Let me now turn to the development of our legal framework, which has been one of the key factors contributing to the competitiveness of Islamic finance in Malaysia. Our legal infrastructure consists of effective regulatory and substantive laws, as well as dedicated adjudicative platforms to undertake legal redresses arising from disputes revolving around Islamic financial transactions. The legal infrastructure in Malaysia evolved in different phases over the years. Our initial focus was to establish dedicated enabling substantive laws for Islamic finance, such as the Islamic Banking Act 1983 and Takaful Act 1984. The enactment of these laws provided the platform for separate regulatory framework for the industry and importantly, established the foundation of the Shariah governance framework through two key provisions. These are the requirements imposed on Islamic banks and takaful operators to ensure that their business aims and operations are Shariah-compliant and the need to form separate Shariah board within their respective institutions. Our experience has shown that dedicated laws governing institutions authorised to conduct Islamic finance are critical elements in instilling and maintaining public confidence in the system. After establishing the necessary legislative measures to establish a more conducive environment for Islamic finance to thrive, the next phase was aimed at creating the critical mass which was essential to develop Islamic finance in Malaysia. Amendments were made to the Banking and Financial Institutions Act 1989 to allow the conventional banks to operate Islamic windows which brought about new players in the industry.

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).