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 cabinet approved the launch of a national regulatory Shariah authority which will be in charge of supervising the Shariah boards of individual banks and financial institutions. This came as a result of the increasing demand for the creation of such an authority to manage the challenges that face the development of the Islamic finance sector in the UAE. This authority is also expected to solve disputes regarding Shariah compliance of Islamic financial products in the UAE. The decision to set up this national Shariah regulatory authority will boost the overall status of the Islamic economy and draw more attention to its role and value on a regional and global level.
In addition, there were a number of developments in the Islamic finance industry as follows:
- The Gulf Bond and Sukuk Association, a regional trade association representing the Arabian Gulf bond and Sukuk market, and the Association of Corporate Treasurers signed an MoU whereby they agreed to work together on initiatives aimed at improving the practice of treasury management and developing fixed income markets.
- The Sharjah Investment and Development Authority announced its plans to study the establishment of a new off shore financial center in the emirate to attract international business and investors. It is still too early to anticipate the overall structure and mission of this center; however, it will definitely change the current approach toward foreign investments.
- Islamic syndicated financing in the UAE has witnessed a strong demand since the beginning of the year. Dubai Parks and Resorts secured a AED993 million (US$270.35 million) syndicated financing facility which is being provided by Dubai Islamic Bank, Sharjah Islamic Bank and Abu Dhabi Commercial Bank. Also in the past month, DP World announced that it is seeking to buy back US$750 million-worth of Sukuk maturing in 2017 through a tender offer for US$1.5 billion trust certificates (Sukuk Mudarabah) due 2017. Sukukholders had until the 23rd May 2016 to decide whether to accept the port operator’s off er to buy the Sukuk at US$10,555 when the face value is US$10,000.
- The Dubai Center for Islamic Banking and Finance and the Dubai Islamic Economy Development Center, in cooperation with the China Islamic Finance Club and ZhiShang Intercultural Communication, as well as in partnership with Thomson Reuters, is organizing the fi rst China-UAE Conference on Islamic Banking and Finance on the 24th and 25th May at the Diaoyutai State Guest House in Beijing. This is the first China-UAE conference on Islamic banking and as announced, it should provide an ideal platform for innovative research in the field of Islamic economics and to address important aspects that affect the Islamic finance industry and future challenges in this sector.
- An official delegation from the UAE headed by Abdullah Ahmed Al Saleh, the under-secretary of the Ministry of Economy for Foreign Trade and Industry, participated in the 8th Kazan International Economic Summit between the Russian Federation and member countries of the OIC from the 19th to 21st May in Kazan, the capital of Russia’s Tatarstan Republic.
- The Department of Economic Development in Dubai has launched ‘DEDTalks’, a knowledge exchange platform for thought leaders and decision-makers from the public and private sectors to meet regularly and share experiences, ideas, analyses and best practices relating to the economy and doing business.
This initiative will also play a role in creating a platform to share and discuss challenges about the Islamic sector and will eventually contribute toward making Dubai the global capital of Islamic finance.
|Publication:||Islamic Finance News|
|Title:||The UAE sets up national regulatory Shariah authority|
|Practice:||Corporate and M&A, Banking & Finance|