Islamic finance laws reviewed
KUALA LUMPUR: The Law Harmonisation Committee Report 2013 released yesterday documents the current phase of the committee’s initiatives since its inception in 2010.
The high-level committee has been set up to review, harmonise and further strengthen the legal infrastructure to facilitate the conduct of Islamic finance in a bid to reinforce Malaysia’s leadership role in building and maintaining a solid foundation for the development of Islamic finance.
The committee has a mandate to recommend legal reforms that will advance the development of Islamic finance and achieve greater certainty and enforceability of Islamic finance contracts domestically.
A total of nine issues concerning 17 laws were reviewed, it said in a press release. And after extensive consultation and research, recommended amendments were made on four issues, which have been escalated to the relevant Government ministries, departments and agencies.
The first recommendation is to introduce provisions in court rules on the imposition of late payment charges on judgement debts in Islamic financial cases as permitted by the Syariah Advisory Councils of Bank Negara and the Securities Commission.
Further, allowing better access to financing, particularly Islamic financing, for consumers where it involves the charging of reserve lands through recommended amendments to reserve land legislations at all states has also been recommended. Next, the committee will look into facilitating Islamic financing involving landed property through the recognition of Islamic finance in the National Land Code 1965.
And finally, it recommends facilitating the introduction and usage of innovative and more globally accepted Syariah-compliant product structures for the Islamic money market through appropriate modifications in the Companies Act 1965 that would enable a more efficient conduct of collateralised commodity murabahah transactions.
The first recommendation has been fully implemented, while the remaining are in the process of being implemented.
The committee is headed by the former chief justice Tun Abdul Hamid Mohamad.