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Coupon-bearing, long-term bonds
- Malaysian Government Securities (MGS) MGS is coupon-bearing, long-term bonds issued by the Government to raise funds for development expenditures. They are the most actively traded bonds. The BNM regularly issues 3-year, 5-year, 7-year, and 10-year MGS as benchmark securities for the development of a benchmark yield curve.
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- A. Definition of Securities
- B. Types of Bonds, Notes, and Sukuk
- (c) Floating-Rate Bank Negara Monetary Notes
- 4. Corporate Bonds, Notes, and Sukuk (Private Debt Securities)
- (c) Islamic Medium-Term Notes (iMTN Note Programs)
- (f) Revolving Underwritten Facility and Revolving Underwritten Notes Issuance Facility
- C. Money Market Instruments
- Malaysian Treasury Bills and Malaysian Islamic Treasury Bills
- (b) Bank Negara Monetary Notes
- (f) Islamic Negotiable Instruments
- (g) Repurchase Agreements
- E. Methods of Issuing Bonds, Notes, and Sukuk (Primary Market)
- 1. Government Securities Offering
- (a) Competitive Auction by BNM
- 2. Corporate Bond, Note, and Sukuk Offering Methods
- (a) Tender Offers to Retail Investors
- (b) Book Building
- (c) Private Placement
- 3. Bond, Note, and Sukuk Issuance Procedure (via FAST)
- F. Governing Law and Jurisdiction (Bond, Note, and Sukuk Issuance)
- G. Language of Documentation and Disclosure Items
- H. Registration of Debt Securities and Sukuk
- I. Listing of Debt Securities and Sukuk
- 1. Exchange-Traded Bonds and Sukuk
- Step 1—Listing Application to Bursa Malaysia Securities
- Step 2—Listing Approval from Bursa Malaysia Securities
- 3. Other Listing Places
- J. Methods of Trading Bonds, Notes, and Sukuk (Secondary Market)
- 1. Over-the-Counter Market
- 2. Exchange-Traded Bonds and Sukuk
- 1. General Rule
- 3. Custodian Point of View
- 1. Issuers
- (a) Government
- (b) Corporate
- (c) Multilateral Development Banks
- 2. Investors
- 3. Parties Involved in Debt Securities and Sukuk Issuance
- (c) Underwriter(s)
- (d) Facility Agent
- (e) Paying Agent
- (g) Bond Trustee
- (h) Authorised Depository Institution(s) and Authorised Depository Agent(s)
- (i) Legal Adviser (Legal Counsel)
- (j) Accounting Firms
- O. Credit Rating Requirements
- Q. Market Features for Investor Protection
- 1. Investors Complaints
- 2. Retail Investors
- 3. Foreign Investors
- 5. Bond Trustee and Trust Deed
- 6. Prevention of Fraud
- 7. Ethics
- 3. Exemptions from Appointment of Bond Trustee and Trust Deed
The definition of securities in Malaysian is anchored in the CMSA and also referenced in other pertinent laws and regulations as detailed below.
The Malaysian bond market is very active for both conventional and Islamic bonds and notes, and features a large variety of issuance forms and formats, reflecting the needs of different issuer and investor types for both ringgit and foreign currencies. There is no specific definition in the CMSA or other laws for bonds relative to notes; instead, M...
Floating-Rate Bank Negara Monetary Notes (BNMNF) are instruments used for implementing monetary policy and to manage liquidity in the financial market. BNMNF issuance is conducted through competitive Dutch auction (uniform price, bids on spread) via Principal Dealers.
Bonds, notes, or sukuk issued by corporates in the private sector in Malaysia are generally collectively described as PDS, in contrast to government issuances, including in the SC’s guidelines and in the notices of other regulatory authorities. Issuers include Cagamas and may be listed or nonlisted Malaysian companies, including the local subsidiar...
Islamic MTN and iMTN programs principally function just like MTN and MTN programs but follow Islamic principles. Instead of interest, iMTN pay semiannual dividends, depending on the structure used.
When the notes issuance facility includes underwriting services, the arrangement takes the form of a revolving underwritten facility or a revolving underwritten notes issuance facility. In the event that the notes are undersubscribed, the underwriters are committed to take up the unsold portion at a predetermined rate.
Money market instruments are short(er)-term debt instruments issued by either the Government of Malaysia, BNM, or private sector. Money market instruments are generally limited to instruments with a maturity of less than 1 year. The money market instruments observed in the Malaysian capital market comprise both conventional and Islamic instruments,...
In addition to their nature as short-term government funding instruments, Treasury bills, both conventional and Islamic, may also be issued as practical instruments to absorb money market liquidity as part of BNM’s open market operations (for details, please refer to section B.1). MTB and MITB are also used as liquidity instruments by financial in...
Both conventional and Islamic BNMN may be issued and used as practical instruments to absorb or invest money market liquidity, either through BNM’s open market operations or in dealings between financial market participants (for details, please refer to see section B.2).
Islamic negotiable instruments of deposit are the Islamic money market equivalent of NID. Islamic Negotiable Instruments are structured under the concept of bai’ bithaman (deferred payment sale) for Negotiable Islamic Debt Certificates and the concept of mudharabah (profit-sharing) for Islamic Instruments of Deposits.
A repo is a contract to sell and, subsequently, repurchase securities at a specified date and price. It is also known as a buyback arrangement. Details on the Malaysian repo market and its practices are provided in Chapter IV.
There are a number of different methods to issue debt securities and sukuk in the Malaysian bond market for both government and private sector instruments.
Most MGS and other debt instruments issued by the Government of Malaysia and BNM are issued through the auction method. Auctions for government securities are conducted by BNM with the participants being Principal Dealers. Non-Principal Dealer market participants may submit their bids through a Principal Dealer. Investors are not able to participat...
BNM issues government bonds, notes, and sukuk on behalf of the government via competitive auction. MGS auctions are open to Principal Dealers only, while MGII auctions are open to both Principal Dealers and Islamic Principal Dealers. The tender basis would be yield (or price in case of reopenings) for conventional debt securities and profit rate fo...
Bonds, notes, and sukuk issued by other statutory bodies and government-owned corporations, as well as corporate debt securities and sukuk (PDS), can be issued via direct placement or tender. Direct placements are subject to an appropriate lodgement of issuance documentation and disclosure information with the SC. Tender offers of corporate debt se...
Tender offers of debt securities and sukuk in Malaysia are conducted via FAST (for details, please refer to section 3). The tender basis for government issuances would be yield (or price in case of reopenings) for conventional debt securities and profit rate for sukuk. Similarly, the tender basis for PDS would be yield (or price in case of reopenin...
Book building is a method used to achieve suitable price discovery and a realistic picture of the demand of investors for a particular bond, note, or sukuk issue or program. It is used only for corporate bonds since the possible investor universe is not limited to Principal Dealers and their account holders only. Usually, the issuer appoints a majo...
Private placement is not defined as a specific issuance type in Malaysian regulations with distinct features (as is the case in other markets); instead, private placement in Malaysia is simply an issuance method. In a private placement, a bond, note, or sukuk is issued or offered to a limited target group of investors. In Malaysia, private placemen...
FAST is the prescribed platform for the issuance and tendering of debt securities and sukuk in the Malaysian market. Auctions are also conducted using FAST facilities. FAST is directly connected to the settlement system RENTAS. The listing of debt securities and sukuk upon issuance is not covered by FAST. For details on the listing process, please ...
The governing law and jurisdiction for a bond, note, or sukuk issuance is of significance since potential issuers may consider issuing under the laws or jurisdiction of a country or market other than the place of issuance. The choice of governing law and the contractual preferences of stakeholders can affect the accessibility to a specific investor...
Contracts or agreements in the context of a bond, note, or sukuk issuance; the issuance documentation and disclosure items; and all applications, approvals, and correspondence with regulatory authorities and market institutions can be in English in Malaysia.
There is no concept of registration of debt securities or sukuk in the Malaysian market. The typical functions associated with a registration concept—such as provision of bond information, continuous disclosure, and the determination of a fair market price—are carried out by institutions that are mandated for such functions, including BNM through a...
A listing of debt securities or sukuk is possible in Malaysia for the purpose of quoting and trading (similar to equities) or for the purpose of profile listing (e.g., to achieve visibility or to reach out to a different or larger investor universe). The listing of a bond, note, or sukuk is not a regulatory requirement of the SC or BNM for either d...
ETBS are debt instruments and sukuk authorized to be quoted and traded on BMS’ main board. For that, the issuer or its agent needs to obtain approval under the BMS Main Market Listing Requirements. In Malaysia, only certain types of offered government and some corporate bonds or sukuk, which are offered to retail investors, are quoted and traded on...
In the event an issuer wishes to list its bonds, notes, or sukuk for profiling in Malaysia, BMS offers the Exempt Regime listing feature (for more details, please refer to Chapter I). Issuers already listed as entities on BMS, as well as nonlisted entities, may list bonds, notes, or sukuk under the BMS Exempt Regime. An issuer may submit an applic...
BMS will check the listing application, following the submission of the relevant information in documentation and disclosure items. BMS may, at its discretion, request from the issuer or Principal Adviser supplementary information, if so required. BMS is committed to provide a response to a listing application to the issuer or Principal Adviser wit...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
Exempted debentures or sukuk include, among others, issues by the government, BNM, and statutory boards, as well as issues or offers for sale or subscription to foreign investors or Sophisticated Investors only, or certain debentures or sukuk denominated in a foreign currency. The complete list of exemptions from the appointment of a bond trustee a...
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The Government of Malaysia (GOM) raises financing via the issuance of Malaysian Government Securities (MGS, conventional bond) and MGII (sukuk). As Malaysia promotes a dual banking system, the development of the MGII market aims at deepening the domestic sukuk market as well as strengthening Malaysia’s position as a leader in
MGS are long-term bonds issued by the Government of Malaysia for financing developmental expenditure. MGS are fixed-rate coupon bearing bonds with bullet repayment of principal upon maturity while coupon payments are made semi-annually.
MGII is a long-term coupon-bearing Government security based on Islamic principles to fund the Government’s developmental expenditure. MGII is issued through a competitive bidding auction by Bank Negara Malaysia on behalf of the Government.
Nov 1, 2021 · As Malaysia corporate bonds are priced using MGS as benchmark, the corporate bond yield curve also saw an upwards shift by IFAST RESEARCH / graphic by MZUKRI YIELDS on Malaysian Government Securities (MGS) have spiked to multi-year high on spill over from US treasuries.
5 days ago · Malaysia Government Bonds - Yields Curve. The Malaysia 10-Year Government Bond currently offers a yield of 3.988%. This yield reflects the return investors can expect if they hold the bond until maturity. Government bond yields are critical indicators of economic confidence and investor sentiment.
