The United Arab Emirates needs a centralized body for the Islamic finance industry to help develop its sukuk market further, a top central bank official said on Wednesday.
Saif al-Shamsi, assistant governor for monetary policy and financial stability, said the law calls for a central sharia committee at the federal level that would work with sharia boards at the corporate level but that has not been implemented yet federally.
“Despite the advanced state of the UAE in issuing Islamic sukuk, we believe that we still need to do more,” he said in a speech. “This includes finding a unified body for the main fatwas (decrees) in the Islamic financial services domain, as is the case in Malaysia.”
At present the industry is governed by a patchwork of national regulators, Islamic standard-setting bodies and scholars interpreting Islamic law - a recipe for different rules and practices.
“For sukuk to be issued there must be the regulation and infrastructure that is Islamic compliant and that is to be determined by (federal) sharia board and that is not there yet. We are calling for this.
Islamic financial assets hit $1.3 trillion globally last year, a 150 percent rise in the past five years as the industry expanded beyond core markets in the Middle East and Malaysia, financial lobby group TheCityUK estimates.