The Islamic Financial Market Subcommittee (IFMC) held a roundtable to discuss developments and initiatives for the Islamic Financial Market on 15 October 2025 at Lanai Kijang, Bank Negara Malaysia. The event also saw the industry signing the Sale and Buy Back Agreement (SBBA) and Tahawwut Master Agreement (TMA). The roundtable was held in conjunction with the Global Islamic Finance Forum (GIFF) 2025.

The industry-led roundtable featured an exchange of insights and strategies in building a forward-looking and comprehensive Islamic finance ecosystem, including:

1. Broadening the sukuk investor base beyond traditional segments, among others through improved visibility of Malaysian Government Investment Issue (MGII) and collective efforts to promote foreign investor participation in the domestic market. This includes the introduction of MGII structured under Wakalah bi al-Khadamat to accommodate more diverse investor requirements and Shariah interpretations. Among the proposals raised by the industry is to price corporate sukuk over MGII rather than MGS to further enhance the development of Islamic finance ecosystem. The industry also suggested for the issuance of government guaranteed corporate sukuk on the Fully Automated System for Issuing/Tendering (FAST) to encourage transparency in the bidding and allocation process.

2. Building a future-oriented market infrastructure conducive to innovation. The mandatory transition to the Malaysia Islamic Overnight Rate (MYOR-i) by 1 July 2027 was discussed as a bold step toward establishing a comprehensive Islamic financial market, supported by robust transaction-based benchmark rates that reflect actual market activity and alignment with global standards. A comprehensive transition roadmap is expected to be issued by Bank Negara Malaysia (BNM) within the quarter. Moving forward, proactive steps must be taken by industry players on product development and system enhancements, increasing participation in the interbank market to source funding efficiently, and diversifying Islamic finance offerings. Efforts should also be taken to remove barriers in trading Islamic hedging tools to strengthen market resilience and effective risk management.

3. Advancing Islamic repo instruments to deepen market liquidity, with emphasis on the roles of the Islamic Interbank Money Market (IIMM) which is instrumental in facilitating short-term funding and interbank liquidity management.

The event was attended by representatives from a diverse range of Islamic banking and investment institutions, who actively contributed and enriched the discourse with practical and strategic viewpoints.  

BNM Deputy Governor Adnan Zaylani Mohamad Zahid in delivering his welcoming remarks said, “Islamic financial market participants need to continue innovating. There are emerging opportunities to be explored such as Sustainable and Responsible Investment (SRI) finance, waqf-based instruments and asset tokenisation to mobilise philanthropic capital. In this journey, it is worth reminding that it is not the intent of Islamic finance to replace debt-based instruments but rather to innovate and expand the offerings to include risk-sharing instruments and blended finance which could be beneficial for our new growth areas”  

IFMC Chairman Hanif Ghulam Mohammed in his remark said, “The roundtable highlights the industry’s collective resolve to shape a future-ready Islamic financial market ecosystem. The agreements and conversations held today signal a steadfast dedication to fostering innovation, enhancing market resilience and global alignment. IFMC remains focused on translating these collaborative efforts into tangible outcomes that strengthen our market’s global standing.”

HSBC Amanah CEO, YM Raja Amir Shah, said, “The agreements signed today highlight the Malaysian Islamic finance sector’s ongoing emphasis on fostering the industry’s growth through innovative financial market solutions and frameworks. This will be crucial in supporting Malaysia's ambitions to become a global leader and international gateway for Islamic finance through alignment with global standards and promotion of Shariah standards convergence. Islamic banks continue to play a key role in enabling the advancement of the industry by connecting domestic and international investors with opportunities in the country’s Islamic financial market.”

In conjunction with the roundtable, the Islamic banking industry signed the Memorandum of Understanding on the Enhanced SBBA and the Memorandum of Understanding on Tahawwut Master Agreement (TMA). A second Cross Currency ESG SBBA agreement was also signed between RHB Bank Berhad, HSBC Amanah, Standard Chartered Saadiq and UOB Malaysia Berhad. The signing ceremonies signal commitment by Islamic banks to collaborate and establish bilateral agreements which could deepen interbank trading activity and thus providing further support for the Islamic financial market development.

The ceremonies were witnessed by BNM Deputy Governor, Adnan Zaylani Mohamad Zahid and Assistant Governor, Mohamad Ali Iqbal Abdul Khalid. The agreements underscore the shared commitment of IFMC and industry participants through the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) to effectively implement key market frameworks and uphold Malaysia’s leadership in Islamic financial market development.