above sub-paragraphs (a), (b), (c), (d), (e) or the Credit Guarantee and Investment Facility; or (ii) the sukuk are issued by a public company established by any of the entities referred to in the above sub-paragraphs (a), (b), (c), (d) or (e), with full recourse to the establishing entity in its capacity as obligor.

Corporate bonds or sukuk
4.02 Corporate bonds or sukuk must have the following characteristics:
(a) Denominated in ringgit Malaysia;
(b) A tenure of more than one year;
(c) Fixed term with principal and any accrued interest/returns/profit payable at expiry; (d) Fixed or variable rate of return/profit rate; (e) Interests/returns/profits to be paid periodically on certain specified intervals from the issue date, except for zero-coupon corporate bonds or sukuk without periodic distribution; (f) Rank at least equally with amounts owing to unsecured and unsubordinated creditors; and (g) Does not embed any swaps, options2 or other derivatives, except in the case of convertible or exchangeable corporate bonds or sukuk where:
(i) The option is to convert or exchange the corporate bonds or sukuk into shares; (ii) The option to convert or exchange the corporate bonds or sukuk into shares is at the discretion of the investor; and (iii) The underlying shares are listed and quoted on a stock exchange. Corporate bonds or sukuk issued for capital adequacy requirement purposes
4.03 Notwithstanding paragraphs 4.01 and 4.02 above, the following entities may issue
corporate bonds or sukuk that meet the requirements for regulatory capital as set out in the relevant guidelines on capital adequacy issued by Bank Negara:
(a) A licensed bank, licensed investment bank or licensed Islamic bank; or

2 An option does not include any undertaking under a sukuk structure.

(b) The holding company of any of the entities referred to in sub-paragraph (a).
4.04 The corporate bonds or sukuk issued by an entity referred to in paragraph 4.03
must have the following characteristics:
(a) Denominated in ringgit Malaysia;
(b) A tenure of more than one year; and
(c) Where the terms include a contractual write-off or conversion into equity, such terms may only be exercised to meet the requirements set out in the relevant guidelines on capital adequacy issued by Bank Negara.

Chapter 5
RATING REQUIREMENTS
Credit rating
5.01 All corporate bonds or sukuk must be rated by a credit rating agency registered
with the SC.
5.02 This chapter does not apply to an issuance of the following:
(a) Convertible loan stocks or Islamic loan stocks; and (b) Convertible bonds, sukuk, loan stocks or Islamic loan stocks, and exchangeable bonds or sukuk which fulfil the following requirements:
(i) Holders of such products are given the right to convert or exchange such products into underlying shares at any time or within a reasonable period(s) during the tenure of such products; and (ii) The underlying shares are listed and quoted on a stock exchange.
5.03 The final credit rating for the corporate bonds or sukuk must be made available
as part of the submission for approval that is made to the SC. Where the final credit rating is not available, an indicative credit rating must be submitted to the SC.
5.04 In the case of a debt or sukuk programme, where the credit rating is not assigned
for the full amount of the programme but for part of the amount (partial credit rating)– (a) the first issuance under the debt or sukuk programme must be rated; and (b) the principal terms and conditions of the debt or sukuk programme must include– (i) a disclosure of all the pre-conditions, relevant risk factors and all material information relating to the partial credit rating; and

(ii) a provision that states all subsequent issuances of the debt or sukuk programme will be rated.
5.05 In the case where the issuer decides to rely on more than one credit rating for a
corporate bond or sukuk for the purpose of offering the corporate bond or sukuk, the issuer must disclose such credit ratings in its application for approval to the SC.
5.06 In the case where the issuer decides to rely on more than one credit rating for a
corporate bond or sukuk that has been approved by the SC, a revision of terms and conditions is required and the issuer must- (a) comply with all requirements under Chapter 13 of these Guidelines; and (b) in the case where the corporate bond or sukuk has been issued, inform all bondholders or sukukholders immediately prior to submission of notification to the SC for the revision.
5.07 In the case where the issuer has relied on more than one credit rating for a
corporate bond or sukuk, and subsequently decides to remove any of the credit rating, a revision to terms and conditions is required and the issuer must– (a) comply with all relevant requirements under Chapter 13 of these Guidelines; and (b) in the case where the corporate bond or sukuk has been issued, obtain prior consent of the bondholders or sukukholders.
5.08 For the replacement of an appointed credit rating agency during the tenure of the
corporate bond or sukuk, the issuer must– (a) obtain prior consent of the bondholders or sukukholders; and (b) inform the principal adviser of the replacement.
5.09 An issuer must provide sufficient and relevant information to the credit rating
agency for the purpose of assessing and evaluating the credit risk of the corporate bonds or sukuk.

5.10 An issuer must provide information to the credit rating agency on a continuous
and timely basis in particular, new or additional information that was not previously available for consideration by the credit rating agency.
5.11 An issuer must ensure that the credit rating report is published by the credit rating
agency at least seven business days prior to the issuance of the corporate bond or sukuk.

Chapter 6
TRUSTEE AND TRUST DEED REQUIREMENTS
6.01 The issuer and principal adviser must involve the trustee during the
documentation process of the corporate bonds or sukuk. The trustee must likewise actively play its part by providing comments and feedback.
6.02 The issuer must provide the necessary assistance to facilitate the trustee in
discharging its duties and obligations under the CMSA and the trust deed.

Chapter 7
IMPLEMENTATION TIME FRAME
7.01 Any corporate bonds or sukuk approved under these Guidelines must be
implemented within one year from the date of the SC’s approval except in the case of a debt or sukuk programme.
7.02 For a debt or sukuk programme, the first issuance must be made within two years
from the date of the SC’s approval.

Chapter 8
UTILISATION OF PROCEEDS
8.01 An issuer must ensure that proceeds from the approved corporate bonds and
sukuk are utilised in accordance with the purposes disclosed to the SC.
8.02 For sukuk, the issuer must ensure that the proceeds from the sukuk issuance are
utilised for Shariah-compliant purposes only.
8.03 Where the proceeds are utilised for a project which will generate cash flow for
payments to bondholders or sukukholders, the issuer must ensure that the transaction documents relating to the corporate bonds or sukuk include the relevant parameters, conditions, supporting documents and certificates to enable the trustee or facility agent, where applicable, to manage the release of the proceeds to the issuer.

Chapter 9
MODE OF ISSUANCE
9.01 All corporate bonds or sukuk must be–
(a) issued and/or tendered on the Fully Automated System for Issuing/Tendering (FAST); and (b) issued on scripless basis, deposited and settled in the Real Time Electronic Transfer of Funds and Securities (RENTAS) system which is operated by PayNet, unless a full admission to listing and quotation is sought on a stock exchange.

Chapter 10
OTHER REGULATORY APPROVALS AND COMPLIANCE WITH RELEVANT LAWS AND GUIDELINES
10.01 Where applicable, an issuer must ensure that–
(a) it has complied with all relevant regulatory requirements from other regulatory authorities prior to its submission for approval to the SC; and (b) it continues to comply with any conditions imposed by such regulatory authorities throughout the tenure of the corporate bonds and sukuk.
10.02 For the purpose of sub-paragraph 10.01(a) where an approval from any other
regulatory authority is required, such approval must be valid and subsisting at the point of submission to the SC.
10.03 An issuer and its principal adviser must ensure that the issuance has complied
with all the relevant laws.

PART C: APPROVAL FOR ISSUANCE OF CORPORATE BONDS AND SUKUK
Chapter 11
APPROVAL
General
11.01 The SC may grant its approval and, where applicable, register the prospectus for
a proposed issue of corporate bonds or sukuk subject to receipt of complete set of documents and full compliance with relevant requirements as provided in these Guidelines.
11.02 The approval from the SC for a debt or sukuk programme is granted on the basis
of continuous compliance by the issuer with all the requirements in these Guidelines.
11.03 For the purpose of paragraph 11.01, a complete set of documents must include
the following:
(a) For issuers other than a Qualified Issuer– (i) the information and documents as set out in Appendix 1 of these Guidelines; (ii) a prospectus (except where an abridged prospectus or a modified prospectus complying with the form and content of an abridged prospectus is applicable, in which case Division 5 of Part II of the Prospectus Guidelines will apply); (iii) a Product Highlights Sheet (PHS) that complies with the requirements set out in the Guidelines on Sales Practices of Unlisted Capital Market Products; and

(b) for Qualified Issuers–
(i) the information and documents as set out in Appendix 1 of these Guidelines; (ii) a PHS; and (iii) where applicable, an information memorandum (including any supplemental or replacement information memorandum).
11.04 For the purpose of prospectus registration, the prospectus submitted to the SC
must be complete and fully comply with the relevant requirements of the Prospectus Guidelines. Post-issuance notice
11.05 For all issuances of corporate bonds or sukuk, an issuer must submit a postissuance notice to the SC within seven business days from the date of issuance.
11.06 The principal adviser is responsible for submitting the post-issuance notice.
11.07 The post-issuance notice must contain all information and documents as set out
in Appendix 2.
11.08 In the case of a debt or sukuk programme, submission of the post-issuance notice
would apply to each issuance under the programme.

Chapter 12
CONTINUOUS DISCLOSURE OBLIGATIONS
Corporate Bonds or Sukuk Offered Over-the-Counter
12.01 Where the corporate bonds or sukuk are to be offered over-the-counter (OTC),
the issuer must disclose any information which may have a material effect on– (a) the price or value of the corporate bonds or sukuk; or (b) an investor’s decision whether to invest in that corporate bonds or sukuk, on the platform.
12.02 In addition to paragraph 12.01 above, the issuer must immediately announce the
following on the platform:
(a) Any issuance of a new tranche or programme by the issuer; (b) Any change in the terms and conditions of the corporate bonds or sukuk; (c) Any redemption or cancellation of the corporate bonds or sukuk; (d) Any amendment to the trust deed; (e) Any appointment or replacement of the trustee or where applicable, paying agent; (f) For sukuk, any replacement of the Shariah adviser appointed by the issuer; (g) Any occurrence of an event of default under the trust deed;

(h) Credit rating of the corporate bonds or sukuk, including a summary of the rating report relevant to the corporate bonds or sukuk published by a credit rating agency; (i) Any event which requires an immediate notification to the trustee under the trust deed; (j) Any meeting of bondholders or sukukholders (other than a meeting convened to pass a special resolution), at least 14 days before such meeting is held, and in the case of a meeting convened to pass a special resolution, at least 21 days before such meeting is held. The announcement must include the date of the record of depositors which determines whether a depositor shall be regarded as a bondholder or sukukholder, hence entitled to attend, speak and vote at the meeting of the bondholder or sukukholder; and (k) Make available the latest annual audited financial statements to its bondholder or sukukholder throughout the tenure of the corporate bonds or sukuk.
12.03 Sub-paragraph 12.02(k) above will not apply under the following circumstances
where financial statements are already made available on the stock exchange:
(a) If the issuer is listed and quoted on the stock exchange; or (b) If the corporate bond or sukuk is listed on the Exempt Regime. Corporate bonds or sukuk offered on the stock exchange
12.04 Where the corporate bonds or sukuk are to be offered on the stock exchange, the
issuer must also comply with the continuous disclosure obligations set out in the Listing Requirements of Bursa Securities. Additional continuous disclosure obligations
12.05 The issuer must announce the maturity date of each issuance of the corporate
bonds or sukuk at least one month before the maturity date.

12.06 In the case of an early redemption of the corporate bonds or sukuk–
(a) bondholders or sukukholders must be informed of the relevant details of such redemption, including details of the proposed bondholders’ or sukukholders’ resolution where appropriate, as soon as possible through an announcement via– (i) the platform, for corporate bonds and sukuk offered OTC; or (ii) the stock exchange, for corporate bonds and sukuk offered on the stock exchange; and (b) another announcement must be made soonest practicable after consent from bondholders or sukukholders has been obtained for the early redemption (where applicable).
12.07 In the case of a debt or sukuk programme approved by the SC, the issuer must
ensure that a pricing supplement is made available to its bondholders or sukukholders prior to each issuance under the debt or sukuk programme.
12.08 The pricing supplement must include the following terms (final or indicative):
(a) Date, size and tenure of issue;
(b) Credit rating;
(c) Coupon/interest/profit rate of the issuance; and (d) Utilisation of proceeds raised from the issuance.
12.09 Paragraphs 12.07 and 12.08 above do not apply if an issuance under the debt or
sukuk programme is issued or offered on a primary subscription basis (under a bought-deal or private placement arrangement).

Chapter 13
REVISION TO PRINCIPAL TERMS AND CONDITIONS General requirements
13.01 Any revision to the principal terms and conditions of a corporate bond or sukuk
issuance must not result in non-compliance with any requirements provided in these Guidelines. Approval required
13.02 Any revision made to the principal terms and conditions of a corporate bond or
sukuk, which has been approved by the SC but has not yet been issued, requires the SC’s prior approval. In the case of a debt or sukuk programme, the first issuance under the debt or sukuk programme must not have taken place. Notification required
13.03 The SC’s prior approval is not required for any revision to principal terms and
conditions of a corporate bond or sukuk which has been approved by the SC and has already been issued.
13.04 Notwithstanding paragraph 13.03 above, the issuer must notify the SC of such
revision through its principal adviser within 14 business days after the date of the proposed revision comes into effect.
13.05 Notification to the SC is made by submitting to the SC the relevant information
and documents as set out in Appendix 3 of these Guidelines.
13.06 Prior to the revision, the principal adviser must ensure that the issuer has obtained
consent from the relevant parties for the proposed revision to principal terms and conditions, if such consent is required.
13.07 Where consent from bondholders or sukukholders is required for any proposed
revision to the principal terms and conditions, the principal adviser must ensure the following:

(a) Due process has been observed in obtaining bondholders’ or sukukholders’ consent. This includes the requirement that the issuer and any interested persons of the issuer abstain from voting in the meeting convened to obtain bondholders’ or sukukholders’ consent; (b) All material information pertinent to the revision, including the impact on credit rating, has been disclosed to bondholders or sukukholders; (c) For corporate bonds or sukuk offered OTC, two separate announcements have been made on the platform- (i) on the proposed revision, which must be announced prior to obtaining bondholders’ or sukukholders’ consent; and (ii) on the outcome of the bondholders’ or sukukholders’ decision, which must be made immediately after the bondholders’ or sukukholders’ decision; (d) For corporate bonds or sukuk offered on the stock exchange, the announcements under sub-paragraphs 13.07(c)(i) and (ii) above must be made on the stock exchange; and (e) The announcements as per sub-paragraphs 13.07(c) or (d) above, as the case may be, are copied to the SC within 2 business days from the date of announcements. Upsizing of a debt or sukuk programme
13.08 Any revision to the principal terms and conditions to increase the issuance size of
a one-off issuance of corporate bonds or sukuk is not allowed.
13.09 An issuer may revise the principal terms and conditions to increase the size of a
debt or sukuk programme, either pre-issuance or post-issuance, subject to the following conditions:
(a) The voting for the debt or sukuk programme is carried out on a “per series” basis and not on a collective basis; and (b) The option to upsize must have been clearly provided for in the initial

application submitted to the SC in relation to the debt or sukuk programme.
13.10 Such upsizing, either pre-issuance or post-issuance under paragraph 13.09 above,
would require the SC’s approval and must comply with the requirements under paragraphs 13.11 to 13.14 below of these Guidelines.
13.11 Any upsizing of a debt or sukuk programme, either pre-issuance or post-issuance,
would require an issuer to submit all information and documents as specified in
Appendix 4 of these Guidelines and comply with all relevant requirements under
Chapter 11 of these Guidelines.
13.12 Prior to the upsizing, the principal adviser must ensure that the issuer has
obtained consent from the relevant parties for the upsizing, if such consent is required.
13.13 Where consent from bondholders or sukukholders is required for any proposed
upsizing, the principal adviser must ensure the following- (a) Due process has been observed in obtaining bondholders’ or sukukholders’ consent. This includes the requirement that the issuer and any interested persons of the issuer abstain from voting in the meeting convened to obtain bondholders’ or sukukholders’ consent; (b) All material information pertinent to the upsizing, including the impact on credit rating, has been disclosed to bondholders or sukukholders; (c) For corporate bonds or sukuk offered OTC, two separate announcements have been made on the platform in relation to the following:
(i) The proposed upsizing, which must be announced prior to obtaining bondholders’ or sukukholders’ consent; and (ii) The outcome of the bondholders’ or sukukholders’ decision, which must be made immediately after the bondholders’ or sukukholders’ decision;

(d) For corporate bonds or sukuk offered on the stock exchange, the announcements under sub-paragraphs 13.13(c)(i) and (ii) above must be made on the stock exchange; and (e) The announcements under sub-paragraphs 13.13(c) or (d) above, as the case may be, are copied to the SC within two business days from the date of announcements.
13.14 An issuer must also ensure that any exercise to upsize a debt or sukuk programme
does not unfairly discriminate or is otherwise prejudicial to existing bondholders or sukukholders of the debt or sukuk programme. Revision to terms and conditions of sukuk
13.15 If the revision to the principal terms and conditions has any Shariah implications,
the issuer through the principal adviser must first refer such matters to the SAC for endorsement prior to seeking approval from, or submission of notification to, the SC.
13.16 For the purpose of the endorsement under paragraph 13.15 above, the principal
adviser must submit to the SC the information and documents as specified in
Appendix 6 these Guidelines.

Chapter 14
SUBMISSION TO THE SC
14.01 All submissions to the SC must be made by an issuer through a principal adviser.
14.02 All documents to be submitted to the SC must be made in two hard copies and
one electronic copy.
14.03 Any submission in electronic copy must be prepared in the manner specified in
Appendix 5 of these Guidelines.
14.04 The information and documents to be submitted to the SC for the purpose of the
SC’s approval are set out in the following appendices:
(a) Appendix 1 – Approval for issuance;
(b) Appendix 2 – Post-issuance notice;
(c) Appendix 3 – Revision to principal terms and conditions post-issuance; and (d) Appendix 4 – Approval for upsizing.
14.05 An issuer and the principal adviser must furnish any other information or
documents as requested by the SC.

PART D: ADDITIONAL SHARIAH REQUIREMENTS FOR SUKUK
Chapter 15
GENERAL
15.01 An issuer must appoint a Shariah adviser to carry out the roles and responsibilities
as set out in this chapter.
15.02 A Shariah adviser must either be–
(a) an individual or a corporation, registered with the SC; (b) a licensed Islamic bank; or (c) a licensed bank or licensed investment bank approved to carry on Islamic banking business. Roles and responsibilities of Shariah adviser
15.03 The Shariah adviser must carry out roles and responsibilities including–
(a) advising on all aspects of the issuance of sukuk in accordance with Shariah principles; (b) providing Shariah expertise and guidance on all matters, particularly in documentation, structuring and investment instruments, and ensure compliance with relevant securities laws and guidelines issued by the SC; (c) ensuring that the applicable Shariah rulings, principles and concepts endorsed by the SAC are complied with; and (d) applying ijtihad (intellectual reasoning) to ensure all aspects relating to the sukuk are in compliance with Shariah, in the absence of any rulings, principles and concepts endorsed by the SAC.

15.04 In addition to the roles and responsibilities specified under paragraph 15.03
above, the Shariah adviser must issue a Shariah pronouncement where the signing procedures must comply with the requirements specified by the SAC. The Shariah pronouncement must include the following:
(a) Basis and rationale of the pronouncement, structure and mechanism of the sukuk issue; (b) The applicable Shariah rulings, principles and concepts used in the sukuk issue; and (c) The relevant Shariah matters relating to the documentation of the sukuk issue.

Chapter 16
COMPLIANCE WITH SHARIAH RULINGS, PRINCIPLES AND CONCEPTS
16.01 The structure of sukuk must be in compliance with the approved Shariah rulings,
principles and concepts that are provided for under chapters 17, 18 and 19 and
Appendix 7 of these Guidelines, as well as any other Shariah rulings, principles
and concepts endorsed by the SAC from time to time.
16.02 Where the structure of sukuk departs from or does not comply with–
(a) the approved Shariah rulings, principles and concepts that are provided for under chapters 17, 18 and 19 and Appendix 7 of these Guidelines; or (b) any other Shariah rulings, principles and concepts endorsed by the SAC from time to time, the rulings of the SAC must be obtained prior to any submission of information and documents for approval under these Guidelines.

Chapter 17
GENERAL SHARIAH RULINGS APPLICABLE TO SUKUK Naming of sukuk
17.01 The name of sukuk must not be misleading and must be based on the following:
(a) Where the sukuk are structured using a single Shariah principle, the sukuk must be named according to that Shariah principle. For example, sukuk that are structured under the musharakah principle must be named sukuk musharakah; (b) Where the sukuk are structured using multiple Shariah principles, the sukuk may be named– (i) according to the name of the issuer or obligor (where applicable); (ii) sukuk istithmar (investment); or (iii) based on any other names according to the principles endorsed by the SAC from time to time; and (c) For SRI sukuk, the sukuk may be named– (i) according to the name of the issuer or obligor (where applicable); or (ii) SRI sukuk.
17.02 The application of the multiple Shariah principles must be disclosed in the
principal terms and conditions of the sukuk.

Requirement of identified assets, ventures and/or investments
17.03 In relation to sukuk bai bithaman ajil, sukuk murabahah, sukuk istisna and
sukuk ijarah, an asset, whether tangible or intangible, available for such sukuk issuance are subject to the following:
(a) The identified asset and its use must comply with Shariah requirements; (b) If the identified asset is subject to any encumbrance or is jointly-owned with another party, prior consent must be obtained from the chargee or joint-owner; and (c) Where the identified asset is in the form of a receivable, it must be mustaqir (established and certain) and transacted on spot either in the form of cash or commodities.
17.04 In relation to sukuk musharakah, sukuk mudharabah and sukuk wakalah bi alistithmar, the ventures and/or investments must comply with Shariah
requirements.
Asset pricing
17.05 The purchase price for the sale and purchase of an identified asset under sukuk
bai bithaman ajil, sukuk murabahah, sukuk istisna and sukuk ijarah must comply with the following requirements:
(a) The purchase price must not exceed 1.51 times the market value of the asset; or (b) In cases where the market value of a particular asset cannot be ascertained, a fair value or any other value must be applied.
17.06 The asset pricing requirement under paragraph 17.05 above is not applicable for
sukuk ijarah that does not involve the sale and purchase of identified assets.

Ibra’ (Release of rights)
17.07 Ibra’ may be applied in the following contracts (including but not limited to):
(a) Bai bithaman ajil, Murabahah and Musawamah Ibra’ refers to release of rights on debts or amount due and payable under a contract; and (b) Ijarah Ibra’ refers to release of rights on accrued rental. 17.08 Ibra’ may be applied in the following situations: (a) Early Redemption (i) Sukukholders may offer ibra’ to the issuer based on the application made by the issuer for early redemption of sukuk upon occurrence of any event of default, call option, regulatory redemption or tax redemption; (ii) The formula for the computation of early settlement may be stated as a guide to the issuer; and (iii) The ibra’ clause and the formula for the computation of early settlement may be stated in the main agreement of sukuk bai bithaman ajil, sukuk murabahah and sukuk ijarah. However, the ibra’ clause in the main agreement shall be separated from the part related to the price of the transacted asset. The ibra’ clause shall only be stated under the section for mode of payment or settlement in the said agreement. (b) Other Circumstances Sukukholders may offer ibra’ to the issuer in any circumstance that requires the sukukholders to release their rights and claim on any obligation. This circumstance may require the sukuk to be written-off at the point of non-viability as set out in the relevant guidelines on capital adequacy issued by Bank Negara.

17.09 Through the application of ibra’, variable rate mechanism may be applied to
sukuk bai bithaman ajil and sukuk murabahah which may be benchmarked to the prevailing market rates. Tawidh (Compensation)
17.10 Tawidh is permissible under sukuk bai bithaman ajil, sukuk murabahah, sukuk
istisna and sukuk ijarah only if the issuer/obligor delays the payment of any amount due and payable to the sukukholders. 17.11 Tawidh is permissible under sukuk musharakah and sukuk mudharabah if the
issuer/obligor–
(a) fails to distribute the realised profit to the sukukholders on the agreed date. Tawidh does not apply to the failure to pay expected profit; or (b) delays the payment of any amount due and payable to the sukukholders upon dissolution of musharakah or mudharabah arrangement. 17.12 Tawidh is permissible under sukuk wakalah bi al-istithmar if the issuer/wakil
(agent)–
(a) breaches its fiduciary duty as an investment manager due to its failure to distribute the realised profit to the sukukholders on the agreed date; or (b) delays the payment of any amount due and payable to the sukukholders upon dissolution of wakalah arrangement.
17.13 The rate of ta`widh is determined by the SAC from time to time and is available
on the Islamic Capital Market section of the SC website.

Kafalah (Guarantee)
Parties who can guarantee
17.14 Under sukuk bai bithaman ajil, sukuk murabahah, sukuk istisna and sukuk
ijarah, kafalah may be provided by any party, with or without the imposition of fee.
17.15 Under sukuk musharakah and sukuk mudharabah, kafalah may be provided by
any third party, with or without the imposition of fee.
17.16 Under sukuk wakalah bi al-istithmar, kafalah may be provided by the following
parties, with or without the imposition of fee– (a) a third party; (b) wakil or sub-wakil appointed by the issuer; or (c) related party or associated company of the issuer.
17.17 The kafalah by parties listed under sub-paragraphs 17.16(b) and (c) above must
be a separate arrangement from the wakalah, where any termination of the wakalah would not affect the kafalah arrangement and vice-versa.
17.18 If kafalah cannot be procured from Islamic banks or kafalah provider, conventional
guarantee is allowed to be procured.
Amount to be guaranteed
17.19 Under sukuk bai bithaman ajil, sukuk murabahah, sukuk istisna and sukuk
ijarah, the amount that may be guaranteed is limited to the amount due under any obligation arising from the relevant contracts under the said sukuk issuance.
17.20 Under sukuk musharakah and sukuk mudharabah, the amount that may be
guaranteed is limited to the following:
(a) Musharakah and mudharabah capital; or (b) The payment of any amount due and payable to the sukukholders upon dissolution of musharakah and mudharabah arrangement.

17.21 Under sukuk wakalah bi al-istithmar, the amount that may be guaranteed is
limited to the following:
(a) By third party–
(i) nominal amount of the sukuk and/or profit/rental arising from contracts under the Shariah principles of bai bithaman ajil, murabahah, istisna and ijarah; (ii) principal amount arising from contracts under the Shariah principles of musharakah, mudharabah and wakalah; or (iii) any amount due and payable to the sukukholders upon dissolution of wakalah arrangement. (b) By wakil or sub-wakil appointed by the issuer, its related party or associated company– (i) amount due under any obligation arising from contracts under the Shariah principles of bai bithaman ajil, murabahah, istisna and ijarah; or (ii) the payment of any amount due and payable to the sukukholders upon dissolution of wakalah arrangement.

Chapter 18
SHARIAH RULINGS APPLICABLE TO SPECIFIC TYPES OF SUKUK Shariah rulings applicable for sukuk ijarah Rate of lease and lease period
18.01 The rate of lease rental and lease period must be determined upon the `aqd
(contract).
Usage of leased asset
18.02 The leased asset must be used for the purpose of Shariah-compliant activities
only.
Sub-lease of leased asset to third party by lessee
18.03 The lessee may sub-lease the leased asset to a third party provided that–
(a) there is no objection from the owner of the asset; and (b) the sub-lease period must not be longer than the initial or primary lease. Lease of a leased asset to third party by owner of asset
18.04 The owner of the leased asset must not lease the asset to a third party while the
same asset is being leased to another party during the lease period. Implied sub-lease
18.05 In the event the asset of an existing lease is sold by the original owner/lessor to
the purchaser, the original owner/lessor must provide prior written notification to the existing lessee on the sale of the asset.
18.06 Upon purchase of the asset, if the same asset is leased back (new lease) by the
purchaser to the original owner/new lessee, the existing lease will be considered as implied sub-lease whilst the new lease will be considered as head-lease.
18.07 The notification provided under paragraph 18.05 above does not terminate the
existing lease.

Maintenance of leased asset
18.08 The lessor is responsible for maintaining the leased asset. However, the
maintenance of leased asset may also be determined as agreed by both parties as stated in the terms and conditions of the ijarah agreement. The lessor can also assign the responsibility to the lessee as service agent at the lessor’s cost. Ijarah mawsufah fi zimmah (Forward lease)
18.09 An ijarah mawsufah fi zimmah is a permissible contract for the issuance of sukuk.
18.10 An ijarah mawsufah fi zimmah is a lease contract where the asset will be delivered
in the future. The contract must state the following:
(a) The rate of lease rental;
(b) The nature of the leased asset;
(c) The lease period; and
(d) The method of lease payment.
18.11 However, if upon delivery, the lessor fails to deliver the asset based on the agreed
specification, the lessee is entitled to either– (a) demand a replacement of the asset with another asset that conforms to agreed specifications; or (b) terminate the ijarah contract, and if the lessee has paid the advance rental, the lessor must refund the amount paid. Variable rate mechanism
18.12 The rate of lease rental may be based on variable rates. In the case of variable
rate, the effective lease period and the lease rental computation must be agreed upon `aqd.

Transfer of ownership of leased asset
18.13 At the end of the lease period, the ownership of the leased asset may be
transferred from the lessor to the lessee or to any third party through any one of the following methods:
(a) By way of selling the leased asset at an agreed price; or (b) By way of hibah (gift) of the leased asset. Requirement of takaful for identified asset
18.14 All identified assets must be insured by takaful scheme. However, if the takaful
scheme is not available (or is not commercially viable), conventional insurance is allowed to be procured.
18.15 If the asset has been insured under conventional insurance policy upon entering
into the contract, the said insurance policy can still be used until its expiry date. Upon its expiry, the asset owner must renew it with takaful scheme if it is available. Shariah rulings applicable for sukuk musharakah Musharakah capital
18.16 Capital contributed by each of the musharik (partners) must be in the form of
cash, in kind or a combination of both.
Musharakah partners
18.17 There must be at least two partners to form a musharakah. However, there is no
minimum number of musharakah partners (i.e. investors) in the secondary market. Profit and loss
18.18 The profit from musharakah venture will be distributed among the partners
according to the pre-agreed profit sharing ratio. However, any loss must be shared among the partners according to their respective capital contribution.

Tanazul (Waiver of Right)
18.19 A partner may waive his right on the profit payment from the musharakah
venture.
Management of the musharakah venture
18.20 One of the partners or issuer or a third party may be appointed as the manager
to manage the musharakah venture.
Shariah rulings applicable for sukuk mudharabah Mudharabah capital
18.21 Capital contributed by a rabb al-mal (capital provider) must be in the form of
cash, in kind or a combination of both.
Rahn (Collateral)
18.22 The rabb al-mal may request mudharib (entrepreneur) to place rahn as protection
from possibility of loss on capital that may occur as a result of negligence and misconduct by the mudharib. Profit and loss
18.23 The profit from mudharabah venture must be distributed between the rabb almal and the mudharib according to the pre-agreed profit sharing ratio. However,
any loss must be borne in entirety, solely by the rabb al-mal, unless the loss is due to the negligence or mismanagement of the mudharib in managing the mudharabah venture. Tanazul (Waiver of right)
18.24 A partner may waive his right on the profit payment from the mudharabah
venture.

Management of the mudharabah venture
18.25 The management of the mudharabah venture may be carried out by the mudharib
or a third party appointed by the mudharib.
Shariah rulings applicable for sukuk wakalah bi al-istithmar Wakalah (agency) appointment
18.26 There must be a wakalah agreement between the investors and the issuer,
appointing the issuer as wakil for the purpose of investment. In the absence of a wakalah agreement, a clause for the appointment of the wakil must be provided in the trust deed. Tanazul (Waiver of Right)
18.27 Sukukholders may waive their rights to the profit payment from the wakalah
arrangement.

Chapter 19
REVISION TO TERMS AND CONDITIONS OF SUKUK Revision of profit rate
19.01 In the case of sukuk bai bithaman ajil, sukuk murabahah and sukuk istisna–
(a) a revision to reduce the profit rate may only be effected by applying the principle of ibra’ without the need to execute a supplemental contract; and (b) a revision to increase the profit rate through a selling price in a new contract may only be effected by executing a new and separate contract to incorporate the new profit rate, after which the outstanding obligation under the initial contract will be settled and terminated. This arrangement must be carried out before the maturity of the deferred payment in the initial contract.
19.02 In the case of sukuk musharakah, sukuk mudharabah, sukuk wakalah bi alistithmar and sukuk ijarah, the revision to the profit rate/ratio (either increasing
or reducing the profit rate/ratio) may only be effected by executing a supplemental contract subject to agreement by all contracting parties.
19.03 In the case of sukuk musharakah, sukuk mudharabah and sukuk wakalah bi alistithmar, the revision of the expected profit rate (either increasing or reducing
the expected profit rate) may be effected by executing a supplemental contract subject to agreement by all contracting parties.
19.04 In the case of sukuk ijarah, the revision of the rental (either increasing or reducing
the rental) may be effected by executing a supplemental contract subject to agreement by all contracting parties. Revision of profit sharing ratio
19.05 In the case of sukuk musharakah and sukuk mudharabah, the revision of the
profit sharing ratio (either increasing or reducing the profit sharing ratio) may be effected by executing a supplemental contract subject to agreement by all contracting parties.

Revision to maturity date
19.06 A revision to the maturity date, in the case of sukuk bai bithaman ajil, sukuk murabahah and sukuk istisna, may be effected by executing a supplemental contract subject to the following conditions:
(a) The revision is agreed by all contracting parties; and (b) There is no revision to increase the selling price.
19.07 A revision to the maturity date, in the case of sukuk musharakah, sukuk
mudharabah, sukuk wakalah bi al-istithmar and sukuk ijarah, may be effected by executing a supplemental contract subject to agreement by all contracting parties.
19.08 Supplemental contract executed under paragraphs 19.02, 19.03, 19.04, 19.05,
19.06 and 19.07 does not terminate the initial contract of the sukuk bai bithaman ajil, sukuk murabahah, sukuk istisna, sukuk musharakah, sukuk mudharabah, sukuk wakalah bi al-istithmar and sukuk ijarah (as the case may be).

PART E: REQUIREMENTS FOR ISSUANCE OF SUSTAINABLE AND RESPONSIBLE
INVESTMENT SUKUK
Chapter 20
SUSTAINABLE AND RESPONSIBLE INVESTMENT (SRI) SUKUK
20.01 This Chapter sets out the additional requirements for an issuance of SRI sukuk.
20.02 For an SRI sukuk, an issuer must ensure that proceeds raised from the issuance
of the SRI sukuk are utilised for the purpose of funding Eligible SRI projects as described in paragraph 20.04 below. Eligible SRI projects
20.03 Eligible SRI projects refer to projects that aim to-
(a) preserve and protect the environment and natural resources; (b) conserve the use of energy; (c) promote the use of renewable energy; (d) reduce greenhouse gas emission; or (e) improve the quality of life for the society.
20.04 Only a project or physical assets/activities relating to an existing project in any of
the following sectors is deemed to be an Eligible SRI project:
(a) Natural resources – projects relating to– (i) sustainable land use; (ii) sustainable forestry and agriculture; (iii) biodiversity conservation;

(iv) remediation and redevelopment of polluted or contaminated sites; (v) water infrastructure, treatment and recycling; or (vi) sustainable waste management projects, (b) Renewable energy and energy efficiency – projects relating to– (i) new or existing renewable energy (solar, wind, hydro, biomass, geothermal and tidal); (ii) efficient power generation and transmission systems; or (iii) energy efficiency which results in the reduction of greenhouse gas emissions or energy consumption per unit output, (c) Community and economic development – projects relating to– (i) public hospital/medical services; (ii) public educational services; (iii) community services; (iv) urban revitalisation; (v) sustainable building projects; or (vi) affordable housing; or (d) Waqf properties/ assets – any projects that undertake the development of waqf properties/ assets. Appointment of an independent expert
20.05 The issuer must appoint an independent expert to undertake an assessment of
the Eligible SRI project.

Disclosure requirements
20.06 Where an issuer issues a prospectus or PHS in relation to the SRI sukuk, the
prospectus or PHS must include–
(a) details of the Eligible SRI project and, to the extent possible, impact objectives from the Eligible SRI project; and (b) a statement that the issuer has complied with the relevant environmental, social and governance standards or recognised best practices relating to the Eligible SRI project.
20.07 The independent expert must issue a report on the Eligible SRI project. Where a
prospectus or a PHS is required to be issued, the prospectus or PHS must contain a summary of the report together with a link to the website where investors may have free access to the full report.
20.08 The issuer must provide annual reporting, via newsletters, website updates,
annual report or any other communication channels, to sukukholders on the following:
(a) The original amount earmarked for the Eligible SRI project; (b) The amount utilised for the Eligible SRI project; (c) The unutilised amount and where such unutilised amount is placed or invested pending utilisation; and (d) Where feasible and to the extent possible, the impact objectives from the Eligible SRI project.

PART F: REQUIREMENTS FOR ISSUANCE OF ASEAN GREEN BONDS AND
SUKUK
Chapter 21
ASEAN GREEN BONDS AND SUKUK
21.01 This chapter sets out the additional requirements for an issuance of ASEAN Green
Bonds or Sukuk.
21.02 For an issuance of ASEAN Green Bonds or Sukuk, the issuer must ensure that the
issuance of the corporate bonds or sukuk adopts the standards as prescribed under the ASEAN Green Bond Standards.
21.03 An issuer must not–
(a) use or adopt the term “ASEAN Green” in relation to the name of its corporate bonds or sukuk; or (b) hold itself out as an issuer of “ASEAN Green” corporate bonds or sukuk, unless the issuance has complied with this chapter.

PART G: REQUIREMENTS FOR ISSUANCE OF CORPORATE BONDS AND SUKUK
UNDER THE QUALIFIED ISSUER FRAMEWORK
Chapter 22
QUALIFIED ISSUER FRAMEWORK
22.01 This chapter sets out the eligibility criteria for issuers who may issue corporate
bonds or sukuk under the Qualified Issuer framework. The requirements set out under this chapter are in addition to all other relevant requirements set out in these Guidelines.
22.02 An issuer specified in paragraph 4.01 who fulfils the following criteria may be a
Qualified Issuer-
(a) the issuer has issued or guaranteed corporate bonds or sukuk with an aggregate amount of at least RM500 million in the past five years; and (b) the corporate bonds or sukuk to be offered have a minimum credit rating of AA- (or its equivalent).
22.03 A Qualified Issuer may issue corporate bonds or sukuk to retail investors without
a prospectus, provided that the Qualified Issuer prepares a PHS in accordance with the Guidelines on Sales Practices of Unlisted Capital Market Products.

APPENDIX 1
INFORMATION AND DOCUMENTS TO BE SUBMITTED TO THE SC FOR APPROVAL Notes:

Applicable only for sukuk
PART 1: APPLICATION
1.01 An application letter which includes the following:
(a) Background information on the issuer including ultimate shareholder(s), whether the issuer is a related corporation of any Malaysian public-listed company (PLC) and whether the issuer is a Malaysian government-linked company; (b) Profile of directors of issuer, including– (i) national Registration Identity Card numbers for Malaysian directors; and (ii) passport numbers for non-Malaysian directors; Where the corporate bonds or sukuk involve obligor(s) and guarantor(s), the information set out in sub-paragraphs 1.01 (a) and (b) must also be provided on the said entities. (c) A description of the transaction and structure of the facility (one-time issue) or programme. In addition, specify whether it is a one-time issue or a programme; (d) Details of the utilisation of proceeds, including its schedule where applicable; (e) Primary and secondary sources of repayment; (f) Detailed breakdown of all upfront and recurring fees and expenses for the facility/programme;

(g) Waivers from complying with these Guidelines and other relevant guidelines of the SC obtained for the facility/programme, if any; (h) Conflict-of-interest situations and appropriate mitigating measures, if any; (i) Detailed information of the existing corporate bonds or sukuk issue or loans/financing to be refinanced by the facility/programme, if applicable; (j) Details of approval from other relevant regulatory authorities, if any; (k) Any other material information in relation to the issuer, facility/programme; (l) Name, telephone number, facsimile number and e-mail address of the officer-in-charge for the facility/programme; (m) Name, designation and contact details of the contact person of the issuer; and (n) Name, designation and contact details of the contact person of the key management personnel of the issuer.
1.02 Principal terms and conditions of the proposal (as per Part 2 of Appendix 1).
1.03 Parties to the Transaction.
Names of all parties involved in the lifecycle of the corporate bonds or sukuk (i.e. origination, at the point of distribution and after distribution) and their roles and responsibilities.
1.04 Rating letter.
1.05 Latest audited financial statements3
.
1.06 Copies of approval from other relevant regulatory authorities, if any.
1.07 Compliance checklist with these Guidelines.

3 The audited financial statements must be in accordance with the approved accounting standards as defined in the Financial Reporting Act 1997.

1.08 Compliance checklist with ASEAN Green Bond Standards.
1.09 Declaration by issuer (as per Part 3 of Appendix 1).
1.10 Declaration by Trustee (where the appointment of trustee falls under sub-section
260(2) of the CMSA).
1.11 Shariah pronouncement (including detailed reasoning/justification) where the
signing procedures must comply with the requirements as specified by the SAC*.
1.12 Diagram illustrating the flow of monies in the designated account(s), if applicable.
1.13 Any other documents.

PART 2: PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL
2.01 Background information
(a) Issuer:
(i) Name;
(ii) Date of incorporation;
(iii) Place of incorporation;
(iv) Address;
(v) Business registration number;
(vi) Residence status;
(vii) Place of listing, if applicable;
(viii) Date of listing, if applicable;
(ix) Industry sector of the issuer4
;
(x) Principal activities;
(xi) Principal activities of issuer’s subsidiaries, where applicable5 ; (xii) If the issuer is an SPV, state the name of the entity that established it; (xiii) Authorised, issued and paid-up capital; (xiv) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders; (xv) Board of directors; and (xvi) Disclosure of the following:
 If the issuer or its board members have been convicted or charged with any offence under any securities laws, corporation laws or other laws involving fraud or dishonesty in a court of law, or if any action has been initiated against

4 For public listed companies, to specify sectors as indicated in Bursa Securities. For unlisted and foreign companies, to specify based on Bursa Securities’ list of sectors that best describes the company’s principal activities. In the event where the issuer’s principal activity is investment holding.

the issuer or its board members for breaches of the same, for the past 10 years prior to the date of application/since incorporation (for issuer incorporated less than 10 years); and  If the issuer has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application; Where the corporate bonds or sukuk involve obligor(s) and guarantor(s), the information as set out in sub-paragraph 2.01(a) must also be provided on the said entities.
2.02 Principal terms and conditions
(a) Names of parties involved in the proposal, where applicable:
(i) Principal adviser;
(ii) Lead arranger;
(iii) Co-arranger;
(iv) Solicitor;
(v) Financial adviser;
(vi) Technical adviser;
(vii) Trustee;
(viii) Shariah adviser*;
(ix) Guarantor;
(x) Valuer;
(xi) Facility agent;
(xii) Primary subscriber (under a bought-deal arrangement) and amount subscribed; (xiii) Underwriter and amount underwritten; (xiv) Central depository;

(xv) Paying agent;
(xvi) Reporting accountant;
(xvii) Calculation agent; and
(xviii) Others (please specify);
(b) Name of facility;
(c) One-time issue or programme;
(d) Shariah principles*;
(e) Facility description (including transaction diagram and explanatory notes*); (f) Identified/trust asset*; (g) Purchase and selling price/rental (where applicable), including statement on compliance with asset pricing requirements*; (h) Expected facility/programme size (for programme, to state the option to upsize); (i) Tenure of facility/programme; (j) Availability period of debt or sukuk programme; (k) Interest/profit/coupon/rental rate (fixed/floating); (l) Interest/profit/coupon/rental payment frequency; (m) Interest/profit/coupon/rental payment basis; (n) Details of security/collateral pledged, if applicable; (o) Details of guarantee/Kafalah*, if applicable; (p) Details on utilisation of proceeds:
(i) Purpose;
(ii) Amount to be utilised;
(iii) Details of conditions imposed on the utilisation; and (iv) If proceeds are to be utilised for project or capital expenditure, description of the project or capital expenditure, where applicable; (q) Sinking fund, if applicable;

(r) Details of designated account(s), if applicable, including- (i) names of account; (ii) parties responsible for opening the account; (iii) parties responsible for maintaining/operating the account; (iv) signatories to the account; (v) sources and utilisation of funds; and (vi) conditions for disbursements, if any; (s) Rating:
(i) Credit rating(s) assigned (state whether the rating is final or indicative). In the case of a debt or sukuk programme where the credit rating is not assigned for the full amount, disclosures set out in paragraph 5.04 of these Guidelines must be made; and (ii) Name of credit rating agency(ies); (t) Method of distribution (whether OTC or on the stock exchange); (u) Name of stock exchange or trading platform; (v) Mode of issue; (w) Clearing and settlement platform; (x) Other regulatory approvals required in relation to the corporate bonds or sukuk, and whether or not obtained; (y) Conditions precedent; (z) Representations and warranties; (aa) Events of defaults and enforcement events, where applicable, including recourse available to investors; (bb) Provisions on buy-back, if applicable; (cc) Provisions on early redemption, if applicable; (dd) Call option and details, if applicable; (ee) Put option and details, if applicable; (ff) Convertibility of issuance and details of the convertibility; (gg) Exchangeability of issuance and details of the exchangeability;

(hh) Governing laws;
(ii) Voting;
(jj) Permitted investments, if applicable; (kk) Ta’widh (compensation), if applicable*; (ll) Ibra’ , if applicable*; and (mm) Other terms and conditions.

PART 3: DECLARATION BY ISSUER
Notes:
^ : To delete if not applicable

: Applicable only to proposals by public listed companies

Date
Chairman
Securities Commission Malaysia
ISSUER …(Name of Issuer)…
Declaration for the proposed issuance of ….(Facility/Programme)… We, …(Name of Issuer)…. are proposing to undertake the following proposals:
(a) ………..
(b) ………..
(c) ………..
(hereinafter referred to as “the Proposal”).
2. We confirm that after having made all reasonable enquiries, and to the best of
our knowledge and belief, there is no false or misleading statement contained in, or material omission from, the information that is provided to the adviser(s)/expert(s) or to the Securities Commission Malaysia (SC) in relation to the above Proposal.
3. We declare that we are satisfied after having made all reasonable enquiries that
the Proposal is/will be^ in full compliance with the relevant requirements of the following, where applicable:
(a) Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors; (b) Trust Deeds Guidelines^; (c) Equity Guidelines*^;

(d) The requirements of any other regulatory authority with respect to the Proposal^; and (e) Other requirements under the Capital Markets and Services Act 2007.
4. Save as otherwise disclosed in the attachment accompanying this declaration^,
we have not been-
(a) convicted or charged with any offence under the securities laws, corporations laws or other laws involving fraud or dishonesty in a court of law, for the past 10 years prior to the submission/since incorporation (if less than 10 years)^; and (b) subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the submission#.
5. We declare the following in accordance with the Equity Guidelines#:
(a) The Proposal results/does not result^ in a significant change in the business direction or policy of the public listed company#; and (b) The Proposal is/is not^ a related-party transaction #.
6. We declare that we will ensure continuous compliance with the requirements and
conditions imposed by the SC in relation to the above Proposal and agree that we will continuously submit annual audited financial statements if the documents are required by the SC under the Capital Markets and Services Act 2007.
7. We undertake to provide all such information and documents as the SC may
require in relation to the Proposal.

The above Declaration has been signed by me as …(designation of authorised signatory)… of the Issuer under the authority granted to me by a resolution of....(the Board of Directors ).... on …(date of resolution)… Yours faithfully, ………………………. Signature Name - Name of Issuer - Date -

APPENDIX 2
POST-ISSUANCE NOTICE FOR CORPORATE BONDS OR SUKUK Notes:

Applicable only for sukuk
1.01 The principal adviser(s) must submit the following information and
documents to the SC via DS@seccom.com.my within seven business days from date of issuance:
(a) Date, size and tenure of issue; and
(b) Soft copy of the following documents (clean version in ‘PDF’ format):
(i) Information memorandum, where applicable; (ii) Global MTN or Islamic MTN base prospectus, where applicable, if the information memorandum or offering circular is to be read together with the base prospectus; (iii) Executed trust deed, where applicable; and (iv) Principal terms and conditions in the following format:

Font - Arial
Font size - 11
Margins (Top, Down, Right, Left) - 1.25”
Spacing - single
1.02 The principal adviser(s) must also submit a hard copy of the following information
and documents to the SC within seven business days from date of issuance:
(a) Issue date;
(b) Maturity date;
(c) Issue amount (nominal value);
(d) Issue price (cash raised);

(e) Interest/coupon/profit/rental rate;
(f) Yield-to-maturity;
(g) Mode of issue;
(h) List of subscribers/successful tender panel members and amounts subscribed; (i) Utilisation of proceeds raised from the issue:
(i) Purpose;
(ii) Amount utilised;
(iii) Details of condition imposed on the utilisation, including conditions imposed by the SAC, if any; and (iv) Confirmation from the Shariah adviser that the conditions imposed on the utilisation are/will be met*; (j) Clearing and settlement platform; (k) A copy of the rating report; (l) A certified true copy of the executed trust deed, where applicable; and (m) Names of all parties involved in the lifecycle of the corporate bonds or sukuk and their roles and responsibilities.
1.03 Confirmation from the principal adviser(s) that–
(a) designated accounts, if any, have been opened, the authorised signatories are signatories of the respective accounts and the accounts are administered according to the terms; (b) prospective investors and relevant parties have been informed of any instance where a conflict of interest situation may arise together with the relevant mitigating measures, including the agreement from the Board of Directors of the issuer to proceed with such arrangements; (c) the principal adviser(s) have notified the SC of any variation to or substitution/replacement of the underlying assets and confirmed to the SC that the Shariah adviser has given its approval for the variation or the substitution/replacement*;

(d) the principal adviser(s) have undertaken the necessary internal measures that prior to each issuance/drawdown under the proposed sukuk programme, the issuance/drawdown is in full compliance with Shariah principles*; and (e) all other conditions of approval that has been/may be imposed by the SC has been/will be complied with.
1.04 Confirmation from the Shariah adviser dated not later than three business days
from the issue date of the sukuk that*-
(a) all documentation for the sukuk issuance have been vetted; (b) all documentation for the sukuk issuance have been executed in proper sequence; and (c) all documentation comply with Shariah requirements.

APPENDIX 3
INFORMATION AND DOCUMENTS TO BE SUBMITTED TO THE SC FOR POSTISSUANCE REVISION Notes:

Applicable only for sukuk
1.01 A notification letter to the SC on the revision which includes the following:
(a) Rationale for each revision;
(b) Confirmation that the relevant requirements (as set out in Chapter 13 of these Guidelines) have been duly complied with by the issuer; and (c) Details of the contact person of the principal adviser including name, telephone number and e-mail address.
1.02 A marked-up version copy of the revised principal terms and conditions.
1.03 A copy of the written consent from the relevant parties in relation to the revision,
if applicable.
1.04 The following documents, where applicable:
(a) Supplementary prospectus;
(b) Supplementary base prospectus;
(c) Supplementary information memorandum; (d) Supplementary offering circular; (e) Executed supplementary trust deed; (f) Copy of letter issued by SC in relation to the endorsement by the SAC*; (g) Shariah pronouncement*; and (h) Other disclosure documents.
1.05 Any other material information in relation to the revision.

1.06 A soft copy (clean version in ‘PDF’ format) of the following documents to be
e-mailed to DS@seccom.com.my:
(a) Revised principal terms and conditions in the following format:

Font - Arial
Font size - 11
Margins (Top, Down, Right, Left) - 1.25”
Spacing - single
(b) Where applicable, the supplementary prospectus, supplementary base prospectus, supplementary information memorandum, supplementary offering circular, executed supplementary trust deed, copy of letter issued by SC in relation to the endorsement by the SAC, Shariah pronouncement and other disclosure documents.

APPENDIX 4
DOCUMENTS AND INFORMATION TO BE SUBMITTED TO THE SC FOR APPROVAL TO UPSIZE A DEBT OR SUKUK PROGRAMME Notes:

Applicable only for sukuk
1.01 The principal adviser must submit two (2) hard copies and one (1) soft copy
(in accordance with Appendix 5) of the following information and documents:
(a) An application letter which includes the following:
(i) Background information on the issuer; (ii) Current amount of corporate bonds or sukuk outstanding under the programme; (iii) Justification for the proposed upsizing; (iv) Proposed new issuance limit under the programme; (v) Proposed utilisation of proceeds; (vi) Confirmation that the option to upsize was disclosed in the initial application or confirmation that consent from all relevant parties (to disclose identity of relevant parties) have approved the proposed upsizing of the programme; (vii) Any conflict-of-interest situations and appropriate mitigating measures; (viii) Any other material information in relation to the proposed upsizing; and (ix) Name, telephone number and email address of the officer-incharge for the proposed upsizing of the programme; (b) Copies of approval letters from all other relevant regulatory authorities, if applicable;

(c) Confirmation from the Shariah adviser that the proposed upsize has no Shariah implication*; (d) Declaration by issuer (as per Part 3 of Appendix 1); and (e) Latest audited financial statements of the issuer.

APPENDIX 5
ELECTRONIC SUBMISSION
1.01 All correspondences to be submitted to the SC (except e-mails) must be
accompanied by electronic copy in text-searchable ‘PDF’ format file in the following manner, unless otherwise stated in these Guidelines:
(a) All signed correspondences (including appendices), such as cover letters, declarations, reports, etc., must be scanned with OCR (optical character recognition) and saved as PDF-text files; and (b) The PDF-text files can be submitted to the SC via a CD or e-mail (up to 10 MB in size per e-mail). The e-mail address is bondsubmission@seccom.com.my. Please indicate in the cover letter on how the PDF-text files are to be submitted concurrently, as well as the particulars of the e-mail if relevant (i.e. sender, subject, date and time sent). The electronic copy of the main applications, including the prospectus and supporting documents, must be submitted in text-searchable ‘PDF’ format. Please ensure that the PDF-text files must be in a readable and proper condition.

APPENDIX 6
INFORMATION AND DOCUMENTS TO BE SUBMITTED TO THE SC FOR REVISION TO TERMS AND CONDITIONS OF SUKUK
1.01 A cover letter describing the details of the revised transaction and structure
diagram (where applicable) of the sukuk to be addressed to:
Chairman
Securities Commission Malaysia
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
(Attention: Development and Islamic Markets)
1.02 Shariah pronouncement (including detailed reasoning/justification) where the
signing procedures must comply with the requirements as specified by the SAC.
1.03 Marked-up version of the revised principal terms and conditions of the sukuk.
1.04 Any other supporting documents or information as may be required by the SC.
1.05 All hardcopies of the above documents must be submitted to the SC accompanied
by electronic copy in the following manner:
(a) Documents must be in a text searchable Portable Document Format (PDF); (b) The PDF-text files must be in a readable and proper condition; and (c) Submitted via e-mail (up to 10 MB in size per e-mail) to the following e-mail address: ICMsubmission@seccom.com.my.

APPENDIX 7
APPROVED SHARIAH PRINCIPLES AND CONCEPTS FOR SUKUK The following are approved Shariah principles and concepts for sukuk:
A. Primary principles
 Bai bithaman ajil (BBA) (Deferred-payment sale) A contract that refers to the sale and purchase of assets on a deferred and instalment basis with pre-agreed payment period.  Bai ‘inah (Sale with immediate repurchase) A contract which involves the sale and buy back transaction of an asset by a seller. A seller will sell the asset to a buyer on a cash basis. The seller will immediately buy back the same asset on a deferred payment basis at a price that is higher than the cash price. It could also be applied when a seller sells the asset to a buyer on a deferred basis. The seller will later buy back the same asset on a cash basis at a price which is lower than the deferred price.  Bai istijrar (Supply sale) A contract between a client and a supplier, whereby the supplier agrees to supply a particular product on an ongoing basis, for example monthly, at an agreed price and on the basis of an agreed mode of payment.  Bai salam (Advance purchase) A sale and purchase contract whereby the payment is made in cash at the point of contract but the delivery of the asset purchased will be deferred to a pre-determined date.  Bai` wafa’ (Sale and repurchase) A contract with the condition that when the seller pays back the price of goods sold, the buyer returns the goods to the seller.  Ijarah (Leasing) A contract whereby a lessor (owner) leases out an asset to a lessee at an agreed lease rental for a predetermined lease period. The ownership of the leased asset shall always remain with the lessor.

 Ijarah thumma bai (Lease to purchase) A contract which begins with an Ijarah contract for the purpose of renting out a lessor’s asset to a lessee. Consequently, at the end of the lease period, the lessee will purchase the asset at an agreed price from the lessor by executing a purchase contract.  Istisna (Purchase order) A purchase order contract where a buyer requires a seller or a contractor to deliver or construct the asset to be completed in the future according to the specifications given in the sale and purchase contract. The payment term can be as agreed by both parties in the contract.  Mudharabah (Profit sharing) A contract made between two parties to enter into a business venture. The parties consist of the rabb al-mal (capital provider) who shall contribute capital to finance the venture, and the mudharib (entrepreneur) who will manage the venture. If the venture is profitable, the profit will be distributed based on a pre-agreed ratio. In the event of a business loss, the loss shall be borne solely by the rabb al-mal, unless the loss is due to the negligence or mismanagement of the mudharib in managing the venture.  Murabahah (Cost-plus sale) A contract that refers to the sale and purchase of assets whereby the cost and profit margin (mark-up) are made known.  Musawamah (Negotiated sale) A contract that refers to the sale and purchase of asset where the selling price of the asset is negotiated between the seller and the buyer, with the cost price not being disclosed or made known to the latter.  Musharakah (Profit and loss sharing) A partnership arrangement between two or more parties to finance a business venture whereby all parties contribute capital either in the form of cash or in kind for the purpose of financing the said venture. Any profit derived from the venture will be distributed based on a preagreed profit sharing ratio, but a loss will be shared on the basis of capital contribution.

 Qardh hasan (Benevolent loan)
A contract of loan between two parties on the basis of social welfare or to fulfil a short-term financial need of the borrower. The amount of repayment must be equivalent to the amount borrowed. It is however legitimate for a borrower to pay more than the amount borrowed as long as it is not stated or agreed at the point of contract.  Tawarruq (Tripartite sale) Purchasing a commodity on a deferred price and then selling it to a third party for cash.  Wakalah (Agency) A contract where a party authorises another party to act on behalf of the former based on the agreed terms and conditions as long as he is alive.

B. Supplementary principles and concepts
 Bai dayn (Debt trading) A transaction that involves the sale and purchase of debt.  Bai muzayadah (Open-bidding trading)
An action by a person to sell his asset in the open market through a bidding process among potential buyers. The asset for sale will be awarded to the person who has offered the highest bid/price. This is also known as the sale and purchase transaction based on tender.  Kafalah (Guarantee) A contract of guarantee whereby a guarantor underwrites any claim and obligation that should be fulfilled by an owner of the asset. This concept is also applicable to a guarantee provided on a debt transaction in the event a debtor fails to fulfil his debt obligation.  Haq tamalluk (Ownership right) An asset in the form of ownership rights as classified by Shariah which are tradable.  Hibah (Gift) A gift awarded to a person on voluntary basis.  Hiwalah (Transfer of debt) A contract that allows a debtor to transfer his debt obligation to a third party.  Ibra’ (Release of rights) An act of releasing absolutely or conditionally one’s rights and claims on any obligation against another party which would result in the latter being discharged of his/its obligations or liabilities towards the former. The release may be either partially or in full.  Ju`alah (Reward) Contract of reward; a unilateral contract promising a reward for a specific act or accomplishment.

 Rahn (Collateral)
An act whereby a valuable asset is made as collateral for a debt. The collateral will be utilised to settle the debt when a debtor is in default.  Tanazul (Waiver of rights) Waiver of right by one party to another party in musharakah, mudharabah and wakalah bi al-istithmar contracts where the right waived is transferred to other party.  Ujrah (Fee) A financial fee for the utilisation of services or manfa`ah (usufruct). In the context of today’s economy, it can be in the form of salary, allowance, commission and any other permissible form of assets.  Wadiah yad amanah (Safekeeping based on trust) Goods or deposits kept with a custodian (who is not the owner) for safekeeping based on trust. The custodian is not allowed to use the deposits nor entitled to any share of the profits.  Wadiah yad dhamanah (Safekeeping with guarantee) Goods or deposits kept with a custodian (who is not the owner) for safekeeping. When the custodian utilises the deposits, the custodian guarantees the repayment of the whole amount of the deposits or any part of it, when demanded. In this case, the rule of qardh shall apply and the depositors are not entitled to any return on the deposits. However, the custodian may provide rewards to the depositors as a token of appreciation in the form of hibah.

Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors

: Applicable only to proposals by public listed companies

Lineage: No known changes

Similar documents from other regulators