Risk Management in
Islamic Financial Instruments
46
Takaful:
Takaful Act 1984
Capital Market:
Capital Markets and Services Act 2007
Others:
Central Bank of Malaysia Act 2009
Government Funding Act 1983
Malaysia Deposit Insurance Corporation Act 2005
Offshore Financial Activities:
Labuan Islamic Financial Services and Securities Act 2010
3.1.5.2 Turkey
At present, the Turkish legal system does not provide any criteria to establish a Shariah board
or comply with Islamic principles. Participating banks ensure self-governance through the
appointment of a Shariah board to oversee its activities. However, the Turkish legal system
requires Islamic financial institutions to follow additional laws such as: the Capital Market Law
and the Communiqué on Principles Regarding Registration of Profit and Loss Sharing
Certificates, which allows issuing Shariah compliant certificates.
3.1.5.3 Kingdom Of Saudi Arabia (K.S.A.)
The KSA is regarded as one of the key Islamic Finance markets since the establishment of the
Islamic Developmental Bank back in 1975. The current infrastructure for Islamic Finance is
governed under the Saudi Arabian Monetary Agency (SAMA), which is also the regulatory
authority of the conventional financial system. Recently, Saudi Arabia’s cabinet has approved
its first ever mortgage law within the country.
3.1.5.4 United Arab Emirates (U.A.E.)
Both the Islamic finance and conventional banking industries in the United Arab Emirates
(UAE) are governed by the Central Bank of United Arab Emirates (CBUAE), established by the
central bank under the Union Law No.10 of 1980. In addition, Islamic financial institutions in
the U.A.E. are required to comply the following laws:
Islamic Banking
Federal Law No.6 of 1985, which establishes the legal foundations for Islamic banks
Capital Market
The Federal Law No.4 of 2000