Wan A Rahim Kamil ICM Consultant, Securities Commission Malaysia

Shari’ah Funds Shari'ah Funds are A group of specialised collective investment funds which offer investors the opportunity to invest their surplus cash in a diversified portfolio of securities that are managed and selected by professional portfolio managers in accordance to Shari'ah principles

Fund Trust Deed UNITHOLDERS Invest in Unit Trusts UNITHOLDERS Invest in Unit Trusts TRUSTEE Custodian of the Assets TRUSTEE Custodian of the Assets MANAGER Administers the operation of the Fund MANAGER Administers the operation of the Fund Invest in Shariah Approved Investments Shari’ah Committee Structure of Typical Islamic Unit Trust

Investments A Shari’ah fund is allowed to invest in - listed securities - unlisted securities - foreign securities - other collective investment schemes - futures contracts - liquid assets provided the above are approved by its Shari’ah committee or SC’s SAC

Approval of Shari’ah fund The establishment of a Shari'ah trust fund requires similar approval process and compliance as outlined in The Guidelines on Unit Trust Funds The investments of the fund must be adequately disclosed in the prospectus and annual report of the fund / scheme Additional requirements for Islamic Unit Trust The Guidelines on Unit Trust Funds require that any fund, expressed to be managed in accordance with the Shari’ah principles, to appoint a Shari’ah committee: Consisting of not less than three members who are individuals The appointment of a member of the Shari'ah committee must be approved by the SC Subject to the SC’s approval, the fund may alternatively appoint a Shari’ah consultant

Criteria imposed on members of Shari'ah Committee Members of the Shari'ah committee of the fund must Be of a good repute and character; and Possess the necessary qualifications, expertise and experience (particularly in fiqh muamalah) to perform their duties and responsibilities in a fit and proper manner

Roles, Power and Duties Role, power and duties of Shari'ah committee / Shari'ah consultant include: Ensuring the fund is managed and administered in accordance with Shari'ah principles Providing expertise and guidance for the fund in all matters relating to Shari'ah, including on the fund’s trust deed and prospectus, its structure and investment, and other operational and administrative matters Consulting the SC’s SAC in cases of ambiguity or uncertainty as to investment, instrument, system, procedure and/or processes Ensuring compliance with any guidelines, ruling or decision made by SC or SC’s SAC Carrying out duties and responsibilities with due care, skill and diligence