With investors globally holding more than $1.5 trillion in Shariah-compliant investments, there is a need to create adequate and straightforward regulation for Islamic investment instruments that industry players can use to grow their activities, a senior official at the Central Bank of Bahrain (CBB) said recently.
"In addition to adequate regulations there is a need for creating the necessary framework for investment instruments targeting small investors, medium size investors, as well as professional or high net-worth individuals, who would like to invest their funds in accordance with Shariah principles," said Abdul Rahman Al-Baker, executive director of financial supervisions at the CBB.
"There is a need for the Islamic financial institutions to develop strategic alliances with other financial institutions globally, especially in the products structuring and offerings, as the formation of such alliances will help to achieve economies of scale and improve the services across the Islamic investment industry," said while addressing a conference titled "Islamic Investments: Shifting Gears."
"It is also important to adopt proper corporate governance in the Islamic investment industry in order to improve the confidence of the investors. This includes having proper disclosures requirements, adequate disclosure of all terms and conditions of Islamic products-including fees and charges as well as transparency in disclosing financial information and indicators. "Now in its fifth year, the conference is clearly establishing itself as an important event in the Islamic finance calendar," said Al-Baker, who opened the two-day Annual World Islamic Funds and Capital Markets Conference at Gulf Hotel recently.
Currently, there are more than 500 funds globally that comply with Islamic principles, of which one third were launched during the past two years.
