Following the consultation conducted by the MFSA with respect to the introduction of Islamic Finance in Malta, the local regulator has set up an expert group in order to identify and discuss the regulatory changes which need to be introduced into local legislation in order to position Malta as an ideal jurisdiction for the set up of Sharia compliant funds, credit institutions and other financial services providers.

The expert group will discuss changes necessary to local legislation as well as any amendments which need to be introduced in the context of local financial services regulation. The expert group will also propose new legislation and regulation where it deems fit.

The Islamic economic model is built upon the principle of fairness, and while recognizing the importance of the creation of wealth, emphasizes social justice and ethical behaviour. The Islamic model thus prohibits usury, the collection and payment of interest, and investment in endeavours which are contrary to Islamic values, such as pornography and alcohol.

While some of the values held by Islamic Finance are known to the local regime, embracing familiar notions of ‘ethical investment’, the manner in which Sharia compliant transactions are structures necessitates a number of changes to Maltese law in order for the jurisdiction to be optimal for such endeavours. The efforts conducted by the local authorities will ensure that the country is well placed to serve as a domicile of choice for Islamic Finance in the near future.
 

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