Regulating Islamic Finance in the UK: Issues and Possible Solutions
Minhat, Marizah; Dzolkarnaini, Nazam
This chapter reveals critical issues and risks in relation to the regulatory strategies for Islamic financial market in the UK. It is argued that improper regulation would expose the Islamic financial market to (1) sharia compliance risk, (2) restrictive practice of Islamic finance ethics, (3) becoming a façade for conventional financial practices and (4) a lack of transparency that raises legal uncertainty and risk. Recognising the distinctive characteristics of Islamic finance, this chapter critically evaluates the existing regulatory strategies and offers suggestions for improvement. It proposes that regulators introduce standardised rules on sharia supervision, facilitate the growth of mudarabah capital as equity capital, and refine accounting and disclosure rules that properly account for murabahah transactions and complex Islamic securities, such as sukuk. This proposal is consistent with the goals of financial regulation to protect consumers and investors as well as to promote financial stability and market efficiency.
Minhat, M., & Dzolkarnaini, N. (2021). Regulating Islamic Finance in the UK: Issues and Possible Solutions. In M. Minhat, & N. Dzolkarnaini (Eds.), Ethical Discourse in Finance - Interdisciplinary and Diverse Perspectives (171-200). Cham, Switzerland: Palgrave Macmillan. https://doi.org/10.1007/978-3-030-81596-7_9
|Online Publication Date||Oct 26, 2021|
|Publication Date||Oct 26, 2021|
|Deposit Date||Oct 26, 2021|
|Series Title||Palgrave Studies in Impact Finance|
|Book Title||Ethical Discourse in Finance - Interdisciplinary and Diverse Perspectives|
|Keywords||Islamic finance; Regulation; United Kingdom; Mudarabah; Murabahah; Sukuk|
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