The Challenges For Islamic Finance In Hong Kong

In my previous article, “how does shariah compliance paintings?” i touched upon the demanding situations that hong kong’s government faces whilst looking to implement the specified changes to set up a stage playing field between traditional financial products and the alternatives offered by way of islamic finance. Searching at the experience inside the uk offers a useful example of absolutely the capacity and growth this financial services area of interest offers. The uk authorities made the established order of a suitable financial and regulatory framework for islamic finance within the uk a key attention in 2003. On account that then the united kingdom government has performed the subsequent:

o in 2003 it eliminated the double tax on islamic mortgages and extended the tax alleviation on islamic mortgages to groups as well as individuals. O as a economic centre, london became extra appealing to problem and exchange sukuks, ie islamic bonds, by using reforming the arrangements for issuance of bonds so that returns and earnings bills could be treated as though they had been hobby. O the united kingdom’s economic offerings regulatory body, the monetary services authority, introduced projects that ensured that the regulatory treatment of islamic finance is consistent with its standard statutory goals and principles. The united kingdom authorities even taken into consideration issuing shariah-compliant bonds as well as offering shariah-compliant retail banking products through country wide financial savings & investments and performed a corresponding evaluate. Although it announced in november 2008 that neither presently gives fee for money, the government confirmed that it might display the state of affairs carefully. On the equal time, the united kingdom government determined to aid the development of islamic finance while ensuring that conventional and opportunity finance are treated similarly. The focal point is accordingly on identifying existing marketplace boundaries and the usage of rules to make certain that shariah-compliant merchandise may be presented and may compete on an equal footing with more traditional types of finance. Specific efforts have been made to make sure that current tax and regulatory systems inside the united kingdom do now not distort the market for investors wishing to put money into those kinds of products. O 5 absolutely shariah-compliant banks.

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A further 17 provide shariah-compliant services through “islamic windows” whereby they can offer knowledge in islamic finance to agencies and contributors of the general public. This is greater than every other non-muslim country. O the london stock exchange has listed a complete of 18 sukuk issues, which raised us$10bn. This is handed handiest by means of dubai nasdaq. O of the whole seven shariah compliant alternate traded funds, 4 were launched in 2008 on my own. Also, 2008 noticed an extra two new equity funds released. O in phrases of non-banking products, the primary employer to provide shariah-compliant insurance, referred to as takaful, to uk residents changed into accredited in 2008. O supporting this improvement of islamic finance are 18 regulation companies that provide islamic finance aid. Similarly, the large four expert provider companies offer islamic finance advisory offerings. O to provide educational support in excess of fifty institutions provide the important islamic finance instructional and schooling products. This is substantially extra than some other u . S . A . International. This is a tough act to observe for the hong kong authorities. Now not only will it have to compete with the stable criminal and regulatory platform that the uk authorities has furnished, but the united kingdom has a six yr head begin. The united kingdom has executed an outstanding job in securing its function as the key western centre for islamic finance. Given the capability for, specially, east asia, i’d wish that the hong kong authorities is suitably encouraged to make the important modifications inside the hong kong prison and regulatory framework as well. Allow me therefore repeat my name to the monetary secretary, john tsang. Please, mr tsang, be bold, and take the plunge. Enact the required law as quickly as feasible. You will now not handiest enhance the profile of hong kong as a worldwide economic centre but you will also create a significant wide variety of latest jobs, jobs that the financial offerings industry in hong kong badly wishes. Simply if you require recommendation on any extra modifications required, there are a number of regionally resident specialists who can factor you in the proper path. In addition, my email address is likewise proven at the lowest of this text, and i might most effective be too glad to take a seat down and speak this in more element with you. The financial services industry, as well as its supporting expert offerings, like accounting and regulation, will thanks for it!