WCOA 2006 Istanbul
Islamic Finance
16th November 2006
www.sii.org.uk
Ruth Martin
Managing Director
SII Involvement in Islamic
Finance
Who we are
Setting professional standards
The IFQ
Educational standards as benchmarks for industry
Standards first or Qualifications first?
Key Information
Origins in London Stock Exchange Setting
professional standards
A not-for-profit organisation
Board of Trustees
85 Full-time Staff
25,000 individual members
8,000 student members
38,000 exams each year
10,000 publications sold pa
International offices
53 countries
Mission Statement
To set standards of professional
excellence and integrity for the
securities and investment industry,
providing qualifications and promoting
the highest level of competence to our
members, individuals and firms
Three Main Activities:
KNOWLEDGE: An Awarding Body for
Qualifications
SKILLS: A provider of Continuing
Professional Development
BEHAVIOUR: A leader in Integrity
& Ethical thinking
Who Takes our Qualifications?
Aviva
Barclays
Citigroup
Credit Suisse
Deutsche Bank
Goldman Sachs
HSBC
J P Morgan
Lloyds TSB
Merrill Lynch
Morgan Stanley
Nomura International
Alliances
Alliances & Partnerships vital
Firms
Training Deliverers
Professional bodies
Exam delivery partners
Islamic experts
Securities & Investment Institute
A wide range of qualifications in the
UK Financial services Industry
Used by firms to satisfy the Regulator
to ensure staff are competent
Supported by HM Treasury
On the appropriate list of the
UK Government’s Financial Services
Skills Council (FSSC)
An approved Awarding Body by
the UK Government regulator in
Education, the QCA
Reputation as Centre of Excellence
Setting Professional Standards
Knowledge
and
understanding
Competence
Continuing personal
and professional
development
Skills
and
experience
Why a UK Professional Body for
the Islamic Finance Qualification?
Professional bodies focus on the conduct of the person as well as the passing of exams
The beliefs and philosophies underpinning Islam are totally synergistic with the
professional body ethos
SII experience of setting Regulatory exams for Middle East Regulators
As the UK professional body for the Investment industry, this led to SII involvement in IFQ
SII familiar with working to national standards; deliver leading compliance exams in UK
for FSA
SII’s respect for necessary involvement of Islamic finance practitioners and training skills:
partnership with the Ecole Superieure des Affaires – the Leading Business School in the
Middle-East
Islamic Finance Qualification
An added-value for a fast growing industry
Initiated by Leading Central Bank - Banque du Liban
Partnership with leading Business School in Middle East - ESA
Advisory council for Islamic Finance
SII leader in conventional investment banking standards of
competence
SII leader in ethics and integrity for investment sector
ESA successful experience in Islamic Finance Through its foundation
for research and development in Islamic Finance: “Al Multaqa”
Draw on experience working with Government regulators in Egypt,
UAE, Saudi Arabia, Dubai, Lebanon
Recognition of value of wide spectrum of Islamic finance specialists
and authors from many countries
What is unique about IFQ
Islamic Finance from both a technical perspective
and Sharia’a perspective
Existing employees
New employees
Young people seeking a career
Muslims and non Muslims
Tested globally by Computer
Islamic Expertise
+
Training and
Education expertise
=
IFQ
IFQ
Setting international benchmark accessed by all
Available from March 2007
Dr Abdul Sattar Abu Ghuddah
Dr Ahmad Jachi
Dr Mohamad Nedal Alchaar
Mansoor Shakil
Professor Simon Archer
Samir Salameh
Stella Cox
Abdulkader Thomas
Michael Saleh Gassner
Brian Kettell
Imane Karich
Dr Mohammed Imran Usmani
Jean-Marc Riegel
Samer Hijazi
Ahmad Sabbagh
Paul Sherrin
Waheed Qaiser
Training and examination assessment expertise from ESA and SII Staff
Qualifications can……..
Benchmark standards
Provide the foundation for measurable continuous learning regimes
Combine knowledge, skills and behaviour
Be used for ‘Approved Persons’ regimes to ‘police the perimeter’ of
Financial Services
Become a global standard
Save many years of conventional standard setting in the field of
personal and professional competence
‘Licence practitioners’
Islamic Finance Qualification (IFQ)
Combines the expertise of Islamic scholars and banking practitioners,
Trainers and Business School leaders with the traditions of UK Professional
Body standard setting for ethical conduct in the investment sector
Is available globally using the latest assessment technology
Is supported by major banks and finance institutions
Is a practical qualification blending knowledge and application
The IFQ – what does it cover?
The basis of Islamic banking and finance
Islamic law of contracts
The major contracts – Mudaraba, Musharaka, Murabaha, Ijara, Salam,
Istisn’a, etc..
The accounting treatment of Islamic Finance Institutions: financial
transactions according to IFRS and AAOIFI financial accounting
standards
Corporate governance for Islamic Finance Institutions
Islamic asset and fund management
Islamic Bonds - Sukuk
Islamic insurance - Takaful
IFQ – Highlighting new
standard setters (1)
Regulatory and prudential Standards:
The Islamic Financial Services Board (IFSB):
 Corporate governance,
 Risk Management,
 Capital adequacy etc..
IFQ – Highlighting new
standard setters (2)
Accounting & Sharia’a standards:
Accounting and Auditing Organization for Islamic Financial
Institutions (AAOIFI)
 Need for new accounting standards which include new dimensions
such as:
• Religious & Ethical dimensions as a matter of religion
• New Accounting classes such as the Investment Account
Holders. The latter are (to a certain extend) similar to depositors
in conventional banking
 Sharia’a supervisory Board Report which is not included in
Institutions financial reports and notes.
Potential accounting
challenges
Islamic Finance Institutions apply different accounting
standards according to local regulations:
 Different reporting policies,
 Potential extra work needed for consolidation of subsidiaries’
accounts,
 Potential transparency challenge for shareholders and investors
(mainly Islamic Account Holders),
 Big challenge for Islamic Finance Institutions who are looking to
expand globally.
 Challenge in case Islamic Finance institutions decide to go public,
Why potential resistance for
new standards?
Extra work required from Islamic Finance Institutions,
Requires new knowledge and expertise of both regulators and
practitioners:
 Need to develop the expertise of the Islamic Finance industry,
 Need to develop the knowledge and understanding of employees
Need for more global qualification: the
IFQ
Accounting &
Sharia’a
standards
(AAOIFI)
Standards
Harmonisation
Regulatory &
Prudential
standards
(IFSB)
Promoting
Global Growth
In Islamic
Finance
Product
Innovation
Meeting
Customer
Needs
An International
Benchmark
Qualification
IFQ