UK To Support Development Of Islamic Finance

by Philip Morton, Investors Offshore.com

31 January 2007

Economic Secretary to the UK Treasury, Ed Balls on Tuesday set out new measures to establish the UK as the financial partner of choice for emerging markets, and as a leading global centre for Islamic finance.

In his speech to the Euromoney Annual Islamic Finance summit, Mr Balls argued that Government has a role in helping industry overcome barriers to the development of Islamic Finance in the UK.

In order to support the development of Islamic financial products, the Government yesterday unveiled the following measures:

• Legislation in Finance Bill 2007 to facilitate the UK issuance and trading of Sukuk;
• Guidance on Diminishing Musharka and Takaful to be published alongside the Budget; and
• Islamic finance to become a key priority of the work of the Chancellor's High-Level Group.

The Government also welcomed industry developments, including:

• A Memorandum of Understanding signed on Tuesday between the International Capital Markets Association and the International Islamic Financial Market to set standards for Islamic Capital Markets; and
• The launch of the Islamic Finance Qualification in October, a joint initiative between the Securities and Investment Institute, and the Ecole Superieure des Affaires, one of the leading business schools in the Middle East, to develop qualifications in Islamic Finance.

Mr Balls announced of the new developments that:

"Today I am able to set out the next stage in our reforms to ensure the tax and regulatory system will encourage the development of Shari'a compliant products. I am pleased to be able to outline these reforms alongside the announcement of a Memorandum of Understanding to help set standards for Islamic capital markets."

"Today is an example of public and private sectors working together to fulfill our shared ambition of creating major international markets in Islamic finance with London as their centre."

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