Another sign of the UK's intention of becoming an international hub for Islamic finance is the signing on Wednesday of a memorandum of understanding (MoU) between Bank Negara Malaysia (central bank of Malaysia) and the UK Trade and Investment (UKTI), to establish a collaborative framework to promote mutual cooperation in the area of Islamic finance.At the signing in London by Zeti Akhtar Aziz, governor of Bank Negara, and Sir Andrew Cahn, the chief executive officer of UKTI, there was some surprise that the MoU was between the Malaysian regulator and the UK trade promotion entity, and not with the equivalent UK financial services regulator, the Financial Services Authority (FSA). This ambivalence in the UK Islamic finance policy and the reluctance of the FSA to be seen to be encouraging the facilitation of Islamic finance in the UK is puzzling to many market players in the sector especially from the Middle East and Southeast Asia.
The agreement, according to Bank Negara, will pave the way for Malaysia and the UK to strengthen cooperation in the development of talent and expertise, business linkages and infrastructure support in Islamic finance. It will also facilitate the exchange of resources in the development of human capital and promote mutual recognition of common standards in Islamic finance transactions.
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