Security and exchange commision of Pakistan approves Shariah Advisors Regulations
ISLAMABAD - In order to enhance the credibility of Islamic financial services sector, the Securities and Exchange Commission of Pakistan (SECP) has approved the Shariah Advisors Regulations , 2017. Framed under the Companies Act, 2017, these regulations will discipline and professionalize Shariah advisory in Pakistan. Companies and entities will engage only the Shariah advisors registered with the SECP .
To register, Shariah advisors will need to meet fit and proper criteria and abide by a code of professional behavior that emphasizes objectivity, integrity and independence of a professional Shariah advisor. The regulations have been formulated after an extensive consultation process with representatives of Shariah advisors , Islamic Financial Services Board (IFSB) Malaysia, State Bank of Pakistan (SBP), Pakistan Stock Exchange (PSX), Institute of Chartered Accountants of Pakistan (ICAP), takaful operators, modaraba and NBFI Association, Mutual Funds Association of Pakistan, and Shariah Board of the SECP .
It may be added that the SECP regulates various important elements of Islamic financial services industry. These elements include Islamic mutual and pension funds, modarabas and NBFIs, takaful operators, Shariah-compliant companies, Shariah-compliant securities, Shariah-compliant real estate investment trusts, and Shariah-compliant indices. Some of these elements have shown impressive growth. For instance, the share of Shariah-compliant assets of NBFI sector has grown from 12.3% in June 2010 to 34.6% as of June 2017.
Source:The NATION,Pakistan.
Product diversity could boost takaful penetration, says INCEIF
KUALA LUMPUR (Oct 24,2017): The local takaful insurance sector should widen its range of products to increase market penetration, International Centre for Education in Islamic Finance (INCEIF) president and chief executive officer Datuk Dr Mohd Azmi Omar said.
“We need to diversify [takaful products] and have more innovative products available in the industry so we can increase the penetration rate and market share of the sector in the country,” he told reporters after the signing of a Memorandum of Agreement (MoA) between INCEIF and University of Reading and University of Reading Malaysia today.
“In Malaysia, we have moved beyond just the banking industry in Islamic finance and we are now looking at the incorporation of financial technology within the sector. We want to make Islamic finance an alternative financing solution to the mainstream insurance options in Malaysia,” he said.
Mohd Azmi added that Islamic finance is a strong option for consumers due to its strong ethical basis, its responsible and green financing measures that are embedded in its framework.
He noted that currently, the penetration rate of Islamic finance in banking activities is nearly 40% in Malaysia, while the takaful insurance sector’s penetration stands at 15% — the highest penetration rate in the world.
“We do still have the highest penetration rate in the world, but I believe we can do more to nudge this number higher. More should be done to improve the takaful industry such as increasing human capital, providing more Syariah support, as well as seeing how the government can provide more incentives to support the sector,” Mohd Azmi said.
“There tends to be a misconception that Islamic finance is related to terrorism financing, when in fact it has been accepted by the International Monetary Fund, the World Bank and the Asian Development Bank,” he added.
Earlier, the MoA between INCEIF and the University of Reading and the University of Reading Malaysia is to signify all three parties’ collaborative efforts to foster opportunities for research, provide academic materials and publications, and other intellectual enrichment opportunities for the staff and students at the education facilities.
“We hope to produce graduates with strong Islamic finance background, so this collaboration is very important to us, and we hope that more collaborations will be done in the future so that Malaysia will be viewed as a key hub for Islamic finance globally,” Mohd Azmi said.
Islamic finance assets rise 9.5pc to RM783 billion
KUALA LUMPUR(October 27, 2017): The Malaysian Islamic finance (IF) industry continues its positive trajectory with total IF assets increasing by 9.5 per cent to reach RM783 billion, which also represent 28.8 per cent of the country’s total banking assets for the first seven months of this year.
The segment’s total financing also rose by 12 per cent to RM578.4 billion, accounting for 34.2 per cent of total loans in the banking system, according to the Economic Report 2017/2018.
The growth in total financing was supported by increase in disbursements to businesses at 16.3 per cent and households 9.4 per cent. More than half of the total financing was extended to the households sector totalling RM349.5 billion as of July 2017.
This was followed by the finance, insurance business services and real estate sector, accounting for 11.2 per cent (RM64.6 billion), construction sector at 4.8 per cent (RM27.9 billion).
Malaysia also remains at the forefront of IF innovation with the establishment of the Investment Account Platform (IAP), which utilises financial technology (fintech) to provide efficient intermediation to customers back in February 2016.
The types of businesses listed on the IAP are diverse ranging from cooperatives to small and medium enterprises (SMEs) and are primarily used to raise working capital or project financing, said the report.
Financing raised via the AIP in the first half had tripled to RM72 million, in comparison to RM20 million recorded in the first half of 2016.
The Shariah non-compliance risk in Malaysia IF sector is also relatively low given various safeguards to mitigate such risk from Bank Negara.
Source:https://www.nst.com.my/business/2017/10/295690/islamic-finance-assets-rise-95pc-rm783-billion
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