Summary Article - Regulatory Framework of Shariah Governance System in Malaysia, GCC Countries and the UK

The article discusses about the governing foundation of shari’ah authority in Malaysia, GCC Countries and United Kingdom. It was suggested that the different countries imposed different degree of guidelines and regulation based on their degree of shariah implementation and business perception. The study grouped the countries into five (5) different types of approach which are (1) reactive approach – non Islamic legal environment such as UK and Turkey, (2) passive approach – shariah governance model and exclusively for Saudi Arabia, (3) minimalist approach – GCC except Saudi Arabia and Oman, (4) pro-active approach - Malaysia and (5) interventionist approach – unique for Pakistan.

In the second section, the article discuss in details for each three regions regarding the regulatory overview as a bird angle perspective in understanding the regulation environment of the country. To get closer, the discussion next focus into the shariah implementation for each region in which the country can be categorized into regulated environment and self-regulatory environment.

In the final section, the article highlighted the issue of regulatory. In this part the discussion generally focus on the legal status of shariah pronouncement, the conflict of laws, the court jurisdiction, the differences of shariah resolution and the authority of the shariah board either executive, advisory or supervisory.

The paper suggested :-

1. That the shariah board should be given the supervisory and advisory right in addressing the shariah issues in IFI thus the members may give a full ideas and power toward the truly shariah 
2.   That the IFIs are indeed required a complete legal framework and real shariah governance.
3. To have a thorough study about the possibility in implementing AAOIFI standards and IFSB guidelines.
4. The existing regulatory framework needs to further enhance and improve concurrent to the development of IFIs.

Reference

Zulkifli Hasan (2010), Regulatory Framework of Shari’ah Governance System in Malaysia, GCC Countries and the UK, Kyoto Bulletin of Islamic Area Studies , 3-2 (March 2010), pp. 82 -115