Concept Paper on Shariah Governance Framework for Islamic Financial Institutions

Concept Paper on Shariah Governance Framework for Islamic Financial Institutions
Bank Negara Malaysia, May 2010

This concept paper was released recently and its proposed framework is divided into six sections:

Section I - General Requirements of Shariah Governance Framework
General requirements of the Shariah governance structure that describes the essential key functional or key organs

Section II - Oversight, Accountability & Responsibility
Outlines the level of accountability and responsibility of the board of directors, Shariah committee and management of the IFI.

Section III - Independence
Aims at safeguarding the independence of the Shariah committee in ensuring sound Shariah decision, and emphasis on the role of the board of directors in recognizing the independence of the Shariah committee.

Section IV - Competency
Highlights requirements and expected competencies to ensure key functions are capable of implementing Shariah governance.

Section V - Confidentiality & Consistency
Minimum set of rules that emphasis on the importance of observing and preserving confidentiality and improving consistency by the Shariah committee.

Section VI - Shariah Compliance & Research Functions
Prescribe the functions of the internal Shariah review, Shariah audit, Shariah risk management process and the Shariah research functions.

Concept Paper on Shariah Governance Framework for Islamic Financial Institutions

The Rise and Fall of Gulf Finance House

The Rise and Fall of Gulf Finance House
By Mohammed Khnifer, Aatef Baig, and Frank Winkler
Reading University, May 2010

This paper dissects the balance sheet and business model of Gulf Finance House (see GFH dividend/stock price chart), and scrutinizes the existence of a "pre-exit premium" in their activities - on top of the usual exit fees and/or performance fees. The study suggests that this practice (uncommon even for conventional Private Equity businesses - much less for an Islamic Private Equity house) was pioneered by GFH and it is this same practice that brought them down to their knees. This is perhaps the first case study wholly dedicated to GFH, and it goes on to suggest that there is a connection between the Murabaha model and their Islamic Private Equity model.

Many thanks to Mohammed Khnifer for sharing their paper.

The Rise and Fall of Gulf Finance House

Islamic Finance and Economics as Reflected in Research and Publications

Islamic Finance and Economics as Reflected in Research and Publications
S. Nazim Ali, Ph.D.
Harvard Law School

"The development of the Islamic Finance (IF) industry is closely linked to the research pursued in its field. As soon as new theories are generated by researchers, the industry picks them up and implements them. And as soon as the industry encounters new problems, they turn to the researchers to find a way to overcome them. A closer look at the relationship between research and the industry makes several trends apparent. This paper aims to discuss and analyze those trends so as to offer a general understanding of this burgeoning field."

Islamic Finance and Economics as Reflected in Research and Publications

Deloitte's New Islamic Finance Portal

The Deloitte Islamic finance portal has been recently launched as a resource for all participants in the Islamic Finance industry and will feature regular insights from practitioners and their Sharia'a Scholar. They will discuss a variety of topics including the key opportunities and challenges facing the Islamic Finance industry.

In addition, a multimedia glossary section is available to those new to the industry seeking to learn more. Topics covered in these webcasts include Musharaka, Mudarabah, Murabaha, Ijarah, Salam, Istisna' and Sukuk.  This is complemented with an interview with their own Sharia'a Scholar, Mufti Hassaan Kaleem, who provides a candid discussion on his background and his views of the Islamic finance industry. Furthermore, there are periodical blogposts from their Global Leader in Islamic Finance (Daud Vicary Abdullah) in the View from the front segment of the site.

Deloitte's New Islamic Finance Portal

Deloitte Webcast: Interview with Sheikh Muhammad Taqi Usmani

For their new Islamic financ portal, Deloitte has as an inaugural feature an exclusive interview with Sheikh Muhammad Taqi Usmani (Chairman of the AAOIFI Sharia'a board), in which he revisits some of the important Sharia'a issues which are currently being discussed in the industry.  Amongst the topics covered in the webcast, Sheikh Taqi Usmani provides clarity on the recent rulings from the OIC Fiqh Academy on the use of Tawarruq, and gives his view on the application of Islamic Finance in the post financial crisis era.

Deloitte Webcast: Interview with Sheikh Muhammad Taqi Usmani

An Introduction to Takaful – An Alternative to Insurance

An Introduction to Takaful – An Alternative to Insurance
By Muhammad Ayub
Senior Joint Director, Islamic Banking Department
State Bank of Pakistan, Karachi

An Introduction to Takaful – An Alternative to Insurance

Islamic Banking: Interest-Free or Interest-Based?

Islamic Banking: Interest-Free or Interest-Based?
Beng Soon Chong, Nanyang Technological University (NTU)
Ming-Hua Liu, University of Macau
Pacific-Basin Finance Journal

October 2007

Abstract: A unique feature of Islamic banking, in theory, is its profit-and-loss sharing (PLS) paradigm. In practice, however, we find that Islamic banking is not very different from conventional banking. Our study on Malaysia shows that only a negligible portion of Islamic bank financing is strictly PLS-based and that Islamic deposits are not interest-free, but are closely pegged to conventional deposits. Our findings suggest that the rapid growth in Islamic banking is largely driven by the Islamic resurgence worldwide rather than by the advantages of the PLS paradigm and that Islamic banks should be similarly regulated as their western counterparts.

Islamic Banking: Interest-Free or Interest-Based?

A Roadmap for Making Islamic Finance Sources More Accessible

A Roadmap for Making Islamic Finance Sources More Accessible
The Role of Secondary Services in the Dissemination of Research
S. Nazim Ali
Director, Islamic Finance Project
Harvard Law School

Abstract: "Secondary services, particularly electronic databases, have revolutionized research by bringing together more resources for one’s disposal. This virtual network has exponentially increased the availability of information, thus making relevancy one of the most important questions in data collection. The Internet may be useful for finding introductory information because the turn-over time is short and the resources are practically unlimited. However, the internet is inherently flawed as a research tool for serious researchers because there is no barrier to entry, hence regardless of credentials or veracity anyone can post anything as a “fact.” The issue of quality assurance then becomes important. Quality assurance can stem from professional authority (who is writing the article), institutional authority (where is the research being undertaken), or a publisher’s authority (by whom is it being published). Therefore, though the Internet is a good source of industry news, market
news, and consumer perceptions, established outlets (both print media and electronic) should be preferred."

A Roadmap for Making Islamic Finance Sources More Accessible

Multimedia & Interactive

We have made some additions to the blog - there is a new "Multimedia & Interactive" boxlet on the top right hand side to easily navigate to this content (alternatively all these posts can be found using the Multimedia label).

You will also notice we separated our document archive (right hand side menus), we now have two different sets: "Industry Reports & Articles" and "Academic Papers & Case Studies". We are finding it increasingly necessary to develop a more precise catalogue, and in that sense we look forward to contribute to the Islamic Finance Library as it develops.

Last but not least we have added 'addtoany' functionality, this will enable you to share any specific post with your friends/peers regardless of what network you use (Linkedin, Facebook, etc, etc).

Multimedia & Interactive

Opalesque Islamic Finance Intelligence - Eighth Issue

The eighth issue of Opalesque Islamic Finance Intelligence is here (download the pdf version), the underlying thread uniting all the content for this month is looking at Islamic finance from a fresh and open perspective. This month's editorial outlines how Islamic finance is being developed/introduced in new markets - and whether the industry's long term future is being mortgaged for some short term gains. This is complemented in the Featured Resource (with a list of studies that look at Islamic finance from a global or macroeconomic point of view) as well as the Industry Snapshot (with an analysis of the recent report by the IFSB, IRTI and the IDB).

The Featured Structure section welcomes Mohammed Khnifer as he takes a novel approach as to the permissibility of organized tawarruq. Lex Islamicus takes on Islamic commercial contracts as Khalil explores the issues of good faith and fair dealing. The Kulliyyah Korner hears from Ahmed Mohamed Badr-Eldin and profiles his research on adapting conventional ratios to measure the performance of Islamic banks.

Furthermore, the Opinion Column hears from Edib Smolo, from the International Shari’ah Research Academy (ISRA), and his take on the future prospects of the industry. As part of our ongoing industry survey (The Islamic Window), Joy Abdullah provides an overview of the initial findings and some of the most striking signals from consumers.

Welcoming your comments & suggestions and a reminder that you can check the ever-growing archive of Opalesque Islamic Finance Briefing and Opalesque Islamic Finance Intelligence, all available free. In addition, we continue to expand the reach of our industry survey (see reference link) and appreciate it if you can help us disseminate it further.

Download the complete issue of Opalesque Islamic Finance Intelligence here.

Alternatively you can read each section separately:
Editor’s Note: Disclosure, Due Diligence & Death Spirals
Featured Resource: The Macro Perspective
Featured Structure: Maslaha and the Permissibility of Organized Tawarruq
Lex Islamicus: In Good Faith
Kulliyyah Korner: Measuring the Performance of Islamic Banks by Adapting Conventional Ratios
Opinion Column: Islamic Finance Practices at the Crossroads
The Islamic Window: Preliminary Findings
Industry Snapshot: IFSB-IRTI-IDB Islamic Finance and Global Stability Report

Opalesque Islamic Finance Intelligence - Eighth Issue

The Coming of Age of Islamic Structured Products

The Coming of Age of Islamic Structured Products
Association of Islamic Banking Institutions Malaysia
December 2008

"Islamic finance is coming of age. Today, for the first time, Islamic structurers in Malaysia and the Middle East are starting to create new financial products and infrastructure from scratch; developments that do not simply wrap their conventional counterparts in a Shariah structure but which are Islamic from start to finish."

The Coming of Age of Islamic Structured Products

Islamic Financing Arrangements Used in Islamic Banking

Islamic Financing Arrangements Used in Islamic Banking
Ehsan Zar Rokh
University of Tehran
April 2007

Abstract: Islamic finance is an old concept but a very young discipline in the academic sense. It lacks the required extent and level of theories and models needed for expansion and implementation of the framework provided by Islam. In these circumstances, unawareness and confusion exist as to the form of the Islamic financial system and instruments.

The main difference between the present economic system and the Islamic economic system is that the later is based on keeping in view certain social objectives for the benefit of human beings and society. Islam, through its various principles, guides human life and ensures free enterprise and trade. That is the reason why the conventional banker does not have to be concerned with the moral implications of the business venture for which money is lent.

Islamic Financing Arrangements Used in Islamic Banking

Tools For Controlling Monetary Variables in the Islamic Banking System

Tools For Controlling Monetary Variables in the Islamic Banking System
Prof. Dr. Abdul Ghafar Ismail
ISRA Research Paper (No. 13/2010)

Tools For Controlling Monetary Variables in the Islamic Banking System

State Bank of Pakistan - Rules and Regulations for Islamic Banking

Rules and Regulations for Islamic Banking

Instructions and Guidelines for Shariah Compliance

Guidelines for Islamic Microfinance Business by Financial Institutions

Risk Management Guidelines for Islamic Banking Institutions

Guidelines on Islamic Financing for Agriculture

Guidelines For Opening Of Stand Alone Branches for Islamic Banking

Fit & Proper Criteria for Appointment of Shariah Advisors

State Bank of Pakistan - Rules and Regulations for Islamic Banking

What Does Islam Say About Corporate Social Responsibility (CSR)?

What Does Islam Say About Corporate Social Responsibility (CSR)?
Asyraf Wajdi Dusuki
Assistant Professor, Department of Economics
Kulliyyah of Economics and Management Sciences, IIUM

May 2008

"The escalating social and economic problems brought about by globalization have raised new questions as well as expectations about governance, ethical and social responsibilities. Consequently Corporate Social Responsibility (CSR) has emerged and developed rapidly as a field of study. Many Western theoreticians attempt to provide theoretical, moral and ethical groundings for CSR initiatives. Nevertheless such endeavors have received wide criticisms for problems relating to justification, conceptual clarity and possible inconsistency. The endeavors also fail to give adequate ethical guidance to business executives who must decide which courses to pursue and how much commitment to give. The main objective of this paper is to study the concept of CSR, which has gained popularity and wide acceptance amongst Western business community today from an Islamic perspective. This paper provides discussion on the Islamic alternative views on the various theories underpinning the construct of CSR. This view, which prevailed within the ambit of Shari’ah, is very influential in dominating the thinking and behaviour of approximately 1.6 billion Muslims across the globe."

What Does Islam Say About Corporate Social Responsibility (CSR)?

Towards Developing a Successful Islamic Financial System

Towards Developing a Successful Islamic Financial System

by Professor Sudin Haron
KLBS - Working Paper Series 003
2004

Towards Developing a Successful Islamic Financial System

Network Analysis Among Sharia Scholar version 4.0 - Funds@Work AG

Here is the latest report covering the Sharia Scholar Landscape from Funds@Work, which can be accessed directly from their site here.

Their initial study was one of the earliest posts in our blog (more than a year ago), for comparison purposes their earlier report is here.

It is much more comprehensive than previous sharia scholar reports previously created and above all introduces new perspectives such as the tertiary institutions that leading scholars attended. This will allow in the future to screen for less prominent scholars that have a similar educational background as more prominent ones for example.

In addition, Funds@Work plans to integrate this data into an Islamic instrument database, such as a database of 1000 Sukuk. This will allow academics and practitioners alike to find among others scholars most appropriate for cooperation by analyzing their expertise (e.g. sector/country exposure), experience, position (e.g. chairman) educational background (e.g. degrees, majors or ongoing professorships), company involvement, and identifying events they should attend, at which scholars speak.

It will also assist users in assessing business and partnership potentials by searching institutions, e.g. by country or sector, and reviewing their scholar board compositions as well as their involvement in the Sukuk industry.

It will also be of help in identifying sukuk investment or structuring opportunities by viewing Sukuk that have been approved by the scholars that users specify, or by obtaining the list of scholars that have approved each Sukuk or that are linked to companies which were involved in the sukuk issuance. They aim to broaden the universe to also incorporate other Islamic products such as e.g. mutual funds.

It will complement the many good initiatives that have been recently launched. The whole industry will profit from greater transparency and new insights.

Network Analysis Among Sharia Scholar version 4.0 - Funds@Work AG

Embracing Islamic investment in Australia using the Malaysian model

Embracing Islamic investment in Australia using the Malaysian model: challenges and opportunities
Mahmood Nathie
Griffith Islamic Research Unit
March 2008

"This paper sets out the principles and application of Islamic law relating to IEF’s. It argues that a model incorporating IEF values may be possible for adoption in Australia supported by institutional involvement – some of whom are already actively in engaged in managing IEF’s overseas through associated financial institutions. It presents evidence of the demand for such investment alternatives, especially from individuals with investments tied up in superannuation funds. It argues that Australia should not ignore the capital market trends in the Asian economies where IEF’s are becoming increasingly popular".

Embracing Islamic investment in Australia using the Malaysian model

IFSB-IRTI-IDB Islamic Finance and Global Stability Report

Islamic Finance: Global Financial Stability
IFSB-IRTI-IDB
April 2010

"The Report examines the intrinsic strength of the Islamic finance model, the state of the Islamic financial services industry and challenges and strategies for strengthening financial stability in the Islamic financial services industry."

To read the press release click here.
To download the complete report click here.

Contents:
A. Appreciating the Islamic Finance Model
I. Key Principles

B. The State of Islamic Financial Services Industry
I. Increasing Significance of Islamic Finance in the Global Financial System
II. Performance of Islamic Banks
III. Performance of Islamic Indices

C. Challenges and Strategies for Strengthening Financial Stability in the Islamic Financial System
I. Strengthening Islamic Financial Infrastructure
II. Accelerating Effective Implementation
III. The Establishment of a Platform for Constructive Dialogue: Islamic Financial Stability Forum

IFSB-IRTI-IDB Islamic Finance and Global Stability Report

Case Study: Banking Behavior of Islamic Bank Customers in Bangladesh

Banking Behavior of Islamic Bank Customers in Bangladesh
Mohammad Saif Noman Khan*, M. Kabir Hassan** & Abdullah Ibneyy Shahid***
IBTRA

* Institute of Business Administration,Uiversity of Dhaka, Bangladesh
** Ph.D.Department of Economics and Finance, University of New Orleans
*** Asian Tiger Capital Partners, Panthapath, Dhaka

Abstract: "This study investigates the banking behavior of Islamic bank customers in Bangladesh. By collecting data from a sample of 100 customers of Islamic banks, researchers conducted a comprehensive profile analysis, a number of chi-square tests, and t tests and found a number of key findings as to the behavior of Islamic bank customers in Bangladesh. First, most of the customers of Islamic banks fall in the age category of 25-35 years. Islamic bank customers are highly educated and have durable relationships with the banks. Second, high customer awareness and usage exist for various deposit mobilization instruments but there is not high awareness and usage of any individual financing facilities of Islamic banks. Third, income category and education have a significant role in customers’ usage of various Islamic bank products/services. Fourth, customers seem to be satisfied with a number of products/services of Islamic banks. Fifth, among the service delivery elements, ‘employees’ deserve an immediate attention for improving customer satisfaction. Finally, ‘religious principles’ is the key bank selection criterion of the Islamic bank customers, while customers’ demography plays some role in determining which selection criteria matter more than others do."

Case Study: Banking Behavior of Islamic Bank Customers in Bangladesh

An Analytical Review of Different Concepts of Riba (Interest) in the Sub-Continent

An Analytical Review of Different Concepts of Riba (Interest) in the Sub-Continent
Aziz, Farooq, Mahmud, Muhammad and Karim, Emadul (2008)
Federal Urdu University of Arts, Science and Technology,
Karachi Campus, Karachi, Pakistan, Khadam Ali Shah
Bukhari Institute of Technology (KASBIT)

Abstract: "The traditional concept of Riba (interest) is an excess amount on loan, which creditor receives from debtor on the repayment of loan. There is almost a consensus on the sprit of this concept that it is traditional thought or school; but along with that some other point of views also exist, which present Riba, in somewhat different ways, will be termed as non-traditional approach in this paper. Both of these schools are agreed on the point that, Riba is just restricted to debt, and the increment on it is Riba; but the main difference among these is that: former approach claims that, each and every addition on loan, regardless of purpose and time duration of loan is Riba; but, the later approach demand’s some room for that on different grounds. Actually both of them do not have any sound base. When the concept of unearned income (the income, which is not the result of human labor), is a recognized fact in Islamic economics in different forms, like: ijara (rent), Mudoraba and Mazara’a (Share Cropping); then definitely no logical reason is left to avoid excess income on loan. Both approaches are just unable to give a concrete concept of Riba."

An Analytical Review of Different Concepts of Riba (Interest) in the Sub-Continent

Economics of Tawarruq

Economics of Tawarruq - How its Mafasid overwhelm the Masalih
Tawarruq: A Methodological issue in Sharī`a-Compliant Finance
February 2007
Mohammad Nejatullah Siddiqi

Abstract: "This paper examines the impact of tawarruq on the economy. It demonstrates through macroeconomic analysis that the harmful consequences of tawarruq are much greater than the benefits generally cited by its advocates. It concludes that a financial instrument whose mafasid (harms) are much greater than masalih (benefits) cannot be characterized as sharī`a - compliant".

Economics of Tawarruq

AAOIFI on Screening Islamic Products

Source: Thomson Reuters

AAOIFI on Screening Islamic Products

INCEIF Webcasts

INCEIF has a short but quite diverse library of webcasts relating to various Islamic finance topics:

The Global Financial Meltdown : Islamic Finance Beyond Financing
Prof Datuk Dr Noor Azlan Ghazali, Director, Malaysian Development Institute (MDI), Economic Planning Unit, Prime Minister’s Department
December 2008

INCEIF Global Forum 2007
Nobel Laureate Joseph Stiglitz, Professor, Columbia University
August 2007

Risk Management in Islamic Finance
Professor Rodney Wilson, Durham University
March 2007

Islamic Indexes and The Development of Islamic Capital Markets
Mr. A.Rushdi Siddiqui,
Global Director, Islamic Market Index Group
March 2007

Intellectual Discourse Series
Bank Negara Malaysia
February 2007

INCEIF Webcasts

Market Survey: The Islamic Window

The goal of this market survey is to help measure the level of awareness, perception, misconception and overall understanding of consumers towards the Islamic finance industry (and its various products and services). The survey results will enable us to open a window into the mind of current (as well as prospective) consumers.

The rationale behind the survey is further developed by Joy Abdullah in an article that was featured in the March issue of Opalesque Islamic Finance Intelligence: "The Islamic Window: Consumer Perception and Market Research in Islamic Finance" (refer to pages 24-25).

It is not meant to be a scientific survey but it certainly aims to be as representative as possible. In that sense we need the largest possible sample size for it to succeed - and for this we need your help by sharing the survey with your friends, family, colleagues, classmates, etc. You can use the below link to access the survey:

http://www.kwiksurveys.com/online-survey.php?surveyID=KKNOKO_e9d1d68

We will share the findings in a dedicated section of Opalesque Islamic Finance Intelligence (free subscription) where we will identify consumer segments, market trends, as well as any country-specific issues.

Jointly developed and supported by:
Opalesque Islamic Finance Intelligence
Daily Baraka
Islamic Finance Resources Blog

Market Survey: The Islamic Window

Opalesque Islamic Finance Intelligence - Seventh Issue

Welcome to the seventh issue of Opalesque Islamic Finance Intelligence (download the pdf version), once again we bring together a wide array of content that is as diverse as the industry itself. Each of our editions has always delivered a wide range of topics (as this allows us to present relevant material for everyone), but it is increasingly clear that inquisitive research, relevant empirical evidence and timely academic studies are in dire need. This is not only true of their origination but also of their dissemination, thus we gravitate around this particular theme for OIFI VII.

To begin with, our editorial section delves into the realm of data and information providers and how this space is evolving. In addition, we introduce a new academic-oriented section which we affectionately term the 'Kulliyyah Korner'. Its aims is to provide a glimpse into the latest topics that are being discussed and analyzed across the industry - whether this is within the context of a faculty (or kulliyyah), think tank, etc. Above all, the Korner aims to highlight the rich material available from academic institutions (usually available through industry periodicals and journals) while presenting them to a wider audience.

Hence the first installment of Kulliyyah profiles the research of Anne-Sophie Gintzburger, who has developed an extensive study on the regional variations of Islamic financial instruments as part of her thesis at the Australian National University. We complement this with our Featured Resource which outlines a variety of past & present case studies at the country-specific level. Furthermore, Lex Islamicus sees Khalil exploring the Universality and Codification of Islamic Contracts, as it pertains to their enforceability of these in a court of law and the relationship with Lex Mercatoria.

Nikan provides further insights into Shariah compliant principal protected notes as part of the Featured Structure section. This allows for an interesting contrast to our Fund Manager Interview which talks to Nick Barisheff, President & CEO of Bullion Management Group (BMG), and their recent entry into the field with their Shariah compliant BMG Bullion Fund. Taking a look forward, our Opinion Column hears from Professor Mahmood Faruqui, who inquires on where can Islamic Finance contribute as part of repair initiatives in the aftermath of the global financial crisis. Finally, Joy Abdullah makes inquiries in our Industry Snapshot section regarding the need for consumer data and market statistics - with a particular focus on investor awareness and their perceptions of the Islamic finance industry.

We welcome your comments & suggestions and a reminder that you can check the ever-growing archive of Opalesque Islamic Finance Briefing and Opalesque Islamic Finance Intelligence, all available free (see reference link).

Download the complete issue of Opalesque Islamic Finance Intelligence here.

Alternatively you can read each section separately:

Editor's Note: Learning Rushdi-Speak
Featured Resource: Country-Specific Case Studies
Featured Structure: Shariah Compliant Principal Protected Notes
Fund Manager Interview: Nick Barisheff, President & CEO, Bullion Management Group Inc
Lex Islamicus: Universality and Codification of Islamic Contracts
Kulliyyah Korner: Regional Variations on the Permissibility of Islamic Financial Instruments
Opinion Column: Repair Initiatives Post Banking Crises - Can Islamic Finance contribute?
Industry Snapshot: The Islamic Window: Consumer Perception and Market Research in Islamic Finance

Opalesque Islamic Finance Intelligence - Seventh Issue

Islamic Finance - Australia

Islamic Finance - Australia

Austrade

February 2010

The booklet Islamic Finance provides a detailed explanation of the opportunities that booming Shariah-compliant investment and banking offers Australia’s financial services sector.

Islamic Finance - Australia

Islamic finance: when will an English court consider Shari'a compliance?

Islamic finance: when will an English court consider Shari'a compliance?
Clifford Chance LLP
Qudeer Latif, Debashis Dey, Leonard Cleland, Graham Lovett, James Abbott and Paul McViety
March 2010

"As the global economic slowdown continues and more debt defaults materialise, it is inevitable that the litigation of Islamic financing structures will become increasingly common - notably in the English courts, as English law governs a significant number of cross-border Islamic finance arrangements. Stakeholders in the Islamic finance industry will be focusing closely on the outcome of these disputes, as they look to ensure that their products remain sufficiently robust when faced with a period of continued economic uncertainty.

This briefing considers the recent TID / Blom litigation and how this should be distinguished from the Shamil Bank litigation."

Islamic finance: when will an English court consider Shari'a compliance?

DFSA - Islamic Finance Handbooks

The Dubai Financial Services Authority (DFSA) has launched a series of electronic Islamic finance tailored handbooks (press release here). The five tailored handbooks relate to five different types of Islamic finance activities. Each handbook contains the parts of the DFSA Rulebooks which apply to that particular area of activity namely:

• Islamic Banking;
• Islamic Investment Business, other than Operating Funds;
• Islamic Insurance;
• Islamic Insurance Intermediation and Management; and
• Operation of Islamic Funds.

DFSA - Islamic Finance Handbooks

Inaugural SC – OCIS Forum

Inaugural SC – OCIS Forum
“Contribution of Islamic Finance Post Global Financial Crisis”
Tuesday 16 March 2010
Securities Commission Malaysia

The Securities Commission Malaysia (SC) and the Oxford Centre for Islamic Studies (OCIS) have collaborated to create an international platform for a discourse on topical issues and challenges faced in bringing Islamic finance into the mainstream. This Forum aims to facilitate wider learning and encourage appreciation and acceptance of topical Islamic finance issues.

Kindly click here to view the complete agenda.

Panelists

• Dato’ Mohd Razif Abd Kadir, Deputy Governor, Bank Negara Malaysia (BNM)
• Dr Abbas Mirakhor, Former Executive Director, International Monetary Fund (IMF)
• Dr Mohamed Ali Elgari, Professor of Islamic Economics, King Abdul Aziz University, Jeddah
• Abdulkader Thomas, President & CEO, SHAPE™ Financial Corp, USA and Kuwait
• Professor Habib Ahmed, Sharjah Chair in Islamic Law and Finance, Durham University, UK
• Davide Barzilai, Banking Partner, Norton Rose LLP, UK
• Andri Aidham Ahmad Badri, Partner, Kadir Andri & Partners, Malaysia
• Rafe Haneef, Fajr Capital, Malaysia

Inaugural SC – OCIS Forum

Process for Standardization of Shariah Practices

Process for Standardization of Shariah Practices
Islamic Banking Department
State Bank of Pakistan, Karachi

Process for Standardization of Shariah Practices

Sukuk Report IV

MIFC - Islamic Capital Market Products:

Fundamentals of Sukuk

Musyarakah Structure - 1
Musyarakah Structure - 2
Exchangeable Sukuk Structure
Exchangeable Sukuk Structure - Exchangeable Mechanism
Al-Istisna’ Structure

Summary of Sukuk Structures

Sukuk Report IV

Sukuk Report III

Malaysia Debt Securities and Sukuk Market
A Guide for Issuers and Investors
A Joint Publication by Bank Negara Malaysia and Securities Commission Malaysia
2009

Sukuk Report III

Sukuk Report II

Guide to Issuing Sukuk from the DIFC
Prepared by Clifford Chance, Amanie Consulting, the DFSA and the DIFC Authority, the guide provides a summary of sukuk structures and information on issuing sukuk in DIFC.

Sukuk Report II

Sukuk Report I

The Zawya Collaborative Sukuk Report is an agenda setting study for the growth and development of the global Sukuk industry. The report consists of thought leadership articles contributed by a number of industry leaders, survey analysis showing the matches and mismatches in supply and demand appetite, and also trend analysis, etc.

A full version of the report is available here (registration required).

Sukuk Report I

ISRA Journal - Volume 1

The inaugural issue of the ISRA International Journal of Islamic Finance (ISRA journal) has been available since December so we are unsure how we could miss it! The journal can be downloaded for free (no registration required) but it is the academic rigor and second-to-none peer review process that makes it really impressive. Take note that "the practitioner’s article discusses cases studies from the real life experience of the practitioner author. The Journal also highlights select currently ongoing research projects conducted by ISRA’s researchers under ‘Research Notes’. Though the research projects are not complete its introduction to the outside will engage those who may be doing parallel or similar research".

ISRA International Journal of Islamic Finance
Volume 1, Issue 1

December 2009

Academic Articles
Financial Crisis: Risks and Lessons for Islamic Finance
- Habib Ahmed
The Global Financial Crisis, Risk Management and Social Justice in Islamic Finance
- M. Kabir Hassan and Rasem N. Kayed
Shari'ah Governance for Islamic Financial Institutions
- Rodney Wilson
Shari'ah Parameters on the Islamic Foreign Exchange Swap as a Hedging Mechanism in Islamic Finance
- Asyraf Wajdi Dusuki

Practitioners' Articles
From “Asset-backed” to “Asset-light” Structures: The Intricate History of Sukuk
- Rafe Haneef

Research Notes
Islamic Pricing Benchmark
- Edib Smolo
Alternative Dispute Resolution in Islamic Finance: Legal Challenges and the Way Forward
- Hakimah Yaacob
A Synthesis of Shari'ah Issues and Market Challenges in the Application of Wa'ad in Equity-based Sukuk
- Shabnam Mokhtar
Shari'ah Parameters of Islamic Derivatives in Islamic Banking and Finance
- Sherin Kunhibava

ISRA Journal - Volume 1

Islamic Microfinance Challenge 2010

Islamic Microfinance Challenge 2010: Innovating Sustainable, Scalable, and Market-Driven Models

"CGAP, Deutsche Bank, Islamic Development Bank, and Grameen-Jameel are pleased to announce Islamic Microfinance Challenge 2010: Innovating Sustainable, Scalable, and Market-Driven Models. The contest is a joint initiative to promote the innovative design of Shariah-compliant products for Islamic microfinance clients.

We are seeking original Islamic microfinance business proposals which are profitable, sustainable, scalable, and Shariah-compliant. Finalists of this competition will be awarded with grant funds as well as need-based technical support to launch a pilot project of their proposed business idea.

This is an opportunity for you to showcase innovative business ideas, gain industry-wide recognition, and benefit from the funds and technical expertise of leading institutions in the microfinance and Islamic finance sectors."

The deadline for submission is May 3rd, 2010.
For further details check their website here.

Islamic Microfinance Challenge 2010

Research In Islamic Economics: The Missing Fard ‘Ayn Component

Research In Islamic Economics: The Missing Fard ‘Ayn Component
Mohamed Aslam Haneef
Professor, Department of Economics, International Islamic University Malaysia
January 2009

"While acknowledging the events over the last 30 years both internationally and in Malaysia, this paper wants to focus on an area that somehow has been overlooked. Despite the active interest in the area of Islamic banking and finance, one is still faced with the fact that research in Islamic economics has declined, the enthusiasm of the late 1970s and 1980s has waned, the growth rate of people still actively working in Islamic economics has declined and the second/third generation of Islamic economists have become quite a rare breed. This is why this 3rd Islamic Economics Congress and the effort by the organizers to focus on strategic areas for the future of the ummah are greatly welcome. The paper will try to argue that we must devote sufficient resources, both financial and human, to do research in what is called the ‘missing fard ‘ayn’ component in Islamic economics, banking and finance, i.e. the foundations or usul of Islamic economics"

Research In Islamic Economics: The Missing Fard ‘Ayn Component

IFSL Report: Islamic Finance 2010

A new IFSL report on Islamic Finance 2010 estimated that the global market for Islamic financial services, as measured by sharia compliant assets, rose by a quarter to $751bn at end-2008. The Islamic finance sector is feeling the influence of the downturn in the global economy with asset growth likely to have paused for breath in 2009. Commercial banks account for the bulk of the assets with investment banks, sukuk issues, funds and takaful making up the balance.

Useful to compare to their 2008 and 2009 reports as well.

IFSL Report: Islamic Finance 2010

Case Study: Islamic Banking in Pakistan

Our previous country-specific piece focused on Jordan, here we include a recent thesis paper which takes a comparative approach to Islamic vs conventional banking in Pakistan. We are increasingly seeing this kind of approach, in this case the author takes the analytical road using a variety of statistical tests of significance for mutiple balance sheet metrics.

Performance of Islamic Banking and Conventional Banking in Pakistan: A Comparative Study

Muhammad Shehzad Moin

University of Skövde

August 2008

Abstract: "Islamic banking and finance in Pakistan started in 1977-78 with the elimination of
interest in compliance with the Principles of Islamic Shari’ah in Islamic banking practices. Since then, amendments in financial system to allow the issuance of new interest-free instrument of corporate financing, promulgation of ordinance to permit the establishment of Mudaraba companies and floatation of Mudaraba Certificates, constitution of Commission for Transformation of Financial System (CTFS), and the establishments of Islamic Banking Department by the State Bank of Pakistan are some of the key steps taken place by the governments."

Case Study: Islamic Banking in Pakistan