KUALA LUMPUR (March 9): The Securities Commission (SC) is seeking to broaden the scope of the country’s fast-growing Islamic capital market by moving beyond traditional shariah compliance, and towards delivering meaningful society impact.
This is in line with the growing adoption of the broader principles of Maqasid al-Shariah — the higher objectives of Islamic law — across financial products and market practices, ensuring that Islamic finance contributes meaningfully to issues such as climate change, social equity and sustainable development.
According to the SC’s fourth Capital Market Masterplan 2026-2030 (CMP4) launched on Monday, capacity-building initiative will be developed to equip shariah advisers and industry practitioners with the necessary knowledge to understand, apply and operationalise the principles outlined in the Maqasid al-Shariah Guidance.
“In today’s evolving landscape, it is no longer sufficient for Islamic capital market participants to focus solely on shariah compliance, as there is a growing need to align with the broader principles of Maqasid al-Shariah to ensure that financial activities deliver meaningful impact to society,” it said.
Back in 2023, the SC had introduced the Maqasid al-Shariah Guidance for the Islamic Capital Market Malaysia, outlining six key aspirations: humanity; justice and benevolence; clarity and transparency; flexibility and innovation; fiduciary responsibility and accountability; and accessibility and inclusivity.
These principles are intended to guide product design, governance practices and investment strategies across the Islamic finance ecosystem.
Greater adoption of Maqasid al-Shariah principles could help position Malaysia as a global hub for “innovative, ethics-driven Islamic finance”, reinforcing the country’s competitive advantage in the sector, the SC noted.
Malaysia has been at the forefront of product innovation in Islamic finance. In December 2024, it launched the world’s first waqf exchange-traded fund, and it continues to explore new instruments that incorporate charitable endowment elements into investment structures.
Such initiatives aim to align Islamic finance with broader sustainability and social finance objectives while expanding the range of investment opportunities available to global investors.
Malaysia’s Islamic capital market grew to RM2.7 trillion by the end of 2025, from RM2.2 trillion in 2020, with shariah-compliant equities accounting for RM1.3 trillion and sukuk outstanding totaling RM1.4 trillion. This represents 64% of Malaysia’s total capital market size of RM4.3 trillion.
Globally, Malaysia remains the leader in the sukuk market, accounting for about 36% of global sukuk issuance as of end-2024.
The country also topped the Islamic Finance Development Indicator rankings for the 13th consecutive year in 2025, ahead of Saudi Arabia, the United Arab Emirates and Indonesia.
Click here for all you need to know about the Capital Market Masterplan 2026-2030.