JAPAN - CAPITAL MARKETS - Financial Services Agency : Q and Q on Taxation of J-Sukuk

April 16, 2012
Financial Services Agency

Publication of “Taxation of J-Sukuk Q&A”

The 2011 tax reform introduced a tax break leveling the playing field between a quasi-bond beneficial interest which can be used as a J-Sukuk and a conventional bond for tax purposes. In addition, following the introduction of this tax break, Japan Securities Depository Center, Inc. commenced the handling of J-Sukuk on April 1, 2012.

Following the completion of the J-Sukuk market, FSA now publishes “Taxation of J-Sukuk Q&A” in order to make it widely known. FSA expects that this Q&A will support the development of the J-Sukuk market in Japan.

Taxation of J-Sukuk Q&A (PDF:68KB)

Contact

Financial Services Agency
Tel: 03-3506-6000 (main number)
Office of Financial Taxation, Policy and Legal Division, Planning and Coordination Bureau
(extensions: 2770, 3182)

MALAYSIA - PUBLICATIONS - Islamic Finance News : THE GUIDE 2012

Country Reports

Australia: The wait continues
Brunei Darussalam: Islamic banking and finance
China: The dragon stirs
Hong Kong: The gatekeeper
Indonesia: Playing catch-up
Japan: Reviewing priorities
Korea: Government intervention crucial
Malaysia: Cautiously optimistic
Singapore: High expectations
Thailand: Focusing on capital markets

The Full Guide 2012

MALAYSIA - FINANCE - Public Mutual launching new Islamic fund tomorrow - Indonesia on the list for investments

KUALA LUMPUR: Public Mutual, Malaysia's largest private unit trust company with 91 funds under management, is launching a new Islamic fund, Public Islamic Savings Fund, tomorrow.

"As the fund focuses its investments mainly in the domestic market, it offers investors an opportunity to capitalise on Malaysia's resilient economic growth prospects in the medium to long-term," said its chief executive officer Yeoh Kim Hong in a statement today.  (source)

JAPAN - REGULATONS - Islamic Finance - Japanese law reforms

A recent amendment to the Japanese laws will facilitate Shari'a-compliant financing structures within Japan. Historically, it had been difficult to structure Shari'a-compliant financing structures in Japan due to a number of factors, including the tax treatment of the distribution of profits to overseas Islamic investors. However, a recent amendment to the Japanese Asset Securitisation Law together with certain tax reforms have made investing in Japan in a Shari'a-compliant manner more attractive and have helped to level the playing field between conventional financing and Islamic financing for such investments in Japan. These amendments came into effect on 24 November 2011.

This client briefing re-visits the basics of the sukuk and sukuk-al-ijara and discusses the consequences of the latest legislative amendments for the development of Islamic finance in Japan.

Access the report : Japanese Law Reforms

JAPAN - CAPITAL MARKETS - Tokyo Bay Traders-Japanese Show Growing Interest in Islamic Financing

OPENPR.COM - (Press Release) - Japanese institutions are showing increasing interest in Islamic financing to diversify capital raising avenues.

Tokyo, Japan, September 26, 2011 -- Japanese institutions are showing increasing interest in Islamic financing to diversify capital raising avenues.

As the global financial markets recover from the financial crisis, Islamic finance is appealing as an alternative to conventional financial instruments. Sukuk share many features of conventional bonds, such as standardized transactions structures and documents, and similar trading, listing and ratings characteristics.

Issuers do not need to be Islamic entities, nor is the market restricted to the Middle East. Indeed there is anecdotal evidence which suggests that most sales of sukuk in 2012 will be generated from Asia. Malaysia continues to dominate the sukuk market today with an 80% market share in the global Islamic bonds market, but 2010 also saw other sovereigns such as Indonesia, with its successful Sukuk treble, make their way into the market. Singapore also made a relatively small but significant debut. (source)

MALAYSIA - BANKING - Japanese Mizuho asks Malaysia permission to develop Islamic bank

REPUBLIKA.CO.ID, KUALA LUMPUR - Mizuho Financial Group Inc., the third largest bank in Japan, admitted asking the Malaysian government permission to develop service the shari'a in the neighboring state. Chief Executive Officer (CEO) and Director of Mizuho Financial Planning Hiroyuki Yoshinari speak this step is over the opening of branches of Mizuho Malaysia on Monday (5 / 9) ago.

"We have already submitted an application to Bank Negara Malaysia (BNM) and awaiting approval," he said as reported by The Sun Daily Malaysia. BNM optimistic his side will soon issue a permit erection of this syariah unit. (source)

MALAYSIA - FINANCE - Public Mutual launches two new Islamic funds that will focus on the domestic market (also Indonesia)

KUCHING: Public Bank Bhd’s wholly-owned subsidiary, Public Mutual Bhd (Public Mutual) is launching two new Islamic funds, namely the Public Islamic Treasures Growth Fund (PITGF) and Public Sukuk Fund (PSKF) today. (source)

JAPAN - ARTICLE - Translating Islamic Finance into Japanese Legal Concepts - By Takashi Tsukioka

Recently, in Japan, Islamic finance has been attracting the attention of many potential market players. In December 2010, the Financial Services Agency of Japan offi cially announced its aim to “promote the development of an environment for the issuance of Islamic bonds in Japan” in its action plan for a new growth strategy. (source)

ARTICLE - The Emergence of Asia’s Islamic Finance Industry

By Mercy Kuo, PhD - Islamic finance is rooted in Shariah law, which prohibits interest-based financial transactions, gambling high-risk speculation, and financing any form of economic activity that can be considered detrimental to society. The industry’s modern-day evolution, beginning in the 1970s to the present day, was still considered an infant industry at the turn of the 21st century. (source)

ASEAN - High oil prices to hand Islamic finance a temporary lifeline

(Reuters) - Strong oil prices will spark renewed interest in Islamic finance but the $1 trillion industry is unlikely to garner broad acceptance in the long term, eclipsed by the products and pricing offered by conventional banks.

With oil at over $100 a barrel, investors are expected to flock to Islamic finance in hopes of another Gulf petrodollar boom, similar to 2008 when record energy prices propelled the industry into the global spotlight.

During the last boom, the credit crisis and the collapse of Lehman Brothers and bailout of banks such as Citigroup and Bank of America reinforced the case for non-Muslim governments from France to South Korea to consider Islamic finance.(source)

TAKAFUL - MS AD to buy 50 pct in Indonesia's Sinar Mas life insurance unit - Plans for Takaful in Indonesia

TOKYO, May 2 (Reuters) - Japan's largest property and casualty insurer, MS&AD , said on Monday it has agreed to buy a 50 pct stake in the life insurance unit of Indonesian conglomerate Sinar Mas for about 67 billion yen ($825 million). 

Japanese insurers have been stepping up their overseas expansion and focusing on emerging economies in Asia as they expect growth at home to remain weak given the country's ageing population.(full story)

CAPITAL MARKETS - Indonesia to issue global sukuk this year, cancel samurai

According to Dow Jones Newswire, Indonesia plans to issue USD 1bn of global sukuk (Islamic bonds), in the second half of 2011. The government is likely to cancel its previously planned JBIC-guaranteed samurai bond issuance which is not supposed to be in good demand from damaged Japanese market. (full story)

THAILAND - Islamic Bank sees market potential in Upper South

The Islamic Bank of Thailand (IBank) plans to expand its financial services to the upper southern provinces to support Muslim communities affected by recent flooding, according to president Dheerasak Suwannayos.

The bank will focus on Surat Thani, Nakhon Si Thammarat, Phatthalung and Trang provinces for its business expansion, which is scheduled for the second quarter this year after the flooding eases. (full story)

HALAL - Foreign agencies using MUI halal standards

Jakarta (ANTARA News) - At least 41 foreign food certification agencies have set their halal food standards based on inputs from the Indonesian Ulema Council (MUI)`s Food, Drug and Cosmetics Research Institute (LPPOM), an MUI official said,

Among the 41 agencies were those of a number of ASEAN member countries, Canada, England, Holland, Belgium, Turkey, Japan and the US, Lukmanul Hakim, the LPPOM head, said here Thursday.