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Saturday, 29 March 2008

Syariah jurisdictions urged to cooperate

KUALA LUMPUR (The Star, 28/3/08): The various syariah jurisdictions have to work together or come up with ways to “talk” to each other to manage the growth of the Islamic capital markets, which is seeing the value of financial instruments reach US$150bil today.
SHAPE Financial Corp president and chief executive officer Abdulkader Thomas said the differences in interpretation were not an impediment but boiled down to how well the different jurisdictions cooperated with each other.
“It’s something that they’ll have to learn to manage,” he told reporters at the inaugural International Islamic Capital Market Forum organised by the Securities Commission (SC) yesterday.
Abdulkader said there had been a lot of experimentation in the development of Islamic financial instruments in the past five to 10 years that had led to further exploration in their implementation through various jurisdictions in the Islamic world.

“For example, in ijarah (leasing), we’re seeing agreement in almost all jurisdictions while in the Gulf Cooperation Countries, there’s broad convergence in musyarakah (profit-sharing),” he said, adding that convergence had been taking place over time and would accelerate as various Islamic financial instruments such as sukuk achieved a certain mass.
Syariah scholar Dr Mohamed Ali Elgari said the differences were not an impediment to the growth of Islamic financial instruments but presented an opportunity.
“As long as all Muslims agree that the best principles are the same, they can come to a consensus and help each other in solving the problems that arise as well as help in standardising issues and positions,” he said.
He said one of the avenues in which convergence had been enhanced was through the setting up of branches of Middle Eastern financial institutions in Malaysia, which is recognised as a leader in the Islamic capital markets.
Deputy Finance Minister Datuk Ahmad Husni Hanadzlah was the keynote speaker at the forum, during which two memoranda of understanding were signed between SC and Universiti Sains Islam Malaysia (USIM) on the one hand, and Universiti Malaya (UM) on the other.
The MoU with USIM will facilitate the compilation of syariah rulings from around the world while the one with UM is to facilitate a visiting scholar programme.

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