This study examines the effect of ownership structure as one of the corporate governance monitoring mechanism to Sukuk rating. Sukuk rating represents the credit risk assessment made by local rating agencies, RAM and MARC. This study is based in Malaysia for the period of 2008-2013. Two proxy for ownership variables chosen were institutional and insider investors. The results of this study showed that institutional investors have a non-significant effect to Sukuk rating with a mix positive and negative directions. When this variable was tested alone together with the control variables of financial characteristics —leverage, profit and size, the results showed a positive and non-significant effect to Sukuk rating. However, the direction changed when the variable was tested with the appearance of insider investors to proxy ownership and the non-significant effect remains. Insider investors showed a significant and negative effect to Sukuk rating across tested models.
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