In my previous article, “How Does Shariah Compliance Work?” I touched upon the demanding situations that Hong Kong’s authorities faces whilst looking to put into effect the required adjustments to set up a degree playing field between conventional financial merchandise and the alternatives provided with the aid of Islamic finance. Looking on the revel in within the UK provides a beneficial example of absolutely the ability and increase this economic offerings niche offers.
The UK government made the establishment of a appropriate financial and HAMKA regulatory framework for Islamic finance within the UK a key focus in 2003. Since then the UK authorities has executed the subsequent:
o In 2003 it eliminated the double tax on Islamic mortgages and extended the tax alleviation on Islamic mortgages to companies in addition to people.
O As a economic centre, London became greater attractive to problem and exchange sukuks, ie Islamic bonds, with the aid of reforming the preparations for issuance of bonds so that returns and earnings bills might be dealt with as if they have been hobby.
O The UK’s economic services regulatory body, the Financial Services Authority, added projects that ensured that the regulatory treatment of Islamic finance is constant with its ordinary statutory targets and principles.
The UK government even considered issuing Shariah-compliant bonds in addition to providing Shariah-compliant retail banking products thru National Savings & Investments and carried out a corresponding assessment. Although it introduced in November 2008 that neither presently offers cost for cash, the authorities showed that it might reveal the scenario closely. At the identical time, the United Kingdom government decided to support the improvement of Islamic finance while ensuring that traditional and alternative finance are treated equally. The focus is hence on identifying present market limitations and the use of law to make sure that Shariah-compliant products may be supplied and might compete on an equal footing with extra conventional kinds of finance. Particular efforts have been made to ensure that current tax and regulatory systems inside the UK do not distort the market for investors wishing to invest in the ones forms of products.
The upshot of this seasoned-active and forward searching approach with the aid of the UK authorities can be seen via the consequences done thus far. To-date, Islamic product services inside the UK encompass:
o Five completely Shariah-compliant banks. An additional 17 offer Shariah-compliant services thru “Islamic home windows” wherein they are able to provide know-how in Islamic finance to businesses and participants of the general public. This is greater than some other non-Muslim usa.
O The London Stock Exchange has listed a complete of 18 sukuk problems, which raised US$10
