National and Global Islamic Financial Architecture:
Prolems and Possible Solutions for the OIC Member Countries
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collaboration with institutions in UK, Malaysia and Indonesia. SMU also teaches Islamic finance
as a specialization in its Master of Laws courses. In addition, Islamic finance has been included
as an eligible subject area under MAS’ Finance Scholarship Programme (Loh 2015).
The architectural institutions related to Islamic finance in Singapore are summarized below:
Legal infrastructure
Amendments have been made to the tax legislation to establish tax neutrality between Islamic
financial products and their conventional counterparts.
Financial System Regulation and Supervision Framework
As indicated above, Singapore has made only minor amendments to its regulatory regime to
accommodate Islamic finance, but has adopted helpful steps. These include treating profit-
sharing investment accounts as risk-bearing investments rather than deposits.
Shariah Governance Framework
Singapore does not have a central Shari’ah body or mandate any particular form of Shari’ah
governance.
Liquidity Infrastructure
Singapore has issued sovereign sukuk and, like the UK, has taken a facilitative approach to the
admissibility of other sukuk for Islamic bank liquidity purposes (MAS 2015). It has not,
however, gone beyond this.
Information Infrastructure and Transparency
Singapore is converging its standards with IFRS. It has made no amendments to accommodate
Islamic finance.
Credit ratings in Singapore are dominated by the major international agencies. There are no
Singapore-specific developments relevant to Islamic finance.
Consumer Protection Architecture
There appear to be no developments specific to Islamic finance related to consumer protection
and financial literacy.
Deposit insurance is provided (on a conventional basis) by the Singapore Deposit Insurance
Corporation. It covers deposits placed with Islamic banks (including explicitly those placed
under Murabaha), but would not cover investment accounts. Its operation does not claim to be
Shari’ah compliant.
Human Capital and Knowledge Development Framework
As discussed above, there is some activity in the academic sector and also a programme for
Islamic scholar development.
5.2.5. Strategic Approach and Achievements: Hong Kong
Hong Kong’s approach to Islamic finance has been capital markets focused, more or less from
necessity, given its lack of a Muslim population.
A presence in the market was set out as a government priority in the Chief Executive of the
Hong Kong Special Administrative Region’s Policy Address for 2007-08 in which he identified
the huge potential of development of Islamic finance and reiterated to actively leverage on