INTRODUCTION• Chaired by the Governor of Bank Negara Malaysia, the

MIFC Executive Committee acts as a single coordinating body to provide direction and ensure smooth implementation and efficient delivery of all MIFC-related initiatives.

• The committee comprises of top officials from relevant Government agencies, financial and market regulators, together with industry participants from the Islamic banking, takaful and capital market community in Malaysia.

• Membership to the Committee is based on appointment by His Honourable Prime Minister of Malaysia.

• On 14 August 2006 the Malaysia International Islamic Financial Centre (MIFC) initiative was launched to position Malaysia in the forefront of Islamic finance to capture one of the fastest growing economic sectors.

• Chaired by the Governor of Bank Negara Malaysia• The MIFC is supported by Bank Negara Malaysia, Securities

Commission Malaysia , Labuan Financial Services Authortiy and Bursa Malaysia.

• The MIFC’s private sector partners include Islamic banks and conventional banks with Islamic banking windows, investment banks, brokers, lawyers, Shariah advisory firms, Shariah scholars, accounting and tax advisers, ratings agencies and takaful providers.

HISTORY

Objectives of Malaysian Islamic Financial Centre (MIFC)

As one of the key intermediation linkages

in the global market place

MIFC have an important role in accelerating the process of bridging and

strengthening the relationship between

the international Islamic financial

markets and thereby expand the investment

and trade relations

In promoting capital and cross-border trade

flows between the financial communities

of these regions.

ROLE

S O

F M

IFC To act as an investment gateway to the

region specialising in Islamic fund and wealth management and as a takaful and

retakaful centre.

Significant developments in Malaysian economic and Islamic financial industry.

To act as a centre for origination, issuance and trading of Islamic capital market and

treasury instruments such as sukuk.

The MIFC initiative comprises a community network of the country’s financial sector regulators, including :

Takaful

Securities Commission Malaysia

Bank Negara Malaysia (Central Bank of Malaysia)

Re- Takaful

Capital Market Institution

Professional ancillary services companies which are participating and working collaboratively in Islamic finance

Human capital development institutions

Government ministries and agencies together with industry participation from the banking

Labuan Financial Services Authority and Bursa Malaysia (Kuala Lumpur Stock Exchange)

The MIFC Platform• Diverse pool of global and domestic players in

islamic finance• Wide range of innovative islamic financial

instruments

Comprehensive and competitive islamic financial

market

• Over 60% of outstanding sukuk globally• Pioneer in innovative structure • Wide investor base• Issuance facilitative framework

Sukuk hub

• Robust world class legal and regulatory framework• Well-developed shariah governance• Efficient dispute resolution mechanism for matters

islamic finance

Pioneer islamic legal, regulatory

and shariah infrastructure

The MIFC Platform

• Expertise in research and advisory• Thought leadership in applied islamic

finance• Islamic pool of high caliber professionals

Quality human capital

development infrastructure

• Strong economic fundamentals• Supportive government policies• Affordable cost of living• Multilingual and educated workforce

Conducive business

environment

Governance structure

• Executive Committee

The MIFC Executive Committee acts as a single coordinating body to provide direction and to act collectively in the implementation of

recommendations.

Function of Executive committee as a body to review existing policies for the comprehensive and

coordinated promotion of the MIFC initiative, to align the roles and responsibilities of the respective parts of

Government and the industry for the development of the MIFC initiative.

• Secretariat

The MIFC Secretariat functions as the working secretariat to the MIFC Executive Committee (the Committee).

The MIFC Secretariat functions as the single contact point on Islamic finance related matters, including the followings:

Application to establish International Islamic Banking (IIB) and International Takaful Operator (ITO)

Application to establish International Currency Business Unit (ICBU) Immigration matters for foreign Islamic finance professionals and their

dependants Foreign equity ownership and tax related matters

CONCEPT OF TAKAFUL• The principles of guarantee, derived from the word “Kafala”, is

the basis of Islamic insurance for example is Takaful.• Takaful means that the majority guarantees the loss of the

minority for example the majority shares the burden of the unfortunate minority via the pooling of funds.

• This form of co-operative insurance is already in existence in several countries, permissible by Shariah.

• Takaful practice the concept of “Tabarru’” meaning donation, which explicitly mentions that the money collected is to be used for the purpose of assisting “fellow participants who require assistance according to the terms agreed as long as these terms are not in conflict with the Shariah”.

Takaful Companies

• AmFamily Takaful Berhad• Etiqa Takaful• Hong Leong Tokio Marine Takaful• MAA Takaful Berhad• Prudential BSN Takaful• Sun Life Malaysia Takaful Berhad• Takaful Malaysia

CONCEPT OF RETAKAFUL• Retakaful is the Islamic alternative to the reinsurance

industry. In the conventional insurance industry, an insurance company reduces its risk of paying large claims by insuring a portion of its risk with another insurance company. The third party is called a reinsurer, and it helps the insurance company in situations involving natural disasters, widespread fires, riots, and other major events that significantly affect many policyholders at once.

RE-TAKAFUL COMPANIES

• ACR ReTakaful• BEST RE• MNRB Retakaful• Munich Re Retakaful• Swiss Re takaful

CONCLUSION• Malaysia has succeeded in implementing a dual banking system

and has emerged as the first nation to have a full-fledged Islamic system operating side-by side with the conventional banking system. The aspiration to establish a comprehensive Islamic banking and finance system has created a spill-over effect to the non-bank Islamic financial intermediaries which started to offer Islamic financial products and services. Such institutions include the takaful companies, the savings institutions for examples Bank Simpanan Nasional & Bank Rakyat and the developmental financial institutions for examples Bank Pembangunan dan Infrastruktur Malaysia and Bank Pertanian.