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The UAE Sets Up National Regulatory Shariah Authority

This month witnessed the much-awaited announcement regarding the establishment of a national regulatory authority for Shariah in the UAE which is expected to further promote the overall local Islamic economy.

Earlier in May, the UAE cabinetapproved the launch of a nationalregulatory Shariah authority which willbe in charge of supervising the Shariahboards of individual banks and financialinstitutions. This came as a result ofthe increasing demand for the creationof such an authority to manage thechallenges that face the development ofthe Islamic finance sector in the UAE.This authority is also expected to solvedisputes regarding Shariah complianceof Islamic financial products in the UAE.The decision to set up this nationalShariah regulatory authority will boostthe overall status of the Islamic economyand draw more attention to its role andvalue on a regional and global level.

In addition, there were a number ofdevelopments in the Islamic financeindustry as follows:
      • The Gulf Bond and SukukAssociation, a regional tradeassociation representing the ArabianGulf bond and Sukuk market,and the Association of CorporateTreasurers signed an MoU wherebythey agreed to work together oninitiatives aimed at improving thepractice of treasury management anddeveloping fixed income markets.
      • The Sharjah Investment andDevelopment Authority announcedits plans to study the establishmentof a new off shore financial center inthe emirate to attract internationalbusiness and investors. It is stilltoo early to anticipate the overallstructure and mission of this center;however, it will definitely changethe current approach toward foreigninvestments.
      • Islamic syndicated financing in theUAE has witnessed a strong demandsince the beginning of the year.Dubai Parks and Resorts secured aAED993 million (US$270.35 million)syndicated financing facility whichis being provided by Dubai IslamicBank, Sharjah Islamic Bank and AbuDhabi Commercial Bank. Also in thepast month, DP World announcedthat it is seeking to buy back US$750million-worth of Sukuk maturingin 2017 through a tender offer forUS$1.5 billion trust certificates(Sukuk Mudarabah) due 2017.Sukukholders had until the 23rd May2016 to decide whether to acceptthe port operator’s off er to buy theSukuk at US$10,555 when the facevalue is US$10,000.
      • The Dubai Center for IslamicBanking and Finance and the DubaiIslamic Economy DevelopmentCenter, in cooperation with theChina Islamic Finance Cluband ZhiShang InterculturalCommunication, as well as inpartnership with Thomson Reuters,is organizing the fi rst China-UAEConference on Islamic Banking andFinance on the 24th and 25th May atthe Diaoyutai State Guest House inBeijing. This is the first China-UAEconference on Islamic banking andas announced, it should providean ideal platform for innovativeresearch in the field of Islamiceconomics and to address importantaspects that affect the Islamic financeindustry and future challenges inthis sector.
      • An official delegation from theUAE headed by Abdullah AhmedAl Saleh, the under-secretary of theMinistry of Economy for ForeignTrade and Industry, participated inthe 8th Kazan International EconomicSummit between the RussianFederation and member countriesof the OIC from the 19th to 21st Mayin Kazan, the capital of Russia’sTatarstan Republic.
      • The Department of EconomicDevelopment in Dubai has launched‘DEDTalks’, a knowledge exchangeplatform for thought leaders anddecision-makers from the public andprivate sectors to meet regularly andshare experiences, ideas, analysesand best practices relating to theeconomy and doing business.
This initiative will also play a rolein creating a platform to share anddiscuss challenges about the Islamicsector and will eventually contributetoward making Dubai the globalcapital of Islamic finance.
Published: May 2016
Publication: Islamic Finance News
Title: The UAE sets up national regulatory Shariah authority
Practice: Corporate and M&A,Banking & Finance
Authors: Rima Mrad
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