Malaysian Islamic capital market : regulatory and legal scaffold altercations in the legal 'Thick" jungle.

Islamic capital market is burgeoning in Malaysian and in the world today. This is evident from the diversified products offered to the patrons. Malaysia has fonnulated a distinctive legal framework for the Islamic capital market which is indeed an exemplary to the rest of the world, which is yet considering doing it, but is deliberating whetherMalaysia has overdone the regulating of Islamic Capital Market or not. The legal infrastructure and the regulatory measures utilized in the Malaysian capital market is indeed worthwhile looking at. This is the only way to appreciate the Malaysian regulatory and the legal infrastructure for the Islamic capital market. The main aim of this paper is to highlight the legal issues confronting the Islamic capital market due to the sparks created whilst operating it parallel with its counterpart, i.e., the conventional capital market. In this paper, the existing Malaysian legal framework for Islamic Capital Market would be discussed in depth to give the readers a vivid picture of it, and whether regulating is scalded or not, would be discusse

Legal obstacles in Shari’ah corporate governance of Islamic financial institutions in Malaysia

This paper was sent to be published in the Journal of King Abdulaziz University for Islamic Economics. Also, it was presented in different title(1) in the Asia-Pacific Business Research Conference in Malysia, February 2011. The researchers highlighted the significant role of the Shari’ah corporate governance in the effectiveness and stability of Islamic financial Institutions in Malaysia. They outline the roles of corporate governance (in both conventional and Islamic corporation) through which it can be directed, administered and controlled. However, they argue that Shari’ah cooperate governance has different perspective and methodology. The Shari’ah cooperate governance primary is based on the tenet of Islam as the primary law and then on other positive laws, such as laws regulating the interest of the directors and the stakeholders. They described the structure of shari’ah corporate governance in Malaysia in order to emphasize and underscore some legal obstacles in the Shari’ah corporate governance and suggest some practical solutions to reform absence in the law

Guiding principles in developing Shari'ah governance framework for Islamic capital market

Shari’ah compliance is the foundation of the Islamic financial markets, including Islamic capital market. From the beginning, the Islamic capital market (ICM) was developed to support the other two Islamic financial markets such as Islamic Banking and Takaful. Later on, it became the investment avenue for investors looking for Shari’ah compliant investment and financing. Presently, the Shari’ah governance framework and regulations have been implemented for Islamic banks and Takaful. On the contrary, there is lack of similar framework of Shari’ah Governance for the Islamic capital market. Malaysia having positioned itself as a hub of Islamic finance should introduce a Shari’ah governance framework for the Islamic capital market. Thus, the objective of this paper is to provide the principles on which the theoretical Shari’ah governance framework for the Islamic capital market can be developed. These principles are Islamic accountability and responsibility, independence and objectivity, competence, confidentiality and commitment, consistency, Shari’ah audit and review, transparency and disclosure, corporate social responsibility and ethicality. In addition, this paper discusses the Shari’ah governance practices in Indonesia, Bahrain, Pakistan, Kuwait and Malaysia. This write-up will be of interest to individual players, regulators, investors and the public

Islamic accountability and waqf towards achieving equitable distribution of wealth within the Islamic economic framework

The creation and distribution of wealth is a daily activity that we face. There are different ways and approaches in handling issues related to wealth. From the Islamic perspective, economic activities should be solved based on the Shari’ah. It is because we are indebted to Allah for bringing us into this existence and for entrusting us with the resources. Allah is the Creator of everything, including us. Hence, He is the absolute Owner while humans have only delegated ownership as the trustees of Allah. Since humans are not the real owners of the resources; rather they need to utilize the resources entrusted according to the will of the Allah. Humans are also accountable for any misuse of resources which is against the will of the real Owner. In order to discharge the responsibility as trustees of Allah in an accountable manner, humans need to meet the objective of Islamic economics, i.e. to achieve socio-economic justice. In addition, Islam encourages charity and donations, whereas waqf is one way of charity to show gratitude to Allah for what He has bestowed upon us. Waqf can fill the need of the society by providing free education, health services and others. It plays a significant role in achieving the objective of Islamic economy. Therefore, the aims of the paper are to highlight how economic problems are solved in the light of Shari’ah and to what extent waqf can play an important in uplifting the wellbeing of the society. The research method of this paper is based on library research. It is written solely based on secondary data, such as articles, books and online resources. This paper will be to the interest of researchers, donators, regulators and the public in general

Shari’ah risk management framework for Islamic financial institutions

In addition to systematic and unsystematic risks faced by traditional financial institutions, Islamic banks are widely exposed to Shari’ah risks with regards to the needs for ensuring Shari’ah compliance of its operational activities and financial products. In order to mitigate these additional risks, IFIs are urged to establish a comprehensive Shari’ah risks management tool that can help them to monitor their banking, financing and investment activities in conformity with Shari’ah principles and hence enhance their sustainability in the long run. Therefore, the objective of this paper is to contribute to the discussion on the development of the Shari’ah risk management framework for IFIs. This paper refers to Islamic primary sources of knowledge, the Quran and hadith in scrutinizing the permissibility of risk management practices by IFIs. The processes that take place in Shari’ah risk management; (i) risk identification; (ii) risk measurement and; (iii) risk monitoring/controlling are then thoroughly discussed. This paper hopes to shed some light on the importance of having a comprehensive standard of procedures in performing Shari’ah risk management function