The Shariah Advisory Council (SAC) of Bank Negara Malaysia at its 190th on 26 February 2019has made a ruling that the proposed collateralised commodity murabahah product using scripless financial asset as collateral which incorporates the concept of tawarruq (commodity murabahah) and rahn (pledge) is allowed subject to the following requirements:
- Change in the collateral (marhun) registration from the pledgor (rahin) to the pledgee (murtahin) does not constitute an actual transfer of ownership as it only involves the transfer of legal title while the beneficial rights remain with the pledgor;
- The pledgor still assumes all liabilities of the collateral and is entitled to the benefits arising from the collateral;
- The pledgee has no right to sell the collateral to a third party except for the purpose of liquidating the asset in the event of default;
- The pledgee has no right to pledge the collateral to a third party except with the consent of the pledgor; and
- The pledgee is obliged to return the collateral to the pledgor upon settlement of the debt arising from the commodity murabahah transaction.