institutions have made a more harmonised and integrated approach to regulation more urgent. consistent regulatory treatment for similar products and activities will help level the playing field ; it will also lower compliance costs by streamlining relevant regulations and reporting requirements across activities. as an integrated regulator, mas has made significant progress in harmonising regulation. recent and ongoing efforts have focused on the areas of licensing and capital adequacy. on licensing, there have been two major initiatives : the new securities and futures act ( sfa ) and the new financial advisers act ( faa ). public consultation documents and draft legislation of the sfa and faa were released in march 2001. the bills will be tabled in parliament soon and are expected to be enacted by the end of this year. the sfa rationalises and consolidates into a single comprehensive legislation the securities industry act, futures trading act, and provisions in the companies act related to capital raising. it introduces a single, modular licensing regime for securities and futures intermediaries, which will enhance competition and lower compliance costs. the new legislation will also reflect initiatives that take into account industry developments brought on by globalisation and technological advancements. the faa provides a single licensing regime and a more flexible and integrated regulatory framework for entities engaging in financial advisory activities for all investment products, and facilitates the setting of consistent professional standards across the industry. similarly, consistent business conduct standards will govern the sale of unit trusts and life insurance across financial institutions licensed by mas. with the proposed streamlining in licensing, financial institutions and market participants will no longer need different licences to undertake different classes of financial activities. however, they have to abide by common regulatory standards relevant to the financial activity they engage in, including activities where they are exempted from holding licences. on capital adequacy, mas is putting in place across the financial sector a risk - based framework based on common principles and objectives. the existing capital frameworks for insurance companies, securities dealers, and futures brokers, are being revised, so as to move towards a risk - based approach, not dissimilar to banking. in insurance, industry working groups are looking into the valuation and solvency framework for both life and general insurance business. in securities and futures, mas has been working with the singapore exchange to establish a risk - based capital adequacy framework for licensed securities dealers and futures brokers. this framework will allow the brokers to better manage the risks they face, in the light of market and product

njuguna ndung ’ u : islamic finance – the african experience remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the 2nd gulf african bank annual east & central africa islamic conference, nairobi, 3 – 4 may 2010. * * * suleiman shahbal, chairman, gulf african bank ltd ; najmul hassan, chief executive officer, gulf african bank ltd ; board members ; distinguished guests ; ladies and gentlemen : i am delighted and honoured to be here this morning to preside over the opening ceremony of this important conference. to start with, let me extend a very warm welcome to all of you who are attending this 2nd gulf african bank annual east and central africa conference titled “ islamic finance : the african experience ”. allow me in particular to extend a special hand of welcome to the international participants “ karibuni kenya ”. i also wish to convey the apologies of the governor, professor njuguna ndung ’ u, who would have wished to personally preside over this occasion but had to attend to other engagements. i will make some remarks that reflect his strong views on islamic finance and extend his best wishes for fruitful deliberations at the conference. the conference is important as it offer opportunities for the banking and financial sector fraternity to meet and discuss emerging industry developments, to learn from their accomplishments and challenges and to share views on sound practices. islamic finance is so far the fastest growing segment in the global financial industry. despite the global financial crisis, islamic finance has demonstrated strong growth with new areas of business such as mutual funds and takaful industry attracting a lot of attention. we need to understand this business model that will support our relative comparative advantage in the eac region. kenya was the first country in the east and central african region to introduce islamic banking. in this regard, two banks were licensed in the last two years to exclusively offer shariah - compliant products with many other conventional banks establishing a window specifically for shariah - compliant products. with this, i am proud to inform this gathering that the concept of shariah complaint banking has emerged as an alternative vehicle for mobilisation and supply of finance. for example, the two banks have already contributed in development agenda of the country by participating in shariah - compliant ( sukuks ) components of infrastructure bonds issued by the central bank of kenya on behalf of the government of kenya. we are still waiting for “ structured sukuk