Summary of Key Amendments to Guidelines on Islamic Fund Management Issued on 18 May 2020

The following table provides a summary of key amendments to the Guidelines on Islamic Fund Management which was revised on 18 May 2020 A. General amendments (i) Introduction of specific sections into the Guidelines. (ii) Re-number the paragraphs of the Guidelines. (iii) Update the definition sections to be consistent with other guidelines. (iv) Reference to “Islamic fund manager” and “fund manager” is amended to “Islamic fund management company” and “fund management company”, respectively. (v) Editorial amendments including ensuring consistency in the terminology used. (vi) Consequential amendments pursuant to Companies Act 2016.
SECTION A : GENERAL REQUIREMENTS
Chapter 1: INTRODUCTION
Paragraph 1.02 Amended Paragraph 1.02 This paragraph has been amended to clarify that the Guidelines is applicable to an Islamic fund management company and a fund management company that carries on an Islamic fund management business under an Islamic “window”. Paragraph 1.03 Amended Paragraph 1.03 This paragraph has been amended to set out the mandate given to the SC to specify qualifying conditions that must

be fulfilled by a fund management company for the purposes of tax exemption on its statutory income derived from a business of providing fund management services of an Islamic fund. Paragraph 1.04 Amended paragraph 1.04 This paragraph has been amended to clarify that the Guidelines are divided into three (3) sections i.e. Section A,
Section B and Section C.
Paragraph 1.05 Amended Paragraph 1.05 This paragraph has been amended to clarify that Section B of the Guidelines is not applicable to a trustee-manager of a business trust and a fund management company of a real estate investment trust.

• New Paragraph 1.06 This paragraph has been re-numbered.
• New Paragraph 1.07 This paragraph has been amended to clarify that the
  Guidelines must be read together with other relevant securities laws and other relevant guidelines issued by the SC.
• New Paragraph 1.08 This paragraph has been inserted to clarify that this
  Guidelines are in addition and not in derogation of any other guidelines issued by the SC.
• New Paragraph 1.09 This paragraph has been inserted to allow for exemption or
  variation of requirement under certain circumstances.

Chapter 2: DEFINITIONS
Paragraph 2.0 Amended Paragraph 2.01  Amended the definitions of “compliance officer”, “fund management”, “Islamic bank” and “Islamic banking business” to be consistent with other guidelines and applicable laws.  Amended the definition of “Islamic fund manager” to be consistent with the reference use throughout the Guidelines.  Amended the definitions of “Islamic fund management company” and “Islamic “window”” for purposes of clarity.  Deleted the definitions of “recognised stock exchanges”, “Shariah adviser” and “Shariah Advisory Council”.  Introduced new definitions of “CMSA”, “CMSL”, “Islamic fund” and “SAC”.

SECTION B : REQUIREMENTS FOR ISLAMIC FUND MANAGEMENT
Chapter 3: CONSTITUTION
Paragraph 3.0 Amended Paragraph 3.01 This paragraph has been amended to be consistent with the term used in the Companies Act 2016.
Chapter 7: PORTFOLIO MANAGEMENT
Paragraph 7.01(d) Amended Paragraph 7.01(d) This paragraph has been amended to ensure consistency on the term referred in the Guidelines and to clarify on the investment made on an exchange outside Malaysia. Paragraph 7.02(b) Paragraph 7.02(b) This paragraph has been amended to clarify that the Islamic fund management company is allowed to maintain its accounts in other licensed financial institutions approved by Bank Negara Malaysia.
Chapter 11: FUND MANAGEMENT BUSINESS VIA ISLAMIC “WINDOW”
Paragraph 11.02 Amended Paragraph 11.02 This paragraph has been amended to clarify that a fund management company that carries on a fund management business under an Islamic “window” must segregate its accounts from its conventional fund management business.

SECTION C: REQUIREMENTS FOR CERTIFICATION OF ISLAMIC FUND
Chapter 12: CERTIFICATION OF ISLAMIC FUND IN RESPECT OF TAX EXEMPTION

• New Paragraph 12.01 This paragraph has been inserted to set out the purpose of
  this chapter.

• New Paragraph 12.02 This paragraph has been inserted to state the criteria that
  a fund management company must fulfil for the purposes of the tax exemption.

• New Paragraph 12.03 This paragraph has been inserted to state the qualifying
  conditions that a fund management company must comply in order to conduct a substantive fund management activity in Malaysia.
  Chapter 13: APPLICATION

• New Paragraph 13.01 This paragraph has been inserted to clarify to whom the
  application should be addressed to.

• New Paragraph 13.02 This paragraph has been inserted to clarify the non￾applicability of the requirements under Section B(A)(i) and
  (B) of Appendix 4 to certain type of funds.

• New Paragraph 13.03 This paragraph has been inserted to clarify the requirement
  and manner to submit an electronic copy of the application via email.
  APPENDIX 3: TAX EXEMPTION ORDERS

• New Appendix 3 New Appendix 3 has been inserted to provide for the tax
  exemption orders that are available for the Islamic fund management industry.
  APPENDIX 4: DOCUMENTS TO BE SUBMITTED FOR CERTIFICATION OF ISLAMIC FUND IN RESPECT OF TAX EXEMPTION FOR
  THE ISLAMIC FUND MANAGEMENT INDUSTRY

• New Appendix 4 New Appendix 4 has been inserted to provide the
  application form, list of documents to be submitted and declaration by the applicant. FREQUENTLY ASKED QUESTIONS Frequently Asked Questions - The Frequently Asked Questions in the Guidelines have been deleted and will be uploaded on the SC’s website.