SBP Islamic Banking Bulletin, July-Sep 2007

Local news july september 2007 principle based

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July-September 2007 Principle based regulation will help flourish Islamic Financ e in UK principles-based-regulation-will-help-islamic-finance- flourish-fsa/ The FSA says that a move to principles-based regulation will provide the right environment for Islamic finance to flourish in the UK. The regulator has published a paper outlining its future role in the growth of Islamic finance, pointing out that it is now worth around £250bn glob- ally. It says it hopes the UK will be the “major European centre” for Islamic financial products and services. The paper identifies some of the challenges and opportunities specific to Islamic finance and says it has actively en- couraged its growth by providing an “open and flexible regulatory environment”, which accommodates both Islamic and non-Islamic financial institutions. It adds it is the first European regulator to authorize a wholly Is- lamic bank, and points out other Islamic financial insti- tutions have since been authorized. FSA Chairman, Callum McCarthy, says: “Islamic finance is a fast grow- ing force in the world economy and the FSA’s open and principle-based approach to regulation offers the right environment for it to flourish in the UK. “There is huge potential for an expansion of Islamic offerings in the UK’s financial markets, which will in turn boost Lon- don’s position as an international financial centre. “We believe in a ‘no obstacles, no special favours’ approach when authorizing new financial institutions and wel- come the development of this market as it provides cer- tain UK consumers with financial products that are in line with their beliefs.” The FSA does not regulate the Shariah compliance or otherwise of Islamic financial products. ONE of the UK’s leading accountancy bodies plans to launch an Islamic finance qualification. cima-takes-islamic-bank-laws-into-account/ The Chartered Institute of Management Accountants (CIMA) will become the first accountancy body in the UK to train its members in Islamic financial law. Ac- cording to the Financial Services Authority, the Islamic finance industry is now worth up to £250bn globally. Over the past five years several mainstream UK banks, including HSBC, have started to offer products such as Islamic mortgages and current accounts to Britain’s Mus- lim communities. Islamic banking had previously been restricted to specialist Islamic banks and some British Muslims complained that it was difficult to find banking practices that would not conflict with their religion. Ac- cording to Gordan Grant, the Edinburgh businessman who took over as president of CIMA in June, financial companies are now crying out for training to help them deliver Islamic financial services. “Employers are telling us that this is one of the areas that nobody covers at this point in time,” he said. An advisory panel of academics and scholars of Shariah law helped CIMA draw up the self-study qualification. The certificate was also devel-
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