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Legislative and regulatory framework
i Legislative and regulatory regime
There are no laws in Saudi Arabia that apply specifically to Islamic finance as opposed to other types of finance. The paramount body of law in Saudi Arabia is the shariah. The shariah is comprised of a collection of fundamental principles derived from a number of different sources, which include the Holy Quran and the Sunnah (the witnessed sayings and actions of the Prophet Mohammed). In addition to the shariah, Saudi Arabian law is also derived from enacted legislation. Legislation is enacted in various forms, the most common of which are royal orders, high orders, royal decrees, Council of Ministers’ resolutions and Council of Economic and Development Affairs’ resolutions, and resolutions and circulars of ministries and other governmental bodies. All such laws are ultimately subject to, and may not conflict with, the shariah and each Saudi Arabian court or other adjudicatory authority is required to interpret secular legislation accordingly. There are, therefore, numerous enacted legislations covering banking, capital markets, insurance and funds, all of which are subject to shariah as applied in Saudi…
