The ISSBNT involves the selling and buying of securities, as entered into between an Approved Supplier ( a person/entity approved by BMSC (Bursa Malaysia Securities Clearing) to be a supplier in an ISSBNT) and an Approved User (a person/entity approved by the BMSC to be a user in an ISSBNT) based on the ISSBNT model and facilitated by BMSC in accordance with the Rules of BMSC.

The ISSBNT model is a Shariah-compliant alternative to the conventional SBLNT model and is structured based on two outright sale (bai’) transactions that include the features of two unilateral promises or undertakings (wa’dan), conditional option (khiyar al-shart) and the provision of collateral (al-rahn) as security for the indebtedness.

The illustration of the ISSBNT model is as per Diagram 1.0 below:

Diagram 1.0: ISSBNT Model

ISSBNT Participants must execute the two unilateral promises or undertakings (wa’dan), i.e. Wa’d 1 and Wa’d 2, to reflect the commitment of the ISSBNT Participants to perform certain obligations such as the selling or delivery of securities, buying or accepting securities, and releasing the pledged collateral upon the settlement of the contract.

• Wa’d 1 refers to the unilateral promise or undertaking issued by the Approved Supplier to buy or to accept if the Approved User sells or delivers or upon occurrence of the agreed-upon trigger events; and
• Wa’d 2 refers to the unilateral promise or undertaking issued by the Approved User to:
  
  (i) Execute Leg 2 upon recall by the Approved Supplier or upon the occurrence of the agreed-upon trigger events; and
  (ii) Adjust the value of pledged collateral in accordance with the market price of the securities on a marked-to-market basis.