as investment intermediaries through the offering of investment accounts in addition to the entrenched deposit products, in which various modes of risk - sharing contracts can be applied. this is supported by the legal recognition of investment accounts in the islamic financial services act 2013 ( ifsa ). it provides a differentiation between the deposit account and the investment account which offers a new investment avenue that caters for a wider range of investor risk - return preferences. in contrast to the deposit account, these funds are being channelled directly to finance entrepreneurship in productive activities. in promoting entrepreneurship and value - creating activities, it also contributes towards generating growth and enhances the prospects for job creation. additionally, the investment account platform ( iap ) that is currently being developed will provide a centralised multi - bank platform as a new financing option for entrepreneurs with viable projects as well as an opportunity for the investing public to finance these projects. it is encouraging that to date, eight islamic banks are offering investment accounts to their customers. more are expected to follow when the value proposition of such investment accounts, with its unique features and the different target market become better understood. the industry - led communication by the association of islamic banking institutions malaysia will contribute towards increasing the awareness of customers on the concept and on the key features of investment account. the latest establishment of a consortium developed by four islamic banks to develop and operate the iap which is to be launched next month is also another initiative to advance this new offering. in the development of the investment account, it will be essential for islamic banks, investors and entrepreneurs to embrace the different approaches in the management of the risk and return relationships that are embedded in the variations of the shariah contracts used in such investment accounts. these relationships need to be well understood by the parties involved and which are aligned with clear contractual and operational requirements. the ifsb has an important role in not only providing guidance but also in initiating the convergence of the different practices between ifsb members with regard to the treatment of the investment account – also referred to as profit sharing investment account ( psia ) – in the ifsb standards. more in - depth work can also be explored by the ifsb on the prudential requirements for the investment account to further ensure a conducive environment for such risk - sharing offerings. the global islamic financial system is now operating at a time when the international economic and financial environment has become immensely more challenging. new risks that are more complex, with more profound systemic implications are emana

zeti akhtar aziz : building a sound global islamic financial system opening remarks by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the islamic financial services board ( ifsb ) – meet the members & industry engagement session, kuala lumpur, 28 january 2016. * * * it is my pleasure to welcome you to this industry engagement session organised by the ifsb. since its introduction in 2012, these sessions have drawn encouraging response from the members and the industry. such an interface between the regulators, industry and the ifsb has become even more important in the current environment in which greater global attention is being accorded to the reform of prudential regulations. the strengthening of such an interface provides an important platform for building greater understanding on the expectations, issues and areas of concern amongst the regulators, the industry and the ifsb. with more than a decade since the inauguration of the ifsb in november 2002, the ifsb has built a solid global reputation as a prudential standard - setting body for islamic finance. its achievements also include initiatives to increase international regulatory cooperation, to encourage uniformity of regulatory frameworks and the efforts to enhance the monitoring of financial risks in the islamic financial system. the enhanced stability and resilience of the current global islamic financial system is reinforced by its vibrant growth and its increasing internationalisation and integration into the international financial system. this is a realisation of the aspirations and vision of the ifsb founding members. the ifsb has also made significant advancements in taking forward the recommendations made in the islamic finance and global financial stability report 2010 towards achieving financial stability in the national and the international islamic financial system. the prudential standards including that for liquidity management issued by the ifsb takes into account the unique characteristics of islamic finance and are also designed to not impose any regulatory burden while upholding the financial stability agenda. the effective implementation of the standards issued by the ifsb is key towards promoting the soundness and stability of islamic financial institution. to enhance this prospect, the ifsb has strengthened its role in facilitating greater jurisdictional preparedness in the adoption of these standards through the provision of technical assistance to its members. malaysia is one of the jurisdictions that has adopted and operationalised the prudential standards and the guiding principles that have been issued for the industry. the implementation of these standards and guiding principles support the regulatory framework that we now have in place in our islamic financial system. as the industry is