On 23 September 2018, the President of the United Arab Emirates promulgated Federal Law No. 14 of 2018 on the Central Bank and Organisation of Financial Institutions and Activities (the New UAE Banking Law). The New UAE Banking Law came into force on 30 September 2018 on the day of its publication in the Official Gazette.
The New UAE Banking Law will have impact on the regulatory landscape in the UAE for both fully fledged Islamic financial institutions and also conventional financial institutions operating through an Islamic finance window (Islamic Financial Institutions or IFIs).
One of the key features of the New UAE Banking Law is the establishment of the Higher Shari'a Authority (the Authority) which operates under the umbrella of the UAE Central Bank and which will oversee the implementation of Shari'a compliance in the UAE. The establishment of the Authority had been anticipated since 2016 and will assist in pushing forward the UAE's economic vision of becoming the global leader in Islamic finance, setting a roadmap for conformity as to Shari'a compliance at a federal level and fostering greater transparency to market participants.