Islamic finance Infrastructure Tariqullah Khan

Financial infrastructure comprises of the resources, support, protection, facilities and utilities that make the use of architecture beneficial for developing an inclusive, dynamic and resilient financial system just like water, electrical, lighting, heating, communication, furniture etc., in a building that make the utilization of the building’s full capacity possible

Financial infrastructure shall be seen as work in progress and must be subjected to continuous improvement just like the water, electrical, lighting, heating, communication, furniture etc., in a building that need maintenance and improvement

Pillar 1 Pillar 2Pillar 3 The 5 Pillars of financial infrastructure Legal & regulatory infrastructure Transparency & governance infrastructure Systemic liquidity infrastructure Pillar 4 Pillar 5 Human resources R&D infrastructure Shariah governance infrastructure

Pillar 1 Pillar 2Pillar 3 Legal & regulatory infrastructure Transparency & governance infrastructure Systemic liquidity infrastructure Pillar 5 Pillar 6 Human resources R&D infrastructure Shariah governance infrastructure □banking & company laws, □contracts, □property rights, □insolvency and creditor rights regime, □financial safety nets, □regulatory & supervisory regimes

Pillar 1 Pillar 2Pillar 3 Legal & regulatory infrastructure Transparency & governance infrastructure Systemic liquidity infrastructure Pillar 5 Pillar 6 Human resources R&D infrastructure Shariah governance infrastructure □monetary & financial policy transparency and neutrality, □corporate governance, accounting and auditing framework, □disclosure regime & market monitoring arrangements such as credit ratings, and credit reporting systems

Pillar 1 Pillar 2Pillar 3 Legal & regulatory infrastructure Transparency & governance infrastructure Systemic liquidity infrastructure Pillar 5 Pillar 6 Human resources R&D infrastructure Shariah governance infrastructure □monetary and exchange operations, □payment and securities settlement systems, □ microstructure of the money, exchange and securities markets

Pillar 1 Pillar 2Pillar 3 Legal & regulatory infrastructure Transparency & governance infrastructure Systemic liquidity infrastructure Pillar 4 Pillar 5 Human resources R&D infrastructure Shariah governance infrastructure □literacy, educational, training, certification programs, □research, advisory services & product development, □Shariah governance competencies, □information services

Pillar 1 Pillar 2Pillar 3 Legal & regulatory infrastructure Transparency & governance infrastructure Systemic liquidity infrastructure Pillar 4 Pillar 5 Human resources R&D infrastructure Shariah governance infrastructure □Legal protection for Shariah supervision, □arbitration & reconciliation framework, □governance of Shariah supervision, □central Shariah advisory board, □licensing of Islamic financial

Stakeholders Macro Level Meso Level Micro Level Users of services Authorities concerned with legal, regulatory and tax framework and policies Knowledge, educational, capacity building, information and advisory services and providers Financial services and the institutions and markets providing them Uses and users

Users of financial services Individuals, families and households International and domestic traders Non- financial businesses International organizations Governments and government agencies Not-for-profit organizations Financial businesses

Payments and remittance services Equity issuers Micro & special finance services Debt instrument issuers Investment & Strategy advisory services Insurance companies Other non- banking financial institutions Banks (deposit taking institutions) Fund managers Micro level components of financial services & their development

Meso level components of financial sector development Markets and market micro structures Physical and ITC infrastructure Training and capacity building Data and information services Education & literacy services Rating services Services of associations of service providers and users Legal and advisory services Best practice standard & standard setters

Markets and market micro structures Foreign exchange markets Government debt markets Money markets Quasi debt markets Private debt markets Equity and share markets

Macro level components of FSD Investors rights regimes Corporate governance framework Lender of last resort framework Property rights Judiciary & arbitration Macro economic policy framework Tax framework Regulatory & supervisory framework Legal framework