Malaysia Independence Day

The struggle to search for independence began in 1511 and took more than 446 years. It ended with the declaration of national independence on 31st August 1957. On that day, YTM Tunku Abdul Rahman Putra Al-Haj poignantly read out the Proclamation of Independence of Malaya.

Transcript of YTM Tunku Abdul Rahman’s speech as follows:

Your Majesties, Your Royal Highnesses, Your Highnesses, Your Excellencies, People of Persekutuan Tanah Melayu.

I am indeed proud that on this, the greatest day in Malaya’s history it falls to my lot to proclaim the formal independence of this country. Today as new page is turned, and Malaya steps forward to take her rightful place as a free and independent partner in the great comity of nations – a new nation is born and though we fully realize that difficulties and problems lie ahead, we are confident that, with the blessing of God, these difficulties will be overcome and that today’s events, down the avenues of history, will be our inspiration and our guide. It is therefore with a feeling of particular solemnity that we have listened to the eloquent words of His Royal Highness and in particular to the moving message he has conveyed from Her Majesty the Queen. We are indeed honored that Her Majesty should have deputed her own uncle, His Royal Highness, to be with us on this occasion particularly when we remember that he is no stranger to this land: We recall too with pleasure his previous visit to Malaya and happy recollections of his stay have remained with us.

His Royal Highness has spoken in moving words of the past associations of our two countries. We in Malaya have a long history, but we do not lightly forget old relationships.

For many years past our fortunes have been linked with those of Great Britain and we recall in particular the comradeship of two world wars. We remember too the products of our association; justice before the law, the legacy of an efficient public service and the highest standard of living in Asia. We shall therefore always remember with gratitude the assistance which we have received from Great Britain down our long path to nationhood; an assistance which culminated today with the proclamation of Malaya’s independence.

But the long-standing friendship between our countries does not cease with independence: Rather it takes on a new form. As you have heard in the gracious message from Her Majesty the Queen, Malaya will henceforward take her place in the great Commonwealth of Independent Nations whose members are found in all parts of the world, and as an equal partner in that great association. We in this country will do all in our power to promote its well-being in the interests of mankind in general and in the particular service of world peace.

Thus today a new chapter opens in our relationship with Britain; our colonial status has given place to full equality but we are confident that, fortified by old associations, and linked by old memories, our ties with Britain will grow ever stronger and more durable.

British will ever find in us her best friend, and it is a source of much gratification to my government that British civil servants will continue to serve in this country to assist us in the solution of the many problems which independence will present.

But while we think of the past, we look forward in faith and hope to the future; from henceforth we are masters of our destiny, and the welfare of this beloved land is our own responsibility: Let no one think we have reached the end of the road: Independence is indeed a milestone, but it is only the threshold to high endeavor — the creation of a new and sovereign state. At this solemn moment therefore I call upon you all to dedicate yourselves to the service of the new Malaya: To work and strive with hand and brain to create a new nation, inspired by the ideals of justice and liberty — a beacon of light in a disturbed and distracted world.

High confidence has been reposed in us; let us unitedly face the challenge of the years.

And so with remembrance for the past, and with confidence in the future, under the providence of God, we shall succeed.

PROCLAMATION OF INDEPENDENCE: IN THE NAME OF GOD, THE COMPASSIONATE, THE MERCIFUL. PRAISE BE TO GOD, THE LORD OF THE UNIVERSE AND MAY THE BLESSINGS AND PEACE OF GOD UPON HIS messengers. Whereas the time has now arrived when the people of the Persekutuan Tanah Melayu will assume the status of a free independent and sovereign nation among the nations of the World.

AND WHEREAS by an agreement styled the Federation of Malaya Agreement, 1957, between Her Majesty the Queen and Their Highness the Rulers of the Malay states it was agreed that the Malay states of lohore, Pahang, Negeri Sembilan, Selangor, Kedah, Perlis, Kelantan, Trengganu and Perak and the former Settlements of Malacca and Penang should as from the 31st day of August, 1957, be formed into a new Federation of States by the name of Persekutuan Tanah Melayu.

AND WHEREAS it was further agreed between the parties to the said agreement that the Settlements of Malacca and Penang aforesaid should as from the said date cease to form part of Her Majesty’s dominions and that Her Majesty should cease to exercise any sovereignty over them.

AND WHEREAS it was further agreed by the parties aforesaid that the Federation of Malaya Agreement, 1948, and all other agreements subsisting between Her Majesty the Queen and Their Highness the Rulers or anyone of them immediately before the said date should be revoked as from that date and that all powers and jurisdiction of Her Majesty or of the Parliament of the United Kingdom in or in respects of the Settlements aforesaid or the Malay States or the Federation as a whole should come to an end.

AND WHEREAS effect has been given in the Federation of Malaya Agreement, 1957, by Her Majesty the Queen, Their Highnesses the Rulers, the Parliament of the United Kingdom and Legislatures of the Federation and of the Malay States.

AND WHEREAS a constitution for the government of the Persekutuan Tanah Melayu has been established as the supreme law thereof.

AND WHEREAS by the federal constitution aforesaid provision is made to safeguard the rights and prerogatives of Their Highness the Rulers and the fundamental rights and liberties of the people and to provide for the peaceful and orderly advancement of the Persekutuan Tanah Melayu as a constitutional monarchy based on parliamentary democracy.

And whereas the federal constitution aforesaid having been approved by an Ordinance of the Federal Legislatures, by the Enactments of the Malay states and by resolutions of the legislatures of Malacca and Penang has come into force on the 31st day of August, 1957, aforesaid.

Now in the name of God the Compassionate, the Merciful, I, Tunku Abdul Rahman Putra Ibni Al-Marhum Sultan Abdul Hamid Halimshah, prime minister of the Persekutuan Tanah Melayu, with the concurrence and approval of Their Highnesses the Rulers of the Malay States do hereby proclaim and declare on behalf of the people of the Persekutuan Tanah Melayu that as from the 31st day of August, 1957 the Persekutuan Tanah Melayu comprising the states of Lohore, Pahang, Negri Sembilan, Selangor, Kedah, Perlis, Kelantan, Trengganu, Perak, Malacca and Penang is and with God’s blessing shall be forever a sovereign democratic and independent state founded upon the principles of liberty and justice and ever seeking the welfare and happiness of its people and the maintenance of a just peace among all nations.

To all fellow Malaysian, Merdeka, merdeka, merdeka.

Best Regards
ZULKIFLI HASAN
DURHAM

Texas, United States of America

Korea to exempt Islamic bonds from distributions tax

Available at: http://www.bloomberg.com/apps/news?pid=20601080&sid=axmMs9VeBfQE

By Jungmin Hong: South Korea plans to exempt Islamic bonds from tax on distributions as it seeks to expand its capital markets and attract Muslim wealth from overseas. The rules would affect Ijarah and Murabahah securities, the most common forms of Islamic bonds, which are also known as sukuk, the Ministry of Strategy and Finance said in an e-mailed statement yesterday. The ministry will submit its proposals to the National Assembly by the end of September, it said.

Special treatment for sukuk “will draw large-scale capital from countries in the Middle East, which are likely to benefit from rising oil prices, while helping the nation diversify funding,” according to the statement. Global sukuk sales jumped to a record $31 billion in 2007 from $2.2 billion in 2000 as surging crude prices spurred economies in the oil-rich Persian Gulf, according to data compiled by Bloomberg. They then plunged to $13.9 billion last year as energy demand slumped amid the global credit crunch, the data show. Oil closed at $72.04 a barrel yesterday from an intra-day low of $32.4 on Dec. 19.

Muslim Shariah law forbids interest payments and speculation, so sukuk are asset-based securities paying a profit distribution to investors rather than interest. GS Caltex Corp., South Korea’s second-largest oil refiner, hired Merrill Lynch & Co. and Malaysia-based RHB Investment Bank Bhd. to help it sell what may be the country’s first sukuk, Chay Wai Leong, RHB Investment’s chief executive officer, said in April. Seoul-based Daewoo Securities Co. will “actively seek” opportunities to sell sukuk, it said last year. Indonesia’s government drew $4.7 billion of orders for its first sale of dollar sukuk, seven times the $650 million of securities on offer, debt management office Director General Rahmat Waluyanto said in April.

Best Regards
ZULKIFLI HASAN
DURHAM

Estadio Santiago Barnebeu, Madrid, Spain

Central Bank of Malaysia Bill 2009

Assalamualaikum and Happy Ramadhan al-Mubarak,

Dear Readers,

Please find enclosed the Central Bank of Malaysia Bill 2009 for your reference. This Bill is really significant to Islamic finance industry in Malaysia as it involves some major amendment to the existing legal frameworks particularly Part VII section 51-60. I highlight several essential provisions pertaining to the Shari’ah Advisory Council.

Section 53. Appointment of members to Shariah Advisory Council
53. (1) The Yang di-Pertuan Agong may, on the advice of the Minister after consultation with the Bank, appoint from amongst persons who are qualified in the Shariah or who have knowledge or experience in the Shariah and in banking, finance, law or such other related disciplines as members of the Shariah Advisory
Council.
(2) If a judge of the High Court, the Court of Appeal or the Federal Court, or a judge of the Shariah Appeal Court of any State or Federal Territory, is to be appointed under subsection (1), such appointment shall not be made except— (a) in the case of a judge of the High Court, the Court of Appeal or the Federal Court, after consultation by the Bank with the Chief Justice; and (b) in the case of a judge of the Shariah Appeal Court of any State or Federal Territory, after consultation by the Bank with the Chief Shariah Judge of the respective State or Federal Territory, as the case may be.
(3) A member of the Shariah Advisory Council appointed under subsection (1) shall hold office on such terms and conditions as may be provided in their respective letters of appointment, and shall be eligible for reappointment.
(4) The members of the Shariah Advisory Council shall be paid such remuneration and allowances as may be determined by the Board from the funds of the Bank.

Section 56. Reference to Shariah Advisory Council for ruling from court or arbitrator
56. (1) Where in any proceedings relating to Islamic financial business before any court or arbitrator any question arises concerning a Shariah matter, the court or the arbitrator, as the case may be, shall—
(a) take into consideration any published rulings of the Shariah Advisory Council; or
(b) refer such question to the Shariah Advisory Council for its ruling.
(2) Any request for advice or a ruling of the Shariah Advisory Council under this Act or any other law shall be submitted to the secretariat.

Section 57. Effect of Shariah rulings
57. Any ruling made by the Shariah Advisory Council pursuant to a reference made under this Part shall be binding on the Islamic financial institutions under section 55 and the court or arbitrator making a reference under section 56.

Section 58. Shariah Advisory Council ruling prevails
58. Where the ruling given by a Shariah body or committee constituted in Malaysia by an Islamic financial institution is different from the ruling given by the Shariah Advisory Council, the ruling of the Shariah Advisory Council shall prevail.

For full text, click here

The Central Bank of Malaysia Bill 2009

Enjoy reading!
Best Regards
ZULKIFLI HASAN
DURHAM

Fujairah, United Arab Emirates.

E-Lecture on Uqud in Islamic Financial Services

Assalamualaikum and Happy Ramadhan al-Mubarak,

As an additional effort to disseminate knowledge on Islamic finance as part of my intellectual journey and contribution, I am very pleased to share my series of lecture on Islamic finance related issues. The series of lecture are available on USTREAM TV. You may watch the first lecture series on the following address.
http://www.ustream.tv/recorded/2026400.

Please apologize for the defects and shortcomings. This is only my small effort of knowledge-sharing for the sake of Allah the Almighty.

Best Regards
ZULKIFLI HASAN
DURHAM UNIVERSITY

Liverpool, United Kingdom

Luxembourg Stock Exchange becomes an important European centre for Sukuk

Source: Le Voix E paper, Originally taken from Salaheddine Ahmedi

The Luxembourg Stock Exchange is an important European centre for the quotation of sukuk issuances. The statement follows after the admission of a new issue of sukuk for a total value of USD 1.5 billion. The issuer is the oil company owned by the Malaysian government, Petroliam Nasional (Petronas), which simultaneously made a bond debt quotation for an amount of USD 3 billion. The Luxembourg Stock Exchange lists 16 sukuk for a total amount of USD 7.3 billion, further positioning itself among the major players for this niche product and enabling it to compete in terms of value with notably London.

In 2009, global sukuk issuances could amount to USD 27.5 billion, according to a report by global consultancy firm Ernst & Young (E&Y) on Islamic finance, of which sukuk represents only one part. The E&Y report also highlights that this market weakened a bit in 2008, with issues worth USD 15.5 billion compared to USD 47 billion in 2007. Proving the interests of the Grand-Duchy, the Luxembourg Stock Exchange advocates a practical approach in requesting documentation pertaining to the inherent transactions rather than that of an exhaustive description of the sukuk structure. In addition, Clearstream, which is the international central depositary of Luxembourg, has adapted its technical procedures to take into account the specific nature of these products.

Finally, according to representatives of HSBC Securities Services, specialists in Islamic Finance, the Luxembourg government is at the moment studying the possibility of financing various activities of state or public entities through sukuk. Equivalent to bonds in Islamic finance, the sukuk should conform to Sharia law. Among other rules, the Sharia prohibits loans with interest, on which lies the principle of the classic bond issue. In the case of sukuk, the issues should correspond to a specific investment project and the profits paid annually to owners corresponding to profits coming from the development or utilisation of the underlying project. Hence, if losses are incurred, the owners don’t receive anything; a risk notion is thus associated with the return on investment of a sukuk.

Best Regards
ZULKIFLI HASAN
DURHAM

World Museum, Liverpool, United Kingdom