Investment Account Platform

The Investment Account Platform (IAP) launched by Bank Negara Malaysia on 17 February 2016 is a multi-bank platform that facilitates chanelling of funds from investors to finance viable ventures. Funds mobilised via IAP are intermediated by participating Islamic banks through investment account (IA) products.

IAP allows investors to view and choose from a wide range of ventures sponsored by different Islamic banks for the investors to invest in. With IAP in place, several key functions of Islamic banks in managing IA are embedded within its system, thus enabling IA products to be delivered in an efficient and seamless manner.

Further details on IAP can be found at www.iaplatform.com.

Please click here to view how IAP works

Sponsoring Banks (SBs)
Investors (Sources of fund)
Channel funds to ventures of their choice
Islamic Banks
Provide financing
Ventures (Users of fund)
  • Individual, corporate
    Institutional investors
  • Islamic Banks
  • Institutions (to support target industries)
Strong roles played by banks, in line with their fiduciary duty
  • Due-diligence
  • Performance monitoring
  • Suitability assessment
  • Investment management
  • Target ventures include those businesses with viable projects, and new growth industries
Obtain
Information
Choose
Investment
Raise
Funding
Promote &
Advertise
Key Features of IAP
  • An avenue for Shariah-compliant investment and financing
  • Transactions regulated by the Islamic Financial Services Act 2013 (IFSA) and Development Financial Institutions Act 2002 (DFIA)
  • Credit assessment and screening on the listed ventures by participating Islamic banks
  • Ratings on the listed ventures by a reputable rating agency
  • Compliance to disclosure standard on ventures facilitate investors’ informed decision making
  • User friendly and easily accessible anywhere, anytime
  • Open to different types of business and ventures of varying size and industries

IA is a recent product offering by Islamic banks that provides investors with an opportunity to directly invest and share the profits from Shariah-compliant investment activities. Islamic banks undertake significant roles in IA transactions in intermediating funds from investors.

Please click here to view how IAP works

1. Acceptance of funds 2. Application of funds

Individual & institutional investors
Investors place funds in islamic banks under IA
Ventures
Islamic banks channel IA to finance ventures

3. Continuous roles

Conduct regular monitoring
Report performance to investors
Distribute profit to investors at pre-agreed terms
Identify exit mechanism and perform recovery, if required
Key Features of IAP
  • An avenue for Shariah-compliant investment and financing
  • Transactions regulated by the Islamic Financial Services Act 2013 (IFSA) and Development Financial Institutions Act 2002 (DFIA)
  • Credit assessment and screening on the listed ventures by participating Islamic banks
  • Ratings on the listed ventures by a reputable rating agency
  • Compliance to disclosure standard on ventures facilitate investors’ informed decision making
  • User friendly and easily accessible anywhere, anytime
  • Open to different types of business and ventures of varying size and industries
  • Potential high returns: Under IA, returns to investors are based on performance of the underlying ventures that they choose to invest in. Possible upside returns may be generated from the profit of debt-based financing under a broader set of credit criteria and more efficient capital and liquidity management strategies of Islamic banks in offering equity-based financing structures.
  • Bank-intermediated: Islamic banks undertake significant roles in intermediating investors’ funds including filtering of viable ventures, conducting suitability assessment on individual investors and continuous performance monitoring of underlying ventures.
  • Independent rating on ventures: Performed by a professional rating agency with extensive experience in rating of financial instruments, facilitating informed decision making by investors.
  • Broader choices: Investors can filter the ventures listed based on their desired criteria. This is especially useful to investors with specific investment mandates.
  • User friendly: IAP is a platform that is accessible anywhere, anytime, with some processes conducted online.

1 Register as an IAP user www.iaplatform

2View and Select venture

3 Undertake suitability assessment

4

Islamic bank to facilitate payment of the investment

5

Islamic bank to create Investment Accountfor investors

6

Recieve periodical reporton venture

7

Recieve profit and principal

  • What does credit rating mean? Credit rating reflects opinions on the capacity and willingness of a venture to meet the payment of capital and expected returns on a full and timely basis from the perspective of the rating agency.
    While credit ratings can be used as a reference to gauge an appropriate level of returns considering the risks involved, it is not a recommendation to buy, sell or hold investment, and does not signify any measure to define good or bad ventures.
  • Why is credit rating necessary? Before ventures are listed on IAP, they will be independently reviewed and assigned a credit rating by a professional rating agency. This credit rating is to assist potential investors in making informed investment decisions. For institutional investors, a credit rating is useful in monitoring compliance with their respective internal risk limitations.
A Success Story – Completed Deal
PROJECT TRANSIT
  • Project Transit was the first venture listed on the Investment Account Platform
  • The investment in Project Transit are utilised for funding of a Term Financing (Tawarruq) facility to Perak Transit Berhad, an integrated transportation terminal and public transportation services provider
  • BMMB acted as the Sponsoring Bank and Underwriter for the Investment
  • Investment was fully subscribed by investors due to its’ competitive returns averaging of >6.0%
  • As of to date, the investors promptly received their quarterly payments on principal and profit
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