KUALA LUMPUR – The Islamic capital market has potential growth in the social finance and impact investing avenues.
Datuk Zainal lzlan Zainal Abidin, deputy chief executive of the Securities Commission (SC), stated that there are possibilities to integrate impact assessments with Islamic social finance instruments that would allow investors to measure the impact of their investments on socio-economic development and the economic well-being.
He said that under the SC’s third Capital Market Masterplan, the regulator is also prioritising more technological adoption in the Islamic capital market.
During his keynote speech at the recent Islamic Finance News UK Forum held at the Mansion House, London, he added that further research will be conducted on the use of Maqasid al Shariah in the context of the Islamic capital market.
He explained that innovation must remain the centre of the Islamic capital market’s development strategy and that many stakeholders would need to work together more closely to drive its development through the next phase of expansion.
Despite the importance of product and service innovation, Zainal Izlan emphasised the importance of measures to improve capacity and knowledge, such as boosting understanding that the Islamic capital market has universal relevance and is not limited to a certain market niche.
“In this regard, with the large amount of funding that is needed globally to achieve the sustainable development goals, Islamic capital market may and should play a more major role, as capital can be mobilised more effectively, efficiently, and profitably,”
When speaking about fintech, he said that the SC has established an innovative ecosystem for the growth of financial innovations through a variety of initiatives.
He said that greater focus has been placed to improve access for financing and investor engagement through digital platforms such as equity crowdfunding, peer-to-peer financing, digital investment management, and digital asset exchanges.
“In an effort to promote the growth of Islamic fintech, the SC has collaborated with the United Nations Capital Development Fund (UNCDF) to launch FIKRA, the first regulator-led Islamic fintech accelerator for the Malaysian capital market,” he added.
FIKRA, which means ‘ideas,’ is a collaborative platform that connects innovative start-ups with the SC, UNCDF mentors, industry experts, and investors in order to develop a thriving and well-supported Islamic fintech ecosystem through the identification and scaling of innovative fintech solutions.
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