UK to Be First Non-Muslim Country to Host Islamic Economic Forum

THE DAILY TELEGRAPH: London will host the ninth World Islamic Economic Forum in October, the first time that the event will be held outside of a Muslim country, as the British capital looks to become a global hub for Sharia finance.

More than 1,500 delegates, including government and business leaders, as well as scholars, will descend on London for the three-day event, which sets out to boost trade partnerships between Islamic and European markets.

"Hosting this prestigious conference... presents huge opportunities to promote London as a world beating business hub, highlighting our status as a major centre of Islamic finance and as a compelling destination for foreign investors," Mayor of London Boris Johnson said in comments posted on the event's website.

Britain has the largest Islamic banking sector outside the Middle East and Asia, the website said. Read on and comment » | Edited by Andrew Trotman | Thursday, July 04, 2013

Investors Shy Away from Sharia Funds Following Arab Spring
FINANCIAL NEWS: Sharia-compliant funds had been proving increasingly popular until the global financial crisis and then the Arab Spring frightened off investors and stymied private equity activity in the Middle East.

Fundraising volumes have collapsed, with not a single sharia fund raised so far this year, acacording [sic] to data provider Preqin.

Sharia-compliant funds, which enable investors to comply with Islamic law, are simple to structure and are guided by certain principles relating to interest accrual and the types of investment they can make.

Funds could be restricted, for example, from investing in businesses related to alcohol, gambling, pornography, weapons, tobacco and pork-related products. The funds are overseen and approved by a sharia supervisory board.

Sharia funds have varying degrees of flexibility depending on their target investors, which can include ultra high net worth individuals, institutional investors and sovereign wealth funds, according to Richard Hughes, a senior fund services manager at fund administration specialist Vistra Group.

Private equity firms based outside the Middle East can target Muslim investors by offering side-vehicles set up alongside existing funds that are not sharia-compliant.

Before the onset of the financial crisis, interest in sharia funds had been on the rise, with private equity firms raising $5.6bn of capital through six such funds in 2006. » | Ayesha Javed | Monday, September 12, 2011

Real Talk: Islamic Finance

BBC: Islamic Finance 'In Double Digit Growth'

Spotlight: Islamic Banking System
In times of financial crisis there is an alternative banking system, which has proved to be more stable, than the traditional, Western banking system. I mean - the Islamic banking. The financial systems in the Islamic countries, even in those, who were formerly Soviet republics - like Kazakhstan - are a real alternative, while the Russian business and science lacks necessary knowledge to adapt its finance to the severe conditions of the crisis.
We will be discussing this issue with our guests the Head of the Russian Islamic Committee Geidar Jemal and Financial analyst Sergey Aleksashenko

How Sharia Compliant Financial Products Work

Beginners’ Guide to Islamic Finance
FINANCIAL TIMES: Islamic Finance is a method of financing and banking operations that abides by Sharia Law. With the help of Bank of London and Middle East we outline the rules that all sharia-compliant financial products have to adhere to.

What are the main rules for Islamic finance?

Bank of London and the Middle East (BLME), a Sharia compliant bank, says the main principles of Islamic Finance is the avoidance of all haram (harmful) activities such as charging interest. In addition to the prohibition on charging interest, Islamic financial institutions must ensure that ambiguity (gharar) or gambling/speculation (maysair) is minimised in transactions and contracts. Complying with Sharia law also means that Islamic Financial Institutions are not permitted to invest in alcohol, pork, pornography or gambling.

How does Islamic finance work?

The overarching principle of Islamic finance is that all forms of interest are forbidden.

The Islamic financial model works on the basis of risk sharing. The customer and the bank share the risk of any investment on agreed terms, and divide any profits between them.

The main categories within Islamic finance are: Ijara, Ijara-wa-iqtina, Mudaraba, Murabaha and Musharaka. >>> Lucy Warwick-Ching | Wednesday, July 14, 2010

Related articles here and here and here

StanChart to Launch Islamic Commodity Derivative
REUTERS: DUBAI - Standard Chartered Bank Saadiq (STAN.L) expects to launch an Islamic commodity derivative in the first quarter, the bank's chief executive said on Tuesday.

Speaking at the Reuters Islamic Banking and Finance Summit, Afaq Khan said the bank was in advanced discussions with counterparties in the Middle East, including trading companies and government entities, to launch the product.

"Basically if you want to hedge oil rice, wheat, sugar or steel, we will be in a position to offer that in a sharia complaint manner," he said.

Khan said the bank had spent about 15 months creating the product, which will be endorsed by the bank's sharia board. >>> Reporting by John Irish, Tamara Walid, Shaheen Pasha and Rachna Uppal; Editing by Louise Heavens | Tuesday, February 16, 2010

Shariah Finance

Dhimmitude Alert! Lloyd's of London Eyes Islamic Reinsurance
Educating Islamic Bankers: Dubai International Financial Center plans to set up a board to encourage education in Islamic finance, an industry that is likely to grow by 15 to 20 percent this year despite the financial crisis.

The Executive Director of Islamic finance at the DIFC Nik Thani, speaking at the 2009 Reuters Islamic Banking and Finance Summit in Dubai, says that with large conventional banks increasingly venturing into the Islamic arena, more educational and training resources are needed.

Thani says "this would be the minimum standard and from their we could build up to other things...including degrees in Islamic finance."

Speaker: Nik Thani, Islamic Finance Executive Director Dubai International Financial Center

Presenter: Ruben Ramirez, Dubai
REUTERS: LONDON - Lloyd's of London is setting up an Islamic re-insurance syndicate with a capacity of up to 200 million pounds to write Islamic compliant reinsurance globally, a PriceWaterhouseCoopers executive said on Tuesday.

Mohammad Khan, director for Islamic insurance, or takaful, at PwC, said the Lloyd's syndicate would include mainly financial institutions and to a lesser extent individual investors. It would become operational between the end of 2009 and the beginning of next year.

Financial consultant and accounting firm PwC is advising the financial group on the syndicate, he said at the Reuters Islamic Banking and Finance Summit in London.

Lloyd's of London was not immediately available to comment. >>> By Cecilia Valente | Tuesday, April 14, 2009

Crisis Creates Opportunity for Islamic Wealth Management
WEALTH BULLETIN: Beneficiaries from the financial crisis are few and far between but it could prove to be the making of Islamic wealth management. While sharia-compliant financial services have enjoyed strong growth among ordinary banking customers and institutions, the wealthy have been slower to embrace Islamic finance.

Humayon Dar chief executive of BMB Islamic, an alternative asset manager with a focus on Islamic finance, said: “Historically in the Middle East and North Africa region, the high net worth and ultra-high net worth families have not been interested in Islamic finance.”

Many wealthy individuals in the Gulf preferred to seek familiar western financial brands that could offer the latest hedge funds or structured products.

The regional head of a privately owned Swiss wealth manager, said: “Previously, the best shot at getting hold of the personal wealth of the local families was to offer commercial banking facilities. The big banks with good brands did well and pushed products as hard as they could. It was about packaging sexy products. But wealthy investors are realising that the big banner plus a familiar brand does not necessarily equal the safest place to put your money.”

The more constrained approach of Islamic institutions, which in theory do not engage in usury (charging interest on loans), short selling or leveraged investing, among other western practices, might look attractive by comparison. This, at least, is the bet being made by Bank of London and the Middle East, a UK-based institution that recently launched a sharia-compliant private bank.

Adrien Gayler, a former Merrill Lynch executive who is heading the private banking business, said: “It is a more conservative, simpler and safer approach with a range of products that is inevitably somewhat limited.

“It means clients probably will not benefit as much in a rapidly rising market, but in a downturn they will be protected.” >>> James Rutter | Monday, March 9, 2009

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Islamic Finance Sector Needs More Sharia Scholars
THE GUARDIAN: PARIS (Reuters) - As the world financial industry sheds jobs by the tens of thousands, the $1 trillion Islamic banking sector has a growing load of work for sharia scholars but few candidates coming forward to do it.

Experts steeped in the Muslim scriptures are critical to Islamic finance, which requires a religious stamp of approval before a bond, mortgage contract or other financial product can be marketed as moral according to the standards of the Koran.

But qualifying for this work takes much more time and effort than other jobs in finance require. Candidates must first study Islamic law or sharia for many years, and then master finance.

"Globally, and especially in Europe and America, there is a shortage of scholars familiar with both fields," said Mufti Abdul Kadir Barkatulla, an Indian-born imam in London who sits on sharia boards for six banks including Lloyds TSB.

"A few scholars are going around the world (advising banks) and new scholars are not being trained fast enough to take their place," he said at an Islamic finance conference in Paris.

Part of the problem is linguistic. Many Middle Eastern scholars work only in Arabic, the language of Islam, but the global market needs scholars fluent both in Arabic and in languages such as English or French.

A study for Paris Europlace, an industry group trying to develop Islamic banking in France, said there were fewer than 100 scholars in the world qualified to sit on sharia boards.

Demand for Islamic banking has grown in recent years and expanded from the Middle East as more of the world's 1.3 million Muslims seek investments that comply with their faith. >>> By Tom Heneghan, Religion Editor | December 1, 2008

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Islamic Bankers See Sharia System Strengthening
THE GUARDIAN: JEDDAH, Saudi Arabia - The global financial crisis is an opportunity for Sharia-compliant Islamic banking to further its position internationally, bankers said at a forum in Saudi Arabia on Saturday.

Islamic banks have been barely bruised by the global credit crisis so far, although falling property and commodity prices and slowing economies are starting to affect the sector.

But bankers at the forum, on how the world finance crisis could affect Islamic banking, saw the sector strengthening.

"It is a must for Islamic finance to seize the opportunity that came with this global financial crisis," Ahmad Ali, president of the Jeddah-based Islamic Development Bank (IDB) said at the discussion organised by IDB.

"Global investment banks should be set up that realise the Islamic economy and offer the world a new vision and different way to manage assets, invest wealth and create products." >>> By Asma Alsharif / Reuters | Saturday, October 25 2008

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Should America Bail Out Sharia Finance?
FAMILY SECURITY MATTERS: On September 17, 2008, the U.S. News and World Report magazine reported on how the "Federal Reserve extended an $85 billion loan to American International Group to be paid back as AIG sells off some business in the biggest government takeover so far in the ongoing credit crisis." What the American public hasn't seen yet is what AIG is going to sell off in terms of its business. According to the September 16, 2008 press release by the Federal Reserve on this bailout, the "U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto the payment of dividends to common and preferred shareholders."

But while the U.S. taxpayers are loaning money to AIG and the U.S. holds a nearly 80% equity interest in AIG, no one in the government seems concerned that AIG is continuing to expand its Sharia finance business. Less than a week after the government bailout of AIG, Reuters reported on how AIG's unit American International Assurance Co (AIA) was awarded an "international takaful (Islamic insurance) license" by the Malaysian government. AIG's American International has been selling Sharia-based "Islamic insurance" for at least two years, through its AIG Takaful division, since its October 1, 2006 announcement, with a stated goal to sell such Sharia financial instruments in the United States. AIG SunAmerica, AIG Financial Services Corp, and other divisions of AIG also are dealers in Sharia mutual trusts. 



The AIG bailout came two days before Congressman Tancredo's introduction of the "Jihad Prevention Act" (H.R. 6975), which "would deny U.S. visas to advocates of 'Sharia" law, and expel Islamists already here." This House bill has been referred to the House Committee on the Judiciary. Yet as the AIG bailout shows, the challenge of Sharia is more than an immigration problem, and the U.S. federal government is not yet taking any action on Sharia finance. While we should be concerned about "Islamists" coming to the U.S. to promote Sharia, shouldn't we be really concerned that the U.S. taxpayers own a nearly 80% equity interest in a company promoting Sharia finance today? Shouldn't the first assets that AIG should have sold two weeks ago have been their Sharia finance businesses? Should America Bail Out Sharia Finance? >>> Jeffrey Imm | October 6, 2008

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