MALAYSIA: The Shariah Advisory Council (SAC) of Bank Negara Malaysia (BNM) has approved new features for the Sell and Buy Back Agreement (SBBA) instrument, effective the 30th June 2025.
The approved features include the introduction of margining, profit reinvestment and profit transfer. Additionally, the substitution of assets feature allows for the acceleration of the second leg transaction upon a triggering event, followed by a new SBBA contract with the original maturity date. This ruling applies to licensed Islamic banks under the Islamic Financial Services Act, licensed banks and investment banks approved for Islamic banking under the Financial Services Act, and prescribed institutions under the Development Financial Institutions Act.
