IslamicFinance.de

The launch of Europe’s first dedicated Islamic Finance and business Center at a mainstream British university, Aston Business School, which is part of Aston University in Birmingham, underlines the growing Islamic finance education industry in and out of the UK.

The El Shaarani Islamic Finance and Business Center, named after its benefactor El Shaarani, CEO of Surgi-Tech Group in Dubai, aims to establish Birmingham as the center for Islamic finance in the UK.

The global growth of Islamic finance and the UK banks’ long involvement in the sector since the early 1980s, has encouraged professional bodies, academic institutions and some private entities to set up Islamic finance courses ranging from certificates, diplomas, undergraduate, masters and post-graduate degrees in Islamic finance and economics.

“Islamic finance is, and will continue to be, an important part of the government’s overall commitment to ensuring a competitive financial services sector in the UK,” reiterated Sarah McCarthy-Fry MP, exchequer secretary to Treasury, in London at a seminar entitled “New Year — New Opportunities in Islamic Finance,” hosted by the international law firm, Norton Rose, in London recently.

This statement of intent coincides with two notable developments relevant to the European Islamic finance sector in the last two weeks or so. Firstly, the UK Treasury and the Financial Services Authority (FSA) have been working to remove barriers and uncertainty in the regulation of alternative finance investment bonds (sukuk).

Following consultation with the industry, the statutory instrument, the Financial Services and Markets Act 2000 Order 2010, was sent to the House of Commons in mid-January, and the Brown government is confident that the new regulations will come into effect by the end of February. These measures, stressed McCarthy-Fry, will reduce compliance and legal costs for these instruments, and facilitate the issuance of corporate sukuk in the UK.

It's a myth to assume Islamic finance products are safer than conventional products and underlying risks should be studied more carefully, Qatar's top regulator said on Wednesday.

Despite being billed as a safer alternative to traditional banking because assets must underpin deals, Islamic bondholders have found they may not have any more legal safeguards than conventional counterparts in the event of default.

Such issues were highlighted after sukuk -- or Islamic bonds -- had the first ever defaults last year.

Sukuk, one of the flagship products in the $1 trillion Islamic finance industry, are structured as profit-sharing or rental agreements and returns are derived from underlying assets because Islamic laws prohibits paying or earning interest.

Malta should be in a position to issue guidelines on securities under Islamic finance law by the middle of the year, but there were still legal and technical problems to sort out with respect to banking, Finance Minister Tonio Fenech said.

Medium-term growth prospects for the world's sukuk market are good, said Standard & Poor's Ratings Services in a report published today. In addition, we understand from unofficial market sources that about US$10 billion more could potentially enter the pipeline. If that comes to market, total sukuk issuance in 2010 could approach the current 2007 record of US$34.3 billion. The main uncertainty this year is market conditions.

The United Kingdom government is deciding to issue sukuk which would:

* Diversify its investor base- not a bad prospect for an indebted country- standing a chance to attract further liquidity.

* Show it is not complacent and really means business creating a benchmark in Europe, where no significant sukuk issuance occurred, excluding a 100 million euro issuance in 2004 in German region Sachsen-Anhalt. Pre-crisis rumours had it that the UK would issue sukuk worth £2 billion in short term notes making a real statement about its Islamic finance ambitions.

* Provide help to the five stand alone Islamic banks, which are required by the market regulator to put in place liquidity buffers, consisting of government bonds or cash. Because there is no sovereign sukuk, these shining monuments to London’s superiority in Islamic finance depend on debt issued by the Islamic Development Bank.

* Encourage corporate sukuk issuance, which is not too probable without the government leading by example.

The London School of Economics and Harvard Law School invite you to attend a public lecture in London:

Title: Global Perspective on Islamic Finance
Date: February 24, 2010
Time: 6:30-8pm
Venue: Hong Kong Theatre, Clement House, London School of Economics

http://www.lse.ac.uk/resources/mapsAndDirections/findingYourWayAroundLSE...

Speakers:
Stephen Green, Group Chairman, HSBC Holdings &
Dr M. Umer Chapra, Adviser, Islamic Development Bank, IRTI

Chair: Professor Sarah Worthington, LSE Pro-Director,

Please spread the word around among your colleagues and friends in London who can benefit from this public lecture.

This event is free and open to all with no ticket required. Entry is on a first come, first served basis.

For questions, contact:

IFP at 617-496-2296 or 2297 or ifp@law.harvard.edu

The report on Social Responsibility Trends at Islamic Financial Institutions presents the results of an extensive survey on Social Responsibility at Islamic Financial Institutions (IFIs) carried out during summer and fall of 2009 by DinarStandard and Dar Al Istithmar with the support of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

Some key findings of the survey were:

Clients: 100% of respondents answered yes to having a policy to screen prospective clients which is actively implemented. Similarly 97% have an organizational policy that deals with client responsibly.

Employees: 83% of respondents’ state having policies that provide equal opportunity to all their employees, 93% have policies that ensures merit-based salary and promotion, and 86% having policies that specifically prohibits any kind of discrimination. However, when it comes to having policy to monitor employees from different backgrounds and gender, the response was mix with only 52% admitting to having such a monitoring policy and 48% not having any such policy.

The laicist French government seeks to make amendments to laws improving Islamic finance investors access to France. Although a relevant draft law was turned down by the Constitutional Council in form, but not in content, French Minister of Economy, Industry and Employment Christine Lagrade made it certain that the government would work further. The French minister's advisor Thierry Dissaux told KUNA that the government would introduce amendments to French legal and tax systems in order to match Islamic financial principles.

According to recent studies, Islamic financial investments in France are estimated at roughly USD 120 billion.

Talal al-Kandari reported on Kuna.

If Islamic finance has been more resilient to the crisis than its conventional counterpart, it is because it is less risky, have found many industry players. However, this statement does not reflect the inherent risks of Islamic banks themselves. [...]

For this conference co-organized by the University Paris-Dauphine and Arrow Financial Consulting, six roundtables will address the specifics of risk management in Islamic banks (credit risk, market risk, operational risk, legal risk, risk liquidity risks in order of religious interpretation.

Paris Thursday, January 28, 2010

University Paris-Dauphine

Raymond Aron Hall 2 nd Floor

Place du Maréchal de Lattre de Tassigny 75775 PARIS Cedex 16

http://ifinanceexpert.wordpress.com/2010/01/19/france-first-islamic-fina...

In a paradox that sums up so much about the country, Dubai recently unveiled the world’s tallest building in the midst of a crisis in the property market.

Malaysian and the United Kingdom Islamic banks signed off on a standardised wakala deposit agreement, which some bankers said could help the industry reduce its reliance on the controversial commodity Murabaha structure.

Aston Business School in Birmingham, UK launched an Islamic Finance and Business Centre – the first of its kind in Europe.

IslamicFinance.de is calling Islamic financial institutions to become member of the UNEP Finance Inititiave to learn and contribute to international best practice in ethical and faith based finance:

"UNEP FI is a global partnership between UNEP and the financial sector. Over 180 institutions, including banks, insurers and fund managers, work with UNEP to understand the impacts of environmental and social considerations on financial performance."

membership information package:
http://www.unepfi.org/fileadmin/forms/MembershipInformationPack.pdf

Geneva-based Faisal Private Bank announced it had appointed Swiss national Mark Koch to replace outgoing Chief Executive Marco Rochat from Jan. 1 with a mandate to broaden the Islamic finance focus of the bank.

PRESS RELEASE

Oak Brook, Illinois, January 13, 2010: The World Congress of Muslim Philanthropists (WCMP) expresses its utmost sorrow on the massive devastation caused by the earthquake in Haiti, a Caribbean nation suffering with utter poverty. To ensure rapid and effective response to this tragedy, we have established an emergency cell that will closely monitor and assess the situation on ground, and will serve as the bridge between the global community of donors and partner humanitarian agencies. WCMP anticipates working closely with the Organization of Islamic Conference, United Nations, Red Crescent Societies, and other reputable agencies present or familiar with the region.

WCMP urges philanthropists, foundations, and corporations in general and of Muslim world in particular to join us in this multi-partner relief effort. Please direct your communications to the following address:

WCMP- Haiti Emergency Cell
Imtiaz Khan, MD
ikhan@thewcmp.org
+1-630-242-2792

With best regards,

WCMP Secretariat

Geneva-based Faisal Private Bank has warned it could face foreclosure on parts of its real estate portfolio unless investors stump up cash to keep lenders at bay, documents seen by Reuters show.

Salaam Halal insurance, part of Principle Insurance Holdings and the first independent takaful provider in the UK, has stopped accepting new business, following a failed rights issue. It is now in a ‘solvent run-off’ situation, whereby its existing polices (there are about 10,000 policyholders) will operate until expiry, when they cannot be renewed

Global Shariah Shipping Fund, jointly sponsored by Cyprus-listed SFS Group and Kuwait Finance House (Malaysia) and Global Shipping Investments Management Ltd (equally owned company by SFS and KFHAM), is being launched with the aim of raising $150 mln for the acquisition of offshore vessels and other types of ship.

The international financial services information company Thompson Reuters is planning to launch a news portal covering information about the Islamic financial industry in early 2010.