FAQ - Frequently Asked Questions

  • Investment Account Platform (IAP)

  • What is Investment Account Platform (IAP)?

    IAP is an avenue that provides access to wider shariah-compliant investment option to investors and a greater access to financing to ventures.

  • How does IAP work?

    Please refer to the diagram below for an overview of IA Platform.

  • Who are the investors and ventures?

    The target investors and ventures are as follows;

    • Investors - Institutional bodies, corporate, fund and asset management companies, pension funds, Takaful and insurance operators, high net worth individuals and retail investors.
    • Ventures - Corporate, SME and non-SME companies that require financing either project related or for purchase of assets.

  • What are the features of IAP?

    The features of IAP are as follows:

    • An avenue for shariah-compliant investment and fund raising.
    • Independent rating by a reputable rating agency.
    • Easily accessible anywhere.
    • Credit assessment and screening by the Sponsoring Banks.
    • Compliance to disclosure standard on ventures to facilitate investors' informed decision making.
    • Open to all types of ventures, entities and purposes involved in all types of industries.
    Currently, the platform is independent from and not integrated with the Banks' existing infrastructure or system.

  • Who owns IAP?

    IAP is owned by an entity called IAP Integrated Sdn Bhd.

  • What kind of browser can support IAP?

    All browsers have accessibility to this platform i.e. Internet Explorer, Mozilla Firefox, Google Chrome etc. This platform is designed with compatible mode to be accessed by all browsers.

  • Venture

  • How do I raise funds ?

    You can raise fund via IAP in two(2) ways:

    • Direct submission of your financing application to a specific Sponsoring Bank; or
    • Submission directly on IAP where your application and proposal will be picked up and assessed by all Sponsoring Banks.
  • What are the advantages of obtaining financing via IAP?
    • Provides ventures with a new source and enhanced access to funding for their business activities.
    • Allows ventures access and opportunity to pitch their funding requirements to multiple banks concurrently from a single source.
    • Enables ventures to submit online applications for funding to Sponsoring Banks that could reduce hassle and increase efficiency.
    • Tapping into Sponsoring Banks' expertise and experience in structuring financing to meet the investors' requirements.
    • Potential for new funding structures including a hybrid of debt-equity financing or equity financing.
  • What kind of business is suitable to raise funds via IAP and what is the minimum project amount I can list?

    All types of ventures seeking for funding above RM500,000 may apply for financing on IAP.

  • What are the costs for obtaining financing through IAP?
    • Cost of financing which will be charged by the Sponsoring Banks according to factors such as tenure, security arrangement and types of financing facilities;
    • Cost of listing the venture on IAP, and for rating services.

  • Is the application process similar to obtaining normal financing from banks?

    No. Application for normal financing from banks will be based on the creditworthiness of the venture where upon approval, the financing amount requested will be immediately provided by banks.

    In contrast, to IAP, Sponsoring Banks will upon approval list the venture on IAP to raise funds from the investors. Other than disclosing the information of the venture and its projects for assessment by the investors, a credit rating will also be assigned to the venture and its project by a reputable rating agency and displayed on IAP.

  • How will I know if a Sponsoring Bank interested in my venture?

    You will be notified by IAP via email.

  • What will happen if my venture fails to obtain the financing amount requested on IAP?

    The following scenarios may take place:

    • Your Sponsoring Bank to take up the remaining portion of the unsubscribed amount;
    • Extension of your campaign period for an agreed number of days;
    • You accept the reduced amount and proceed with your project without the Sponsoring Bank taking up the unsubscribed portion (Downsize); or
    • Abort the campaign.
  • Who will undertake the rating of my venture or project?

    The rating of your venture or project will be performed by a reputable credit rating agency.

  • Who can access my venture's information?

    Information on your venture is only accessible by IAP Admin, Sponsoring Banks, the rating agency and the potential investor with your prior consent.

  • Is the performance of my venture monitored?

    Performance of your venture will be monitored by your Sponsoring Bank. A performance report will be prepared on quarterly basis to be distributed to all your investors.

  • Investor

  • How do I get started with IAP?
    • Individual investor: An investor may register as an IAP user on IAP - Sign Up. In some cases, officers from Sponsoring Banks may approach potential investors to facilitate registration as IAP user. An Investors will be asked to undertake a suitability assessment (SA) after a particular venture has been selected. Results of this assessment will be valid for one year, where the investor does not need to undertake the SA again to invest in a different venture.
    • Corporate/ institutional investor: An institution may register itself as an IAP user through IAP - Sign Up. Officers from Sponsoring Banks may also facilitate registration of a potential institutional investor on IAP. For these type of investor, the SA is not required to be undertaken. However, the institution has to provide a letter authorising certain individuals or parties to make investment on behalf of the institution. This letter will be verified by IAP before accepting user registration by the institution.
  • What is the definition of high net worth (HNW) individual on IAP?

    Sponsoring banks stipulate different conditions in classifying an investor as HNW individual. For IAP, Sponsoring Banks will determine the HNW status of their respective investors based on their existing practices.

  • What are the benefits of investing in IA products via IAP to investors?
    • Potential higher returns: Investors with greater risk appetite has the option of placing their surplus funds into IA to earn potentially higher returns vis--vis normal savings and deposits.
    • Accessibility to choices of investments: Under IA, investors are able to choose where their funds are invested into.
    • Confidence via intermediary roles of Islamic banks: Appropriate governance and sufficient disclosure are implemented by Islamic banks under IA. A description of the fiduciary duties of Islamic banks in operationalising IA (as stipulated in the Investment Account Framework issued by BNM) is illustrated below:
  • How do we know if IA products on IAP are Shariah-compliant?

    IA products on IAP are marketed by Sponsoring Banks. Under the Islamic Financial Services Act 2013 (IFSA), Islamic banks are required to ensure Shariah compliance of their offerings under the supervision of their respective Shariah Committee and later submit the products to Bank Negara Malaysia (BNM) for approval.

  • Who are the target customers that are likely to be using IAP?

    Investors with excess funds who are interested in obtaining higher returns that commensurate with the level of risks associated with their investments.

  • What is the indicative return that I can get from investing in ventures listed on IAP?

    An indicative return will be provided for each venture based on assessment and terms of offer by the Sponsoring Bank upon listing. Return is also dependent on the performance of the underlying ventures throughout the investment tenure.

  • Is there a standardised rate of return for investments via IAP?

    No, rate of return for investments via IAP varies based on the level of risk and performance of each underlying venture.

  • What are the types of investments that can be benchmarked against IA?

    Returns on IA investments can be benchmarked against alternative investment options such as fixed deposits, bond or sukuk of similar rating or unit trust.

  • What type of fees are applicable to investors?

    Fees applicable to investors are dependent on the type of Shariah contract of the IA:

    • Wakalah: Wakalah fee, and performance incentive (if total return exceeds estimated return to investors).
    • Mudarabah & Musharakah: Profit sharing ratio (PSR).
  • Are there any incentive for investors to invest via IAP?

    Individual investors are provided with income tax exemption for profits earned in any three (3) years after the first profit is made for each investment. This exemption applies to investments made from year 2016 to year 2018. For more details, please download Income Tax (Exemption) (No. 3) Order 2016.

  • Why do I have to undertake the Suitability Assessment (SA)?

    Under IA, investors with different risk appetite have the option of placing their surplus funds to earn potentially higher returns from their investments. Naturally, investors are expected to invest according to their risk profile. The SA serves as a standard measurement for Sponsoring Banks in determining the risk profile of the investors. The Sponsoring Bank has the fiduciary duty to caution the investors should the investors decide to invest in an investment that does not match their risk profile. This is to ensure that investors are well-informed on the risks involved in pursuing a specific investment decision.

  • How will the SA assist my investment decision?

    The Suitability Assessment will assess investors from three key areas namely:

    • Financial capabilities;
    • Investment needs and appetite; and
    • Investment knowledge and experience.

    This assessment serves as a check and balance for the Sponsoring Bank in protecting investors from investing beyond their risk profile. While this assessment is designed to provide the most accurate view possible on the risk profile of investors, the accuracy of this assessment is to a certain extent, influenced by investors' genuineness in responding to the questions put forth.

  • Will I know my risk profile?

    Yes, and your SA result will be categorised under four (4) categories. In the event where an investor is interested to invest in ventures that are beyond his risk profile, the investor will be advised to undertake further consultation at dedicated branches of the Sponsoring Bank.

    You can refer to the table below for venture's ratings that suit your risk profile category:

  • Is the SA test standard for all Sponsoring Banks?

    Yes, it is.

  • How reliable is the rating for each venture?

    Rating provided for each venture or project is based on an independent assessment by a professional rating agency.

  • Will I know the risk rating of the project that I want to invest in?

    Yes, this rating will be uploaded on IAP as part of the information provided on listed ventures to potential investors.

  • Can I invest in any venture of my choice?

    Yes, you can. Through IAP, investors will be able to view a whole range of investment choices on the platform and also the relevant information on each investment.

  • What happens if I decide to invest into a venture against the recommendation of my Sponsoring Bank?

    IAP will advise investors to seek for additional consultation at dedicated branches of the Sponsoring Bank should they intend to invest beyond their risk profile. Upon declaring their understanding on the risks involved and pursue with the investment to the Sponsoring Bank, investors will then be allowed to proceed.

  • After selecting the venture I want to invest in, what do I do next? / How will I know if the project I want to invest in suits my risk profile?

    The diagram below illustrates the process flow for investors upon selection of ventures:

  • Is there any minimum amount that I can invest?

    Yes, there is. The minimum amount will be determined by the Sponsoring Bank.

  • Can I invest below the minimum amount?

    No, you can't.

  • Will I be able to withdraw my funds anytime (or on demand)? / Will I be able to retract my money before maturity of the venture?
    • During campaigning period
      Although funds are retained in CASA, they will be locked in by the Sponsoring Bank throughout the campaign period. Only in the event where the venture is cancelled will these funds be released by the Sponsoring Bank and can be withdrawn upon demand.
    • Upon investment of funds
      Funds will be transferred to the Restricted IA (RIA) upon successful campaign for the identified venture. Currently, investors are not allowed to withdraw their invested funds in IA until the maturity of the investment.
  • Can I sell my portion to another party?

    Yes you can, but this is done on a willing buyer willing seller basis and will not involve IAP. You should consult the Sponsoring Bank first before you decide to proceed.

  • How long is the estimated campaign period for each investment?

    Under normal circumstances, the campaign runs for thirty (30) days unless otherwise agreed with the Sponsoring Bank.

  • How will I know if the project has been fully funded? / How will I know the outcome of the campaign for the venture I am investing in?
    • During campaign period
      There will be an indicative bar on the IAP to reflect the amount of investment booked, paid and subscribed for each venture.
    • Upon completion of campaign period
      The Sponsoring Bank will contact investors through email to inform on the outcome of the campaign. Possible outcomes include:
      • Full subscription and the the venture is successfully funded and IA is then created.
      • Under subscription or no subscription at all. Under these two (2) scenarios, the Sponsoring Bank and the venture will have to agree upfront on the next course of action i.e. whether to extend the campaign period or for the bank to potentially underwrite a portion of fund needed.
  • What happens if the venture that I am investing in fails?

    The Sponsoring Bank is required to regularly alert investors on the going-concerns of their IA funds through periodical performance reports. The following process will take place if a venture defaults: