Regulatory Impediments to Islamic Finance : The UK and Australia Compared

Abstract

The purpose of this paper is to contrast regulatory impediments to Islamic finance in the UK and Australia in relation to providing Islamic finance products, and also to consider how the relevant laws of Australia may be improved in light of the English laws with the aim of promoting a level playing field. To this end, it reviews Islamic finance laws in both UK and Australia, and examines the measures that are in place to protect stakeholders who use funds provided by Islamic financial services providers (IFSPs). Having been compared the relevant laws of the two countries the study concludes that Australian law pertaining to Islamic finance industry could be improved by removing regulatory barriers to the industry and helping it to improve awareness. The paper attempts to make comparison of English and Australian Islamic financial transactions to promote a level playing field for stakeholders. It recommends that since the principles of Islamic finance differ from its conventional counterparts a separate legal framework should be established to facilitate its growth and development in the Australian financial market.