remains a high - potential market for asian companies. asean - based companies should therefore invest more time and resources to evaluate these opportunities and assess the risks, so as to help fill this demand. in singapore, international enterprise singapore and the singapore business federation ( sbf ) have been playing a vital role in helping our local companies to understand and differentiate middle east markets better and to expand their regional footprint. 9. lastly, many leading middle east financial institutions have established a presence in singapore to offer financial services such as wholesale banking, treasury services, trade finance, and wealth management. these institutions play an important bridging role by guiding companies in the region to expand into the middle east and vice versa. bank muscat, the largest bank in oman, is the latest player to set up in singapore. sustaining the growth of islamic finance 10. as investors and businesses in the middle east and asia seek a wider range and diversity of financing options from banks and capital markets, islamic finance will have to respond to meet their rising needs. national and industry players have to work closely together to address the many challenges faced by islamic finance as it internationalizes into new markets. this morning, let me touch on just three issues, which i am sure you will be discussing in greater depth during the course of the conference. 11. first, there is a fundamental need for further standardization and harmonization of both regulatory and shariah standards across the middle east and asia. the greater use of standardized legal documentation will increase efficiency, certainty, transparency and liquidity. this would allow for easier cross - border offering of financial products that would reach a wider investor base and thereby bring about greater economies of scale and reduce transaction costs. standardisation will also enable better risk management by ensuring that risks are clearly identified and appropriately mitigated between financial institutions and their asian development bank, asian development outlook 2011 ( april 2011 ). economist intelligence unit, “ gcc trade and investment flows : the emerging - market surge ”, 2011. bis central bankers ’ speeches counterparties. shariah scholars and multilateral agencies such as the idb, accounting and auditing organisation for islamic financial institutions ( aaoifi ) and islamic financial services board ( ifsb ) are already working to address these critical issues. as a member of the ifsb, the monetary authority of singapore ( mas ) will work with them in their efforts to allow greater access to an even larger global community, including non - muslim countries. 12. second, we need to

our key stakeholders to raise the level of awareness and understanding of islamic finance, and to enhance the conduciveness of our business environment. i am glad that the sbf and industry players such as the islamic bank of asia, cimb islamic, ocbc bank and allen & gledhill have undertaken to organize business seminars to educate our local companies. 17. to provide greater tax clarity and certainty to the industry, i am pleased to announce today that singapore will issue new income tax regulations for islamic finance. the ministry of finance will provide additional clarification and detailed explanation of the income tax treatment on more prescribed islamic financing arrangements including financing through a partnership arrangement, project finance as well as interbank placement of funds6. this is in the tax circular will cover islamic financing arrangements based on diminishing musharaka ( financing through a partnership arrangement ) and istisna ( project financing ) and interbank placement based on wakala ( agency contract ) and murabaha ( sale at cost - plus ) concepts. bis central bankers ’ speeches keeping with our long - standing principle that shariah - compliant products should not be disadvantaged in terms of regulatory and tax treatment where the economic substance and risks are similar to conventional products. we hope that this will expedite the development of more such financial products in singapore. conclusion 18. to sum up, the middle east and asia continue to present attractive opportunities. both regions need to work closer together to achieve greater synergy and accelerate the global growth of islamic finance. singapore will play its part in this international effort together with our regional and industry partners. 19. i am glad to see more players from middle east and asia participating in this year ’ s summit. i hope that you will take up the challenge to work together to spur the development of islamic finance as a bridge between asia and the middle east. thank you. bis central bankers ’ speeches