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London a natural home for Islamic finance

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Points of Essence:

  • The availability of key components of robust frameworks, leading advisory firms, strength and depth in capital markets and intellectual capital, makes London a natural base for Islamic finance. Zawya has the report.

Islamic Finance Council UK Executive Board Member Omar Shaikh

23 November 2008
The UK Pavilion at the 15th World Islamic Banking Conference (WIBC) in Bahrain demonstrates that despite its origins overseas, Islamic finance has found a natural home in London and the UK.

This is the second time the event has supported a UK Pavilion, hosted by UK Trade and Investment (UKTI), and reflects growth plus the diversity and complimentary skills UK companies contribute to Islamic finance.

Islamic Finance Council UK Executive Board Member Omar Shaikh said:

“Islamic financial institutions come to London because it’s the leading financial capital of the world.

“That status doesn’t happen overnight or by chance. It takes robust frameworks; leading advisory firms; strength and depth in capital markets; and intellectual capital. These are key components built up over decades.”

So when Islamic finance institutions decide where to set up, it’s no surprise they choose

London — a European hub with clear regulation, a deep talent pool, and a 2 million strong domestic retail market. The result is the largest (and most liquid) market for Islamic financial products outside the GCC states and Malaysia.

London Stock Exchange Debt Product Manager Darko Hajdukovic said:

“There’s an infrastructure laid down in London, as a global financial centre, that facilitates the development of financial instruments.”

It isn’t only domestic players such as the Islamic Bank of Britain and Gatehouse that are keen to explore the UK market’s advantages. Gulf and other investors, such as the Commercial Bank of Qatar, have identified London as a regional hub for Islamic finance, often listing on the London Stock Exchange, one of the largest listing venues for Shariah-compliant products in the world.

A well-developed Islamic financial product market is an additional pull-factor. London hosts a comprehensive product range, including sukuk (Islamic bonds) for institutional investors, and takaful (Islamic insurance) and mortgages for retail customers. Following the introduction of legislation to facilitate sukuk trading, the government recently conducted a feasibility study on the possibility of a sovereign sukuk. The initial proposal is to issue a bill-like sukuk as a 90 day rolling programme of up to £2 billion. An announcement on progress is due in early December 2008.

Darko Hajdukovic added:

“London was successful in creating new financial instruments in the past and the Treasury has worked to create a tax regime that does not put additional tax burdens on these types of products,”

The removal of what had effectively been double stamp duty on Islamic mortgage alternatives has tapped a potential new market in the UK — Muslims who either did not buy property or bought it in cash. In fact, the UK has introduced more tax legislation to enable Islamic Financial Services than any other non-Muslim country, but just as significant has

been its commitment to gold standard regulation of the sector.

It includes market-driven sector standards, including a recent agreement between the International Capital Markets Association and the International Islamic Financial Market to develop one for Islamic capital markets. But it also reflects a public government commitment to develop the sector.

UKTI Chief Executive Andrew Cahn emphasised:

“In these tough times, it’s more important than ever that we make the most of growing sectors like Islamic finance. That’s why UKTI is helping open doors to UK financial services expertise and ensure the UK is a leading partner of choice.”

For more information on partnership opportunities with the UK visit http://www.TheCityUK.com/WIBC.

Ends-

UK Trade & Investment is the UK Government’s international business development organisation, supporting businesses seeking to establish in the UK and helping UK companies grow internationally. The services offered by UK Trade & Investment bring together a network of business sector specialists and support teams in British embassies and Foreign and Commonwealth Office (FCO) posts all around the world, as well as key experts in government departments across the UK. UK Trade & Investment works with a wide range of partner organisations in the UK, including Regional Development Agencies and the Devolved Administrations, Business Links, Chambers of Commerce and trade associations.  For more information, visit the web site at: http://www.uktradeinvest.gov.uk.

For latest press releases, visit the online newsroom at http://www.newsroom.uktradeinvest.gov.uk.

The 15th World Islamic Banking Conference in Bahrain (23-25 November) provides an excellent opportunity for UK and Islamic finance representatives to continue building strong partnerships that will create genuine, global opportunities for the long term development of this growing market.

The UK Pavilion, hosted by UK Trade Investment, including exhibits from ABC International Bank plcBank of London & the Middle East, Braxxon, Chartered Institute of Management Accountants (CIMA), DDCAP, Freshfields Brackhaus Deringer, GSH UK Bank, HSBC Amanah, Islamic Finance Advisory and Assurance Services (IFAAS), International Financial Services, London (IFSL), Islamic Bank of Britain, KPMG, Locate Birmingham, London Stock Exchange, Norton Rose, Securities and Investment Institute and Simmons & Simmons.

For more information or to arrange an interview please contact Natasha Guerinoni from UK Trade & Investment on 020 7215 4218 or email natasha.guerinoni@ukti.gsi.gov.uk.

© Press Release 2008

Source: http://www.zawya.com/

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Written by Suapi Shaffaii

November 23, 2008 at 8:30 pm

Posted in Financial Centres

Tagged with , ,

One Response

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  1. I must say this is a great article i enjoyed reading it keep the good work 🙂

    Mike Harmon

    November 23, 2008 at 9:00 pm


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