The Malta Financial Services Authority (MFSA) is working on a regulatory framework for sukuk and takaful. Recently, the MFSA released a framework for how Islamic banks would be regulated. This document provides descriptions of the regulatory treatment of many common Shari'ah-compliant transactions.
Indonesia's parliament is expected to soon pass legislation that will make it easier for banks to begin offering Shari'ah-compliant products. Despite the large Muslim population, Indonesia has lagged behind many Southeast Asian countries in changing laws to make Islamic finance easier and, as a result, has one of the less developed Islamic finance markets in the region.
A writer at Asharq Alawsat complains about the lack of publicly-available and accurate information on the Islamic finance industry noting that many different and contradictory figures are cited about even the industry's size and growth rate. Although there is some information available from sources like the Islamic Finance Information Service (IFIS) and Zawya, these tend to be constrained to very narrow pieces of information. With an industry that is estimated to be between $250 and $800 billion and growing between 15% and 30% per year, there should be greater resources dedicated to cataloguing and collecting basic data on the industry's size, growth rate, distribution of funds in types of financial products.
As Islamic finance moves from a niche to a mainstream financial industry, it will need to develop new products to compete with conventional financial institutions and also develop regulation to prevent excessive risk-taking by Islamic financial institutions that could put depositors money at significant risk. The latter point was the subject of a recent IMF paper, "Islamic Banks and Financial Stability: An Empirical Analysis" (full paper in PDF). Other challenges include bringing in new Shari'ah scholars to keep up with the growth in the industry.
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