IslamicFinance.de

Mushtak Parker, research consultant at Islamic Finance, says millennials are the main drivers in Saudi Arabia and Oman. The biggest challenge of Islamic finance is public policy, that most Islamic countries do not have a recognized or stated public policy in Islamic finance. It is the responsibilty of the governments because nothing can happen in a market without government approval or facilitation.

Mushtak Parker gave an interview on a series of topics, among wich the International Islamic Liquidity Management Corporation (IILM), education in Islamic finance, moving the industry to US$2 trillion (RM6.22 trillion), scholars on multiple boards, and the late Dr Zaki Badawi. Parker expressed his opinion that even though the establishment and goals of IILM are highly commendable, it lacks transparency. This leads to problems in its process of its conception and imediate operation. He fears that IILM will not adress liquidity management leaving thus the gap open.

Since November 2002, Professor Rifaat Abdel Karim is the inaugural secretary general of the Kuala Lumpur-based Islamic Financial Services Board (IFSB). During this time, the organization increased from its nine founding members to 195 to date, including 53 regulatory authorities and central banks from 41 jurisdictions.
In the interview he gave MUSHTAK PARKER, he stated that the IFSB approach to prudential and supervisory regulation is cross-sectoral which he first espoused in 2003 at a meeting during the World Bank/IMF Group meetings in Dubai in 2003. He also added that the board has developed strategies for the facilitation and the implementation of its standards.

The launch of the UK Islamic Finance Secretariat (UKIFS) by the lord mayor of the City of London, Alderman Nick Anstee, at a reception at Mansion House on March 31, marks the establishment of the first Islamic finance trade body in Britain.

Malaysia's offshore financial center in Labuan i.e. the Labuan Offshore Financial Services Authority (Labuan FSA) has been put in the "white listing" by the Organization for Economic Cooperation and Development (OECD) due to compliance with its standards for transparency and exchange of information between countries. This is a significant contribution of Labuan FSA in supporting the Malaysian government's agenda toward promoting Malaysia as a major hub for international Islamic finance.

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.

Bank Negara Malaysia (BNM), the central bank, is pressing ahead with developing a series of Shariah parameters that would provide a standard guidance on applying the respective Shariah contracts in Islamic finance.

In fact, BNM in December 2009 published its latest draft concept paper -- a Shariah Parameter Reference 3 (SPRC 3) -- on the Mudarabah contract. The paper has been sent to various market players in the Islamic finance industry for feedback. This follows the publishing in October 2009 of "Concept Paper -- Guidelines on Takaful Operational Framework" which outlines the parameters governing the operational processes of the Takaful business.

Despite the postponement by South Korea's National Assembly's Strategy and Finance Committee of pushing through a vote to approve a bill aimed at facilitating tax neutrality for the issuance of sukuk at end December 2009, local supporters of the introduction of Islamic finance products are confident that the delay is a minor setback.

The first onshore Shariah-compliant real estate fund in the Australian market, The LM Australian Alif Fund, was officially launched at end of May in Bahrain. The fund is managed by LM Investment Management Ltd., a specialist Australian income funds manager operating internationally and which is aimed at Islamic investors who are looking for opportunities in alternative investments and in new markets.

Mushtak Parker interviewed Ken Scott-Hamilton, general manager (Middle East), LM Investment Management Ltd., for Arab News about the rationale behind launching the fund and the opportunities and challenges for Islamic finance in Australia.

"The opportunities offered by Islamic finance in promoting global financial stability and financial inclusion are worth assessment by the leadership of the G-20 countries," said Jeddah-based Islamic Development Bank President Ahmed Mohamed Ali, reported Mushtak Parker in the Arab News.

The President told an Islamic Financial Architecture Colloquium hosted yesterday by Lord Mayor of the City of London Ian Luder at his official headquarters that it is time that the wider world should consider mainstreaming Islamic financial services. And the best way to do this is to accord the relevant Islamic finance stakeholders "observer status" within the framework of the G-20 and the expanded Financial Stability Forum of the International Monetary Fund (IMF).

Mushtak Parker writes in Arab News on 23 February that the Hong Kong Special Administrative Region government is finalizing new tax laws which would facilitate the introduction of Islamic finance on a par with equivalent conventional products, and there is a strong possibility that the Hong Kong Airport Authority (HKAA) will issue the debut quasi-sovereign Sukuk from the island enclave during 2009.

However, Hong Kong is concerned about the effect on Islamic finance of the credit crunch and the global financial crisis, since no economy, including those in the Middle East and GCC (Gulf Cooperation Council) countries, have gone untouched. Thus it seems unavoidable that Islamic finance will slow its pace of development in the near term, "alongside growing downside risks in the global financial scene."

Mushtak Parker reported in Arab News on 26 January about the launch of Falcom Sharia Index licensed by Tadawul (the Saudi stock exchange). The promoters claim that this index is the first of its kind on the Tadawul, and comprises some 112 companies which in turn comprise nearly 78 percent of the Tadawul All-Share Index (TASI).