Islamic Finance

Dubai, Malaysia, to cooperate on fintech, Islamic sector ’of particular interest’

| 13 September, 2017
Dubai, Malaysia, to cooperate on fintech, Islamic sector ’of particular interest’

Dubai Financial Services Authority (DFSA) and Securities Commission Malaysia (SC) have signed an agreement to cooperate in the development of fintech innovation, DFSA said in a statement yesterday.

The agreement involves the sharing of information and the intent to consider participating in joint innovation projects on the application of new fintech approaches in their respective markets.

According to DFSA, the agreement includes a focus on Shariah-compliant fintech. “Given the significance of Islamic finance in both Malaysia and Dubai, fintech developments in that sector will be of particular interest,” said the statement.

The agreement also provides a framework for cooperation between the innovation functions of each authority, and sets out a referral mechanism to enable the authorities to refer innovator businesses between their respective innovation functions. Regulatory guidance will also be provided to the businesses, said the statement.

DFSA is the financial regulatory agency of the free zone the Dubai International Financial Centre (DIFC). In August, it became the first regulator in the Gulf Cooperation Council (GCC) to launch guidelines for loan and investment crowdfunding platforms. In the same month, the accelerator FinTech Hive at DIFC was launched. In May, DFSA launched its fintech regulatory sandbox, the so-called Innovation Testing Licence, in May this year. The regulator issued its first peer-to-peer (P2P) lender licence in March to Beehive, a Shariah-compliant platform.

SC regulates Malaysia's capital markets. It released equity crowdfunding guidelines in February 2015 and introduced its regulatory framework for P2P financing in April the following year. In 2016, it issued licences for six equity crowdfunding and six P2P financing platforms. Bank Negara Malaysia, the country’s central bank, approved four fintech firms as participants in its regulatory sandbox in June this year.

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