LOFSA Issues Islamic Finance Guidance For Offshore Institutions
The Labuan Offshore Financial Services Authority (LOFSA) has issued a circular
to the jurisdiction's finance industry outlining new guidance on the format
for submission of Islamic product instruments. The guidance aims at standardising information submitted by offshore financial
institutions for approval and endorsement by LOFSA and the
Shariah Advisory Council (SAC). Efforts are continuing to be directed at further developing Islamic banking
in Labuan, in line with the strategic move to promote Islamic finance in the
Labuan IOFC and to tap into the large pool of investible wealth in the Middle
East which is estimated at some $1 trillion. In 2005, there were three full-fledged Islamic offshore banks and three Islamic
investment banks operating in Labuan. As at end-2005, the total Islamic banking
assets of the industry, including those of conventional offshore banks with
Islamic windows, accounted to USD708.9 million (2004: USD678.7 million), and
represented 3.9% of the total assets of the offshore banking industry (2004:
3.4%). LOFSA is also keen to develop Labuan as a major centre of Islamic reinsurance,
and the regulator is developing a framework to allow more conventional reinsurers
to establish a retakaful division in Labuan. .
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