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SECTOR REPORT Islamic finance regulatory developments point to positive growth This includes a number of European and other countries which until recently have actively began to reform their tax, legal, and regulatory frameworks in order to attract Islamic investments. To date, there have been many new regulatory developments international levels, and which only contribute to the strength point the positive growth of the industry and that it will continue on this impressive growth trajectory and is set to reach Us$6.5 trillion in total assets by 2020. Egypt and developments of 2013 takes us to Egypt which approved February 2014 a new Sukuk law that will allow the country to tap a new source Bank, Industrial Development and Workers Bank of Egypt, Export Development Bank of Egypt and Barclays Bank Egypt, submitted applications to the Central Bank of Egypt seeking Islamic banking licenses. Libya to enact a new Islamic banking law by the end of 2012. The new law was passed in May 2012 and further work has been carried on to amend legislations in order to attract foreign investments and stimulate the private sector following the civil war. On this front, the Libyan authorities have been looking at several options for Islamic banking services within the country; these include 23 SECTOR REPORT allowing conventional banks to operate branches or Islamic banking windows and also permitting conventional banks to resources still needs to be mobilized in Libya in order to activate various institutions, such as insurance companies, Islamic funds and investment instruments by the end of 2014 or the beginning of 2015. In January 2013, the Libyan government approved a law that would ban all interest payments in Libya, in efforts to accelerate the move toward an Islamic banking system in the country. This law is expected to come into force in early 2015. th June 2013 the Islamic Financial Services Malaysia Act 2013 (IFSA) came into force, ushering in a new regulatory and supervisory framework for Malaysia. The IFSA consolidates the provisions of the Islamic Banking Act 1983 and Takaful Act 1984 which were also repealed, into a single piece of legislation. and aims to provide the regulator with greater powers to counter services sector. As the Malaysian regulatory and supervisory framework enters a new stage of its development, the IFSA will ensure the laws Bahrain institutions in Malaysia continue to be relevant and effective to Master Investment Wakalah Agreement and related guidance memorandum in June 2013. The Wakalah Agreement is a legal their liquidity requirements through the Wakalah principal as an alternative to the standard Murabahah currently used in the market. The launch of the standard form Wakalah is the latest standard form document published by the Bahrain-based IIFM, pursuant to the launch of the ISDA/IIFM Tahawwut (Hedging) in March 2010. Oman initiated the process by developing the required legislation and The Bank of Muscat, Oman’s biggest bank by assets, received a license to offer Shariah compliant services in early 2013. The worth of conventional bonds and Sukuk in line with its budget Sukuk issuance. Oman’s Capital Market Authority completed the drafting of bylaw that regularizes the issuance of Sukuk and the this development, the sultanate celebrated the issuance of the Investment acted as the principal advisor, joint lead arranger and joint lead manager for the Sukuk Ijarah on behalf of TDC. institutions for the next ten to twenty years. In Malaysia, the domestic bond market is the largest in clear regulatory framework is required. In this regard, Malaysia is expected to make amendments to existing laws and enact a Netting Act to protect enforcement rights of “close-out netting” contribute to a more robust derivatives market, thereby reducing doing business in Malaysia. Malaysia is expected to make amendments to existing laws and enact a Netting Act to protect enforcement rights of “close-out netting” under the financial contract Qatar sectors in the world and its Sukuk issuance has been very Sukuk issuance nations in the world in 2012. Islamic banks in Qatar have continued to post positive results owing partly to the directive issued by the central bank to disallow conventional banks from offering Islamic banking products and services via window operations earlier this year. Index. The index is based on QE listed stocks of minimum free was launched with the view to support the creation of a Shariah industry with new developments taking place all the time. The continue on a positive growth and will change to incorporate more productive structure that are more innovation-driven and knowledge intensive. The role of the regulator therefore will also evolve in order to remain current with these changes. The regulator will need to become an enabler of growth and development in this very young industry. This will lead to increased predictability consulting and sound robust legal and regulatory framework. www.IslamicFinanceConsulting.com www.IslamicFinanceEvents.com www.IslamicFinanceNews.com www.IslamicFinanceTraining.com www.MIFforum.com www.MIFmonthly.com www.MIFtraining.com www.REDmoneyBooks.com singapore businesses at the standard 12% rate, instead of the 5% concessionary rate, from the 1st April 2013. 24 can be contacted at [email protected] and whalan@azmilaw. com respectively. February 2014