HKMA and the DIFC Authority sign Memorandum of Understanding to co-operate in the areas of Islamic Finance and Financial Infrastructure.

HKMA and the DIFC Authority sign Memorandum of Understanding to co-operate in the areas of Islamic Finance and Financial Infrastructure

The Hong Kong Monetary Authority (HKMA) and the Dubai International Financial Centre Authority (DIFC Authority) signed a Memorandum of Understanding (MOU) on 20 May 2008 aimed at fostering co-operation in the development of Sharia-compliant financial products and the financial infrastructures in their respective jurisdictions.

The MOU sets out the framework agreed between the HKMA and DIFC Authority regarding the co-operation, communication and sharing of information in the following areas:

 Development of Islamic finance in the Dubai International Financial Centre (DIFC) and Hong Kong, including the exchange of advice on the development of legal and regulatory frameworks and the standardisation and harmonisation of standards Promotion of training and educational programs and the facilitation of dialogue between and with Sharia Boards and Sharia Scholars Exploration of ways to foster Islamic financial activities on a cross-border scale between the DIFC and Hong Kong, such as trading of sukuk and other Sharia compliant financial instruments Development of payment systems Technical co-operation and linkages between each party's financial infrastructure developments Joint studies on the extent to which each party's financial infrastructure can support financial infrastructure development in the other party's jurisdiction, particularly with regard to cross-border financial activities Joint workshops, seminars and conferences in support of the activities referred to above

"The signing of the MOU between the HKMA and the DIFC Authority marks an important milestone in co-operation between the two organisations," said Mr Eddie Yue, Deputy Chief Executive of the HKMA. "I am confident that the MOU will enhance the co-operation between the HKMA and the DIFC Authority, particularly in the development of Islamic finance, which in turn will benefit Hong Kong as an international financial centre."

Nasser Al Shaali, CEO, DIFC Authority said: "As the global Islamic finance industry enters a new phase of dynamism, this MOU between the DIFC Authority and the HKMA will contribute to vitalising this sector in both our markets. It will enable us to find innovative solutions for critical issues by promoting shared expertise and consultation with industry. I am also confident this framework of co-operation will promote Islamic financial activities between DIFC and Hong Kong particularly in the trading of sukuks and other Sharia-compliant instruments. Furthermore, this MOU gives us an opportunity to enhance co-operation between our financial infrastructures, in particular the payment systems, of the two regions."

The fastest-growing financial centre in the world, the DIFC is home to over 600 companies that include the world's leading financial services companies and banks. Over the last four years, DIFC has emerged as a gateway to the growing financial market in the Middle East region and a key player in the global financial industry. The DIFC offers its member institutions incentives such as 100 per cent foreign ownership, zero tax on income and profits and no restrictions on foreign exchange. Companies also benefit from modern infrastructure, operational support and business continuity facilities of uncompromisingly high standards.

[c] 2008 Al Bawaba (www.albawaba.com)