CIFE UAE Islamic Finance Framework 1 — Questions and Answers
Question 1: Which UAE legislative framework established the legal basis for Islamic banking operations in the country?
- UAE Federal Law No. 6 of 1985 on Islamic Banks, Financial Institutions and Investment Companies, as updated by subsequent CBUAE regulations (Correct answer)
- Dubai Law No. 13 of 2008 on Mortgage Finance only
- Federal Decree No. 76 of 2023 on Banking Licensing only
- Abu Dhabi Global Market Companies Regulations 2015
Correct answer: UAE Federal Law No. 6 of 1985 on Islamic Banks, Financial Institutions and Investment Companies, as updated by subsequent CBUAE regulations
Federal Law No. 6 of 1985 established the legal framework for Islamic banking in the UAE, providing the foundational legislation for the establishment and regulation of Islamic financial institutions across all emirates.
Question 2: Which UAE body is the primary regulator of Islamic banks operating in the UAE mainland?
- The Central Bank of the UAE (CBUAE) (Correct answer)
- The Securities and Commodities Authority (SCA)
- The Dubai Financial Services Authority (DFSA)
- The Financial Intelligence Unit (FIU)
Correct answer: The Central Bank of the UAE (CBUAE)
The CBUAE is the central regulatory authority for all banks operating in the UAE mainland, including Islamic banks, setting licensing requirements, prudential standards, and Shariah governance rules.
Question 3: What is the UAE's 'Higher Shariah Authority' and what is its role?
- A body established by the CBUAE comprising senior Islamic scholars to issue binding Shariah standards and fatwas for UAE Islamic financial institutions, ensuring national Shariah harmonisation (Correct answer)
- A commercial Shariah advisory firm hired by banks individually
- A political body within the UAE government
- An AAOIFI sub-committee based in Bahrain
Correct answer: A body established by the CBUAE comprising senior Islamic scholars to issue binding Shariah standards and fatwas for UAE Islamic financial institutions, ensuring national Shariah harmonisation
The CBUAE's Higher Shariah Authority (HSA) was established to provide centralised, binding Shariah rulings for UAE Islamic financial institutions, promoting consistency and reducing the fragmentation caused by different SSBs issuing contradictory rulings.
Question 4: Which UAE free zone is a global hub for Islamic finance, hosting Islamic banks, Sukuk listings, and Islamic investment companies?
- Dubai International Financial Centre (DIFC) (Correct answer)
- Abu Dhabi Global Market (ADGM)
- Jebel Ali Free Zone (JAFZA)
- Sharjah Airport International Free Zone (SAIF)
Correct answer: Dubai International Financial Centre (DIFC)
DIFC is the UAE's premier financial free zone, hosting leading Islamic banks, the world's largest Islamic economy conferences, and NASDAQ Dubai—one of the world's most active Sukuk listing platforms.
Question 5: What is Dubai's 'Islamic Economy' initiative and what is its strategic goal?
- A government strategy launched by Sheikh Mohammed bin Rashid Al Maktoum to make Dubai the global capital of the Islamic economy across finance, trade, halal industry, digital economy, and tourism (Correct answer)
- A marketing campaign for Islamic products in UAE supermarkets
- A subsidised housing programme for UAE nationals
- A foreign policy initiative for GCC unity
Correct answer: A government strategy launched by Sheikh Mohammed bin Rashid Al Maktoum to make Dubai the global capital of the Islamic economy across finance, trade, halal industry, digital economy, and tourism
Dubai's Islamic Economy initiative aims to make Dubai the global capital of the Islamic economy by developing world-class infrastructure and regulation across Islamic finance, halal food, standards, tourism, arts, and the digital economy.
Question 6: Which UAE stock exchange is one of the world's most active venues for Sukuk listing?
- NASDAQ Dubai (within DIFC) (Correct answer)
- Abu Dhabi Securities Exchange (ADX)
- Dubai Financial Market (DFM) equity only
- Dubai Gold and Commodities Exchange (DGCX)
Correct answer: NASDAQ Dubai (within DIFC)
NASDAQ Dubai has become one of the world's leading Sukuk listing venues, hosting sovereign and corporate Sukuk from across the GCC and international markets, supporting Dubai's Islamic finance hub ambitions.
CIFE UAE Islamic Finance Framework 1
Which UAE legislative framework established the legal basis for Islamic banking operations in the country?