What initiatives is Singapore taking to support the development of Islamic finance?
We are trying our best to understand the market. We are a new player and are learning the ropes, and we are in touch with the institutional players to find out what we need to do. So the first thing we did was to take a look at our own internal regulations, taxes and remove all the obstacles. Because of the special nature of Shari’ah-compliant products, sometimes they end up being given different treatment to conventional products under the tax or regulatory region. So our first step was to try and resolve this so that they are not disadvantaged. By and large, I think this has been achieved over the last two or three years. The second thing was in response to the financial institutions, especially with Middle Eastern banks when their branches here needed to meet capital requirements: they needed something that is Shari’ah-compliant and there are not so many instruments, so the Singapore Government decided to put up sovereign Sukuk so that banks can subscribe to this and use it as part
