DFSA Calls for Comment on Islamic Finance Legislation

The Dubai Financial Services Authority (DFSA) today released a consultation paper on the proposed legislation that will govern Islamic financial operations in the new Dubai International Financial Centre (DIFC).

‘The new draft Islamic Finance Law and Rulebook module are key components of the Financial Services legislation for the DIFC. Together with the specific prudential requirements already set out in our integrated prudential rules, they will provide a comprehensive regime for all aspects of Islamic Financial Business conducted in or from the DIFC’, DFSA Chief Executive, Mr Phillip Thorpe said.

The paper calls for comment on two new pieces of draft legislation:

• the Law Regulating Islamic Financial Business, which creates the regulatory framework for the conduct of Islamic Financial Business in or from the DIFC; and
• the Islamic Financial Business (ISF) module of the DFSA Rulebook, which sets out the requirements for an Authorised Firm Undertaking Islamic Financial Business.

It also details amendments that will be made to other modules of the DFSA Rulebook as a consequence of the new Law and Module being enacted.

‘In accordance with the DFSA’s commitment to drafting legislation to the highest international standards, preparing the Law and Rulebook module has involved discussions with international organisations such as AAOIFI, the Accounting and Auditing Organisation for Islamic Financial Institutions, and the IFSB, the Islamic Financial Services Board; as well as with firms who currently provide Islamic financial services’, Mr Thorpe said.

‘We now seek comments from industry and the public about the proposed legislation, and urge all those who have an interest in the matter to submit their comments before 6 July 2004’, Mr Thorpe said.