After establishing the initial structure of its Islamic Financial System, Malaysia instituted several more developments, which has allowed it to emerge as one of the most well-known countries in the world with an established and reputable Islamic Banking Establishment.
In 1984, the Malaysian Parliament passed the Takaful Act to allow the setting up of Takaful companies in Malaysia.
Furthermore, an Islamic Capital Market was developed, which comprises an equity market, government securities, and a corporate bond market (private debt securities). ‘The Islamic capital market, similar to the conventional capital market, refers to the market in longer term financial assets, comprising all public and private debt instruments with various maturities, corporate stocks, and shares for which there are no fixed maturity periods, and commodity futures, issued, managed and traded based on Islamic principles.’
Malaysia also developed an Islamic equity market. ‘The Islamic equity market is characterized by the absence of interest…
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