The United Arab Emirates (UAE) has a new law regulating Islamic financial institutions, replacing a law passed in 1985. The country has seen the ratio of assets in Islamic financial instituions grow rapidly to 13.5 percent, which exceeds Malaysia's 12%. The announcement described the new law as creating a Shari'ah Council to supervise Islamic finance activities, but was unclear about whether this would replace the individual Shari'ah boards at Islamic financial institutions.
At the launch of the Chartered Institute for Management Accountants (CIMA) Islamic finance qualification, the Deputy Finance Minister of Malaysia pushed for standardization in Islamic financial products. Bahrain-based International Islamic Financial Market (IIFM) is nearing completion of a standardized commodity murabaha contract that will be acceptable in many jurisdictions. The commodity murabaha transaction has recently been criticized, but still represents a large share of the transactions occuring in Islamic finance. The IHI newsletter in February (PDF version) provided a discussion about this criticism.
Despite lacking significant local demand for Islamic financial products, Singapore is moving ahead in its goal of attracting Islamic finance to the city-state with the creation of a level-playing field for Islamic finance including in taxation. Because Islamic financial transactions currently use transfers of assets between issuers and special purpose vehicles (SPVs) used in the financing process, they are often tax-disadvantaged compared to conventional financial products.
Indonesia's parliament is expected to pass a law to allow the government to issue sukuk. Despite having the largest number of Muslims, Indonesia has lagged behind in Islamic finance.
The Yemen Times has an interesting article describing the basics of Islamic finance. Shari'ah-compliant investment in gold has been launched on the Dubai exchange. Pakistan will issue a domestic, rupee-denominated sukuk for $318 million soon. South Korean banks are preparing to enter the Islamic financial industry.
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