IslamicFinance.de

Capital Market Authority of Oman (CMA Oman) recently issued new sukuk regulations that aim to provide clarity and transparency to market players, while providing protection to investors in sukuk transactions. At the forefront of the historical initiative is Kemal Rizadi Arbi, a Malaysian who is an adviser at CMA Oman as well as a member of the Oman government’s sukuk committee. “It is to be noted that not all jurisdictions have specific and separate sukuk regulations, particularly in the Gulf Cooperation Council (GCC) countries, with many just having a conventional bond regulatory framework with some additions made on the syariah requirements. “In addition, it has been drafted to provide flexibilities and spur innovation in the market, among others introducing a new trust regulation and structure and allowing the issuance of a sukuk programme,” said Kemal in an email to Business Times recently.

The financial services industry is a highly-regulated industry due to the mobilisation of investors, depositors and policyholders, that is, public funds. Significant public trust demands proper supervision and monitoring of financial services and, hence, the promulgation of statutes, statutory provisions, guidelines and circulars with direct supervision from financial authorities. Soundness and stability of the financial system are the universal concern of all financial authorities, as specified by World Bank Financial Soundness Indicators (FSIs). With regards to regulation of Islamic financial institutions and services, various jurisdictions present different forms of regulatory framework. Variations of such framework are attributed to a country’s specific approach to the adoption of Islamic financial institutions, in particular, and embracing of the Islamic financial system, in general. A social choice to regulate significantly depends on the types of government financial systems and their perspectives on financial liberation, as well as either having a banking (such as Germany) or capital market (such as the United States) orientation.