UKIFC and Church of Scotland convene 3rd Shared Values Workshop at Dalmahoy Hotel and Country Club

The Islamic Finance Council UK (UKIFC) and Church of Scotland co-hosted a private event at the Dalmahoy Hotel and Country Club on 12th September 2017.

The round table was the third in a series of three workshops that forms part of a joint venture between Islamic finance and the Church of Scotland (see BBC). The round table picked up on discussions from earlier round tables held in Edinburgh and the House of Lords in London, delivering a draft Shared Values Framework.

Shaykh Ruzwan Mohamed presents the draft  Shared Values Framework to attendees

The framework was authored and presented by Shaykh Ruzwan Mohamed, one of the UK's leading Islamic theologians to an audience of seniorrepresentatives from the faith traditions and financial services sector including the Church of England, Church of Scotland and the Quakers, international scholars and academics, and senior figures from CMS, Wintons, DDCAP, Al Rayan Bank, RBS, HSBC and RJ Fleming.

HH Sanusi II, Emir of Kano (and former Governor of Central Bank of Nigeria), who has supported the initiative since inception and attended earlier round tables sent his apologies, commended the UKIFC and Church of Scotland in reaching this impasse and reiterated his support in a video message.

The presentation by Shaykh Ruzwan Mohamed was well received and appreciated by the audience who broadly agreed with its content. Contributions from Sir David Walker (former Chairman of Barclays Bank and Morgan Stanley) and other participants were taken on board and will form part of the considerations in moving on to the research and development stage of the joint venture to deliver a practical solution.

A selection of pictures from the event can be seen below:

Roundtable attendees enjoying the sunshine in Edinburgh
Humza Yousaf, MSP - Minister for Transport and the Islands, addresses the attendees at the Dalmahoy Hotel and Country Club

 

Sir David Walker (former Chairman of Barclays and Morgan Stanley) shares his insights with other attendees
Left: Stephanie Maier, Director of Responsible Investment at HSBC, Centre: Shaykh Ruzwan Mohamed, iSyllabus Right: Dr Richard Frazer, Church of Scotland

15% Discount for Global Ethical Finance Forum 2017 (13/14 Sep, Edinburgh)

UKIFC is delighted to be the strategic partner for the Global Ethical Finance Forum 2017 which will be hosted by the Royal Bank of Scotland (RBS) on 13th / 14th September 2017.

The two-day forum will focus on mainstreaming ethical finance, by promoting dialogue between Sustainable Banking, Socially Responsible Investing (SRI), Environmental, Social and Governance (ESG), and Islamic/faith-based Finance.

Under the theme of “Ethical Finance: Merging Profit & Purpose”, the forum will address topical issues of sustainable capitalism, faith based investing, sustainable development goals, impact investing, sustainable banking principles, green bonds and Sukuk.

Do not miss the opportunity to witness Charles Munn, Banker and Business Historian; Scott McClurg, Head of Energy and Sustainability, HSBC Commercial Banking; Kirsty Britz, Director of Sustainable Banking, Royal Bank of Scotland; Rafe Haneef, Executive Director / Chief Executive Officer, CIMB Islamic Bank Berhad & Ugo Biggeri, Chair of the Board of Directors of Banca Etica deliberate on ways to reintegrate the banking sector into society, and how to earn and re-establish trust.

Held under the patronage of the Scottish Government, with the support of the UK Government & in strategic partnership with UKIFC, the forum’s confirmed speakers include: Keith Brown MSP, Cabinet Secretary for the Economy, Jobs & Fair Work; Nigel Kershaw, Chair, The Big Issue Group; Nurlan Kussainov, CEO, Astana International Financial Centre (AIFC) Authority & Peter Webster, Director of International Affairs, Vigeo Eiris & CEO, EIRIS Foundation, amongst others.

Do not miss the exclusive opportunity to attend the Civic Reception hosted by the Scottish Government at the iconic Edinburgh Castle.

To register for the event click here and use the code UKIFC@GEFF to get a 15% discount.

For more information, visit www.geff2017.com or contact the organizers at 00971 44420471, regel@meglobaladvisors.com

 

 


UKIFC Board Members speak at the International Takaful Summit in London

Our Advisory Board Members, Ajmal Bhatty and Omar Shaikh were invited to speak at the International Takaful Summit in London on 11th-12th July 2017.

Ajmal Bhatty is a thought-leader in takaful and has been a practitioner and promoter for over 30 years. Ajmal is a Director at Tokio Marine Middle East, and is setting up a foundation to serve the takaful industry in steering it towards growth and stability and in developing ethical and sustainable micro-financial solutions for the markets of Africa and South Asia. Ajmal shared key insights into his work.

Omar spoke on Shari'ah Governance and Audit. Omar shared key findings from our External Shari'ah Audit Report (download a copy here) and fascinating insights from countries that had implemented Shari'ah Audits through their Central Banks. Omar said that the evolution of Shari'ah Governance was imperative as the [Islamic finance] industry evolved and used Morocco as a case study to demonstrate how emerging markets are supervising Shari'ah matters.

The 11th International Takaful Summit was a platform to discuss how the global Islamic insurance sector can capitalise on the experience of London’s insurance market in order to drive growth.

The flagship two-day programme addressed the challenges specific to takaful companies such as low penetration rates, distribution channels, suitable investment vehicles and the lack of qualified practitioners and operational issues that are affecting global business such as cyber security, digital disruption, data analytics and the use of robotics. The programme also covered challenges and opportunities specific to Africa, Asia and GCC takaful markets with a suggested road map for the way forward.


"Faith in finance" is the theme for the lastest Edinburgh Ethical Finance Round Table

The 13th Edinburgh Ethical Finance Round Table took place in the offices of Maclay Murray & Spens LLP at Quartermile on 15th June 2017.  The topic for the meeting was faith-based finance and the faith perspective on ethical investment.

The first presentation was given by Catherine Alexander, chair of the trustees of the Church of Scotland Investors Trust.  The Trust was established by the Church in the 1980’s to provide it and its congregations with cost effective investment management of their funds.  The total funds under management currently amount to around £400m and day to day management is delegated to three investment management firms.  Catherine indicated that the Trust has always operated on the basis of avoiding certain categories of investment, their current policy being to exclude any company with a higher than 15% involvement in armaments, alcohol, gambling, tobacco or tar sands.  Certain of these exclusions were not without their questions – for example the Church of Scotland itself is willing to accept heritage lottery funding for projects.  Increasingly the Trust is seeking ways of encouraging ethical behaviour by those they invest in and consider that they have an important role as lobbyists in this direction within the corporate sector.

UKIFC's Omar Shaikh (right) with Saquib Ismail (Al Rayan Bank) and Catherine Alexander (Church of Scotland Investors Trust)

Saquib Ismail, Senior Sales Manager with Al Rayan Bank gave the second presentation.  He opened by giving a brief history of the Bank, which was founded in 2004 (as Islamic Bank of Britain) and opened its first branch in Scotland last year (see Scotsman article).  It currently has around 50,000 customers and has grown rapidly in recent years.  In keeping with Sharia requirements all of its products are asset-based and all returns provided to depositors constitute profit and not interest, although for the most part this distinction is invisible to the Bank’s customers. Interestingly, the list of assets and activities which the Bank excluded is very similar to that mentioned by Catherine, although in the Bank’s case the exclusions are absolute rather than matters of choice and policy.  A recent notable development is that around 80% of the Bank’s deposit customers are now non-Muslims, although Muslims naturally remain a substantial majority of those taking “Islamic mortgages”.

The presenters then took a number of questions from the floor, one point which emerged being that any set of ethical investments principles needs to be kept under regular review, to take account of changing perceptions and understanding.  There was general agreement that most recent research had tended to indicate that returns from ethical investments generally fully matched those of conventional investment strategies.  David Cousland, of Fair Finance Agency, cited the work of Oikocredit in the developing world, including one notable project which had been running across the Muslim and Christian communities in Egypt for around 40 years.

Omar Shaikh (left), Martin Johnstone (centre) and Dr Richard Frazer (right)

The final part of the meeting saw a report on a “global first” for Scotland, namely the ongoing project between the Church of Scotland and the Islamic Finance Council UK to attempt to produce a financial product which would help to tackle financial exclusion, based on the shared values of the two faith communities (see BBC article).  Doctor Richard Frazer and Martin Johnstone, Convener and Secretary of the Church and Society Council, spoke for the Church of Scotland and Omar Shaikh for the UKIFC.   The aim will be to produce in the fairly near future a document setting out the conclusions reached on the applicable shared values, as emerging from the series of inter-faith workshops which had taken place, and there would then be a phase of “R & D” seeking to build out the detail of a financial product.  It was emphasised that the ultimate product would be open to the whole of society, not only those of the faiths involved.  The relevance of Scotland’s long history of ethical finance was noted and Doctor Frazer also made the point that part of the process would involve taking views from the “grass roots” communities which the product would be intended to assist.  In response to a question from the floor Mr Shaikh confirmed that it was the intention of involving other faith groups also in the process as matters moved forward.

 


Financial Inclusion Expert Joins UKIFC Team

The UKIFC is delighted to announce the appointment of Ms Modupe Ladipo as a Senior Advisor. Ms Ladipo specializes in financial inclusion and has over 25 years’ experience in financial services working across complex environments in Africa, Asia-Pacific, Europe and the US.

Based in Nigeria, Ms Ladipo will strengthen the UKIFC's Government Advisory capability, particularly in Africa where financial inclusion is a key policy driver.

A pioneer of non-interest (Islamic) finance in Nigeria Ms Ladipo is the former CEO and current Chair of Enhancing Financial Innovation & Access (EFInA); a leading NGO backed by UK Government's DFID and the Bill & Melinda Gates Foundation.

UKIFC Advisory Board Member Mr Omar Shaikh said: "We worked closely with Modupe and her team during our time in Nigeria and were impressed by her passion, professionalism and the technical expertise she demonstrated in making the Nigerian financial system work better, especially for the poor. As a recognised leader in financial inclusion across Africa and with strong knowledge of both conventional and Islamic finance, we look forward to working with Modupe to expand our work in emerging markets and using non-interest/Islamic finance to address financial inclusion."

Commenting on her appointment Ms Ladipo said: "I joined the UKIFC as a Senior Advisor to provide thought leadership on how Islamic and Ethical Finance can contribute to the global financial inclusion agenda. I look forward to provide technical support for the development of innovative Islamic and Ethical Finance products aimed at low income earners across multiple jurisdictions."

To find out more about the UKIFC's work in Government Advisory and Ethical Finance please click here.

 


Graham Burnside attends Responsible Finance and Investment Summit in Zurich

Our Advisory Board Member, Graham Burnside was invited to speak at the RFI Summit in Zurich on 3rd & 4th May 2017, on financial inclusion and accessibility, and efficiency through FinTech. During the session, Graham also discussed whether by opening finance to Muslims, impact investing can have a broader social impact.

Graham is an expert in banking and finance law, specialising in particular in structured finance and capital markets. He is considered the Scotland's leading expert, having structured and documented the first (and so far only) Islamic mortgage products operating under Scots law and the first fully Sharia-compliant commercial real estate financing in Scotland.

The Responsible Finance & Investment Summit (RFI Summit) is an initiative of the RFI Foundation and Swiss Arab Network to build awareness of shared values that can bring socially responsible investing (SRI), environmental, social and governance (ESG) and Islamic finance together to increase their positive impact.

During the Responsible Finance & Investment Summit key stakeholders within responsible finance were brought together to build connections for new growth opportunities and more measurable impact. The RFI Summit played a vital role in connecting representatives from across the responsible finance industry to build on the growing cooperation between SRI, ESG and Islamic finance.


UKIFC Features in IIBI's New Horizon Magazine

The UKIFC features twice in the most recent edition of The Institute of Islamic Banking and Insurance's (IIBI) New Horizon magazine as issued on 4th May 2017.

Please click on the images below to download the articles:

 

For more information on the IIBI please click HERE.


UKIFC and CMS join forces to drive growth in Islamic finance industry

The Islamic Finance Council UK (‘UKIFC’) and international law firm CMS today announce an innovative partnership to help develop, support and optimise Islamic finance frameworks across the world. The aim is to offer a single, cohesive legal, advisory and capacity building service tailored to help government agencies, regulatory bodies and financial institutions to respond creatively and develop capacity for Islamic finance.

The partnership launches at a time when global Islamic finance assets are expected to rise from $2 trillion in 2015 to $3.5 trillion by 2021 - representing a 12% compound annual growth rate. Islamic banks are likely to be the main driver of this growth, with assets expected to reach $2.7 trillion by 20211.

“With a growing Muslim population, the potential future demand for Islamic finance is huge,” says Shakeel Adli, Head of Islamic Finance at CMS. “By bringing together a unique blend of practitioners who are recognised leaders in the global Islamic finance market, we are able to draw on our collective knowledge and expertise to provide a one-stop shop offering a truly unique and holistic approach to Islamic finance.”

UKIFC and CMS have recognised that the availability and effectiveness of Islamic finance in any given jurisdiction depends on meeting a number of challenges; the two most significant of which are creating robust regulatory frameworks and developing human talent. To effectively engage in Islamic finance, investors, consumers and financial institutions require regulatory clarity. It is also of critical importance that human talent is developed to address the unique challenges which Islamic finance presents.

The UKIFC and CMS partnership will assist jurisdictions to meet these challenges.

“As leaders in our respective fields, we share a commitment to growing the Islamic finance industry,” says Omar Shaikh, Advisory Board Member at UKIFC. “By combining our capabilities, we have created a uniquely comprehensive, best in class Government advisory providing support and guidance for government agencies, regulatory bodies and financial institutions as they look to build their capacity and create enabling legal and regulatory frameworks for Islamic finance.”

The UKIFC was established in 2005 as a specialist advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. Having contributed substantively to the development of the UK Government’s Islamic finance framework, the UKIFC has been appointed to advise several regulators and government ministries across Africa, Asia and Europe and has developed a proprietary methodology for government policy advisory within a secular context.

CMS meanwhile has extensive experience of successfully delivering Islamic finance regulatory advisory projects in multiple jurisdictions including Kazakhstan and Oman amongst others. Significantly, CMS has a geographic footprint which includes 65 offices spread across 38 jurisdictions. The firm has deep local roots with access to cross-border expertise and strong connections to Governments and associated agency bodies in each of the conventional, Islamic and ethical finance sectors.

“The new partnership between UKIFC and CMS offers a team of passionate and committed Islamic finance experts that genuinely combines legal, finance and capacity building ability that is unlike any other advisory firm,” Omar Shaikh concludes.

1Thomson Reuters State of the Global Islamic Economy 2016/17


UKIFC hosts impact investing round table

The 12th Edinburgh Ethical Finance Round Table once again took place in the offices of Maclay Murray & Spens LLP. Picking up on themes from the previous meeting, the topic was Impact Investment and how its outcomes can best be evaluated.

Amanda Young, who heads the Responsible Investments team at Standard Life Investments, gave the first presentation. Outlining the history of the ethical investment movement over the past 25 years she indicated how this had moved from purely negative screening to an active scrutiny of the social/environment returns from investments alongside the financial ones. Currently the main barrier to larger scale involvement from mainstream investors is the limited size and scale of investment opportunities, but she saw encouraging trends which should help to counter this – government pressure on businesses to report on these issues and at an international level the increasing acceptance of the UN Sustainable Development Goals were examples of important factors. Standard Life Investments’ own approach involves building an “impact stock universe” from its overall “buy” list of around 150 stocks. She emphasised that key factors were measurability and intentionality – evaluation of these is very much a developing process but there is a continuing focus on seeking to refine this.

The second presentation was given by Celia Tennant, CEO of Inspiring Scotland, which deals exclusively with philanthropic impact investment. Celia indicated that their focus was almost entirely on social impact, their process starting from identification of a social need around which they then raise funds and seek to identify a portfolio of the best placed third sector bodies to tackle the issue. The aim of venture philanthropy is to make an impact and share the outcomes and accordingly evaluation and measurement of these is essential, for which they use both internal and external assessors. To date Inspiring Scotland has donated over £100m to the Scottish voluntary sector spread over 300+ organisations.

A general discussion followed, focusing initially on the issue of whether a sufficient scale of qualifying businesses to allow impact investment to “go mainstream” is likely to emerge. The view on this was cautiously optimistic, pointing to the faster than expected rate of change in for example the development of electric cars and the growth of Green Bonds. Amanda Young did however see a considerable challenge in building platforms which would allow retail investors easy access to impact investment. On the question on measurement there was general recognition that this imposed onerous requirements on businesses but was nevertheless essential for development and signs were that mainstream organisations were increasingly accepting the requirement. There was consensus that continued focus on agreeing common approaches to evaluation and transparency of outcomes was essential and it was noted that the UK is leading internationally on measuring environmental impact.

The meeting concluded with a brief update on the Ethical Finance Hub project from Julian Parrott of Ethical Futures. The main recent development was securing premises at the Edinburgh Business School, Heriot-Watt University. The next crucial step was achieving confirmation of continued financial support from Scottish Government and it was hoped that this would be confirmed within the next month.


Omar Shaikh Participates in UN Event in Turkey

UKIFC Advisory Board member Omar Shaikh was invited to participate in a prestigious panel on Islamic finance and impact investing at the United Nations Development Programme’s (UNDP) Istanbul International Centre for Private Sector in Development's (IICPSD) 7th Bosphorus Summit which took place on 29th November 2016.

IICPSD is one of six UNDP global policy centres with a special mandate to focus on the role of the private sector in development. Recently UNDP IICPSD and IDB established the Global Islamic Finance and Impact Investing Platform (GIFIIP) to support the implementation of the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals.

Omar was able to share insights on Islamic finance and social impact while moderating the "Towards an Islamic Finance and Impact investing Ecosystem" panel session. The panel brought together the experience of practitioners and investors focused on scaling up Islamic finance for impact investing. The discussions sought to identify future directions for a global Islamic finance and impact investing business ecosystem in support of the Sustainable Development Goals. Speakers for the sessions were:

  • Kıvanç Çubukçu, Project Manager, Kois Invest, Belgium
  • Prof. Abdul Ghafar Ismail, Head of Division, Islamic Banking and Financial Economics & Islamic Research and Training Institute, Islamic Development Bank, KSA
  • Hussam Abu Issa, Vice President, Salam International, Qatar
  • Aamir Abdul Rehman, Managing Director, Fajr Capital, UAE
  • Dr. Serdar Sümer, CEO, Aktif Bank, Turkey
  • Babur Tolbayev, CEO, Mol Bulak, Kyrgyzstan
  • Ufuk Uyan, General Manager, Kuveyt Türk, Turkey

The Honorary Opening Speech was delivered by Recep Tayyip Erdoğan, President of the Republic of Turkey.