TH investment arm to come under SC regulation
BANGI: Lembaga Tabung Haji (TH) plans to place its investment arm under the supervision of the Securities Commission Malaysia (SC) as part of changes to its regulatory framework.
Lembaga Tabung Haji (TH) intends to place its investment arm under the oversight of the Securities Commission Malaysia (SC) as part of revisions to its regulatory structure. TH's chairperson, Tan Sri Abdul Rashid Hussain, announced this proposal after thorough discussions within a joint task force comprising SC chairman, Datuk Mohammad Faiz Azmi, and Bank Negara Malaysia (BNM) governor, Datuk Seri Abdul Rasheed Ghaffour.
Following a six-month review, TH concluded that regulation by the SC would be more suitable. However, BNM will retain involvement in overseeing the financial institution's overall stability and liquidity management. The main reason for selecting the SC as the primary regulator is that around 90-95% of TH's assets are invested in the capital market.
The SC's regulatory jurisdiction aligns with TH's core portfolio structure, which is heavily reliant on capital market investments. Liquidity will continue to be regulated by BNM, acting as a secondary buffer to address potential crises or liquidity shortages resulting from sudden depositor confidence loss. TH's investment arm will undergo regulatory oversight to ensure higher safety standards for depositors.
To establish the new regulatory framework, TH must submit proposed amendments to the Tabung Haji Act, which will involve several stages, including submission to the minister, cabinet approval, drafting by the Attorney-General's Chambers, and eventual tabling.
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