Oman's latest Islamic finance regulations
A regulatory framework for Islamic finance is taking shape in Oman as government bodies move towards meeting the aim of making Shari’a-compliant products available to the public this year. But logistical challenges and the limited size of the market may prevent entrants to the business from making quick profits.Legislation covering takaful (Islamic insurance) and sukuk (Islamic fixed income securities) is expected to be finalised by the end of the third quarter of the year, Capital Market Authority officials said.Approval of the country’s first takaful licence will follow soon afterwards, as three applications have already been received by the regulator, Ahmed al Harrafi, takaful team leader at the CMA, said.This complements efforts by the central bank to introduce a law that will supervise Islamic banks; the law is in its final stages of review, said Mohammed al Abri, senior director at the CMA.Last year, after insisting for years that its banking industry should be purely conventional, Oman reversed its stance and said it would introduce Islamic finance, partly to prevent outflows of funds to Sharia-compliant institutions elsewhere in the Gulf.But the introduction of the regulatory framework may not produce a rapid surge of activity. Many institutions are still grappling with the need to obtain product expertise, arrange oversight by boards of Islamic scholars, train staff and build computer systems. © Copyright 2011 www.tradearabia.com
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