The end product is usually of laudable standards and serves as a good yardstick for domestic practices to be benchmarked against. Investor protection The third reason is that a common set of standards facilitates sound regulatory oversight that is based on consistent treatment of cross-border markets and activities. With regulators using the same standards in assessing systems, products and practices, market players that deal with foreign institutions or instruments can take comfort that those institutions and products are regulated based on similar high standards. Efficiency & cost savings And the fourth reason is that the establishment of a set of standards that is subscribed to internationally has the effect of aligning the regulatory practices in different jurisdictions. This allows international financial institutions operating in different markets with similar features and rules drawn up according to international standards, to benefit from lower compliance costs. Given a choice, from the business proposition point of view, few fund managers, issuers or financial advisers would wish to expend resources on compliance systems to keep track of different requirements and procedures in different markets. Much work is already underway to develop international standards on specific subjects. Within IOSCO, MAS is a participant of various of its working groups including the Internet Project Team and the Implementation Committee which, as its name suggests, has been tasked to implement the 30 IOSCO principles of securities regulation. Apart from IOSCO, a number of other fora has also proposed recommendations in their respective areas.

While such a divergence of opinions in Islamic financial transactions is not a new phenomenon, it has presented a new set of challenges in today's increasingly more globalized market. To forge closer linkages between the global Islamic financial markets would require a common understanding and acceptance on the applicable rules and standards. Indeed, cross border transactions would require the jurisdictions involved to mutually recognise the validity of respective rules, practices and underlying Shariah interpretations. This is key for the orderly development and for advancing the pace of progress of the international Islamic financial industry. For this, it is important to have a concerted effort in providing greater clarity on the mutually acceptable strategy for the development of global Islamic finance. In the current globalised environment, the role of scholars needs to transcend beyond pure advisory or Shariah rulemaking, to a more strategic role in charting industry development. This could be in part be achieved by having global Shariah standards for the Islamic financial industry. A mutually agreeable position could be achieved with the application of mutually recognized principles and processes to deduce the Shariah rulings and views. 1  1  There are lessons to be drawn from the previous success stories in the history of Islamic jurisprudence whereby the strong sense of mutual respect prevailed among Muslim jurists with multiplicity of Shariah opinions. The jurists from different mazhab had high regard for differing views expressed by other jurists, even in ibadah matters.