Our sukuk market in particular has come a long way since the issuance of the first global sovereign sukuk by Malaysian Government in 2002. Today, it has evolved into the world’s largest Islamic bond market, accounting for more than fifty percent of global sukuk issuances in the first half of 2010. It has attracted the participation of various foreign corporations, multinational corporations and multilateral agencies in raising funds and investing in issuances out of Malaysia. In the latest development, Japan’s biggest brokerage house has recently listed its first US Dollar sukuk on Bursa Malaysia. The strength and competitiveness of our sukuk market in bridging and strengthening financial linkages thus best encapsulates Malaysia’s evolving role as an important international gateway in Islamic finance, particularly in linking the two most dynamic growth regions of South East Asia and the Middle East. Malaysia is committed to, and extensively engaged in, strengthening linkages across borders through Islamic finance. This emerging role is a natural progression of Malaysia’s leadership evolution in driving growth and innovation in the industry. Benefiting from our domestic experience, where we have come to recognize the strength and benefit of Islamic finance early on, Malaysia has taken a proactive role in supporting and contributing to the development of Islamic finance on the global front. We offer a welldeveloped and complete platform for the global financial community to participate in Islamic finance through the development of Malaysia as an international Islamic financial centre (MIFC).

At this stage we also saw the establishment of the National Shariah Advisory Council (SAC), the highest authority on Shariah matters related to Islamic Finance. A tax neutrality policy was introduced for Islamic financial instruments and transactions which has benefited our players, consumers and the development of Islamic finance as a whole. The policy, which was later emulated by many countries around the world, ensures neutrality to tax treatment between Islamic and conventional financial products and services, a move which enhances the attractiveness of Islamic financial products as competitive alternative to conventional banking. The most recent development of Malaysia’s legal infrastructure for Islamic Finance was the enactment of the Central Bank of Malaysia Act 2009. Our Central Bank of Malaysia Act accords formal recognition to the dual financial system practised in Malaysia and our mandate to develop Malaysia as an international financial centre. The Act formally recognizes the SAC as being the highest authority on Shariah issues related to Islamic finance transactions, and the role of the SAC as a consultative body to the Malaysian judiciary system. Most critically, SAC’s rulings are binding on the courts and arbitrators. This referral system preserves the sanctity of Shariah rulings and the consistency in the interpretation and application of Shariah principles for Islamic finance transactions in Malaysia. For adjudication purposes, a dedicated judge in the commercial division of the High Court has been assigned to preside over litigated cases on matters relating to Islamic finance.