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Regulatory Enhancements Push UAE Industry Forward

In the past month, a number of achievements have been announced on a regional and global level with regards to the Islamic finance industry. The nature of the progress we are witnessing in this sector, especially in the MENA region, is remarkable as governments and regulators start to actively work on enhancing the regulatory and legal framework for the Islamic finance sector.

On a local level, the 10th World Islamic Economic Forum was held in Dubai at the end of October with a comprehensive agenda covering a list of topics including Halal business, trade, SMEs, healthcare and telecommunications. The attendance this year included prominent individuals from the industry with a considerable delegation from Europe’s financial capitals.

In parallel to the above, Obaid Humaid Al Tayer, UAE minister of state for financial affairs, and Pierre Gramegna, Luxembourg's minister of finance, signed an MOU on cooperation in the field of Islamic banking services. This MOU was signed in recognition of the two countries’ commitment to the field of Islamic banking and a further recognition of the anticipated growth of this industry.

The signing was held on the 26th October 2014 at the ministry’s headquarters in Abu Dhabi, at the sidelines of the signing of a protocol to amend the agreement on the avoidance of double taxation and prevention of fiscal evasion on income and capital.

In parallel to the above, Aafaq Islamic Finance, a UAE-based private joint stock company regulated by the UAE Central Bank, carried out its first transaction on the NASDAQ Dubai Murabahah Platform. NASDAQ Dubai Murabahah Platform is a tailored platform for Islamic financing established by NASDAQ Dubai in collaboration with Emirates Islamic(EI) and Emirates Islamic Financial Brokerage (EIFB). The platform has completed so far a total of more than AED21 billion (US$5.72 billion) of transactions.

On an international level, it has been announced that the International Monetary Fund (IMF) held its first consultation on Islamic finance with different industry players in Washington DC. This is a long awaited move in recognition of the importance of a strong regulatory supervision for this sector from an international organization such as the IMF. The UAE market is keen to receive the recommendations and outcome of these consultations amid the diff erent local voices calling for more standardization in the industry.

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Published: November2014
Publication: Islamic Finance News
Title: Regulatory enhancements push UAE industry forward
Practice: Corporate and M&A,Banking & Finance
Authors: Rima Mrad
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