City Minister Kitty
Ussher chairs Islamic Finance Experts Group meeting on feasibility
study into Government sukuk
HM TREASURY News
Release (89/07) issued by The Government News Network on 16 August 2007
Kitty Ussher, City
Minister, today hosted the first meeting of the Islamic Finance
Experts Group. The Group was set up to act as an industry sounding
board for HM Treasury and the Financial Services Authority (FSA)
on Islamic Finance. The focus of today's meeting was the
Government's feasiblity study into issuing sovereign sukuk.
Speaking after the Islamic Finance meeting, Kitty Ussher, Economic
Secretary to the Treasury said:
"The UK is at the forefront of developments in Islamic
Finance and London continues to seize new opportunities - two of
the largest sukuk issued in the first half of this year were
listed in London. "The announcement of the feasibility study
into the Government issuing sovereign sukuk has generated a huge
amount of interest and enthusiasm. Today, we discussed issuance
options and parameters, and potential benefits for the City and
retail investors. It was a very informative meeting and we shall
continue to listen to a wide range of views before making a
decision on whether to issue the first sterling sovereign sukuk."
The Group had a detailed discussion on the feasibility study into
the potential issue of sovereign sukuk. The discussion centred on
the potential benefits for the City and retail customers of the
Government issuing sovereign sukuk. They were informed that the
study would take into account the Government's debt
management policy, size and nature of potential demand, potential
cost and risk characteristics, implications for the
Government's financing strategy, experiences of other sukuk
issuers; and impact on the markets.
The feasibility study was announced on 23 April and will report
on progress at the time of the Pre-Budget Report 2007.
The Group also discussed recent market developments and how the
business and Islamic community could continue to work togther in
partnership to drive Islamic Finance forward in the UK.
The Government's aims for Islamic Finance are:
* to entrench London's position as a global gateway for
Islamic Finance as part of the city competitiveness agenda being
pursued by the Chancellor's High Level Group; and
* to create a level playing field for alternative finance and
investments, such as Islamic Finance, in the retail market. HM
Treasury, the FSA and HM Revenue & Customs (HMRC) will
together take forward this agenda and continue their strong and
beneficial dialogue with the industry.
NOTES FOR EDITORS
1. On 16 April 2007 Ed Balls, the then Economic Secretary to the
Treasury, hosted a High-Level Summit on Islamic Finance.
Following the success of the meeting, he announced the
establishment of a new consultative forum, the 'Islamic
Finance Experts Group' to act as an industry sounding board
for the Government and the FSA on Islamic Finance issues going forward.
2. On 23 April 2007, Ed Balls announced that the Debt Management
Office and HM Treasury would carry out a feasibility study into
opportunities for the Government issuing Islamic financial
instruments in the wholesale sterling markets, in consulation with
the Islamic Finance Experts Group and reporting at the time of the
Pre-Budget Report.
3. Sukuk is an asset-backed, Shariah-compliant trust certificate.
The closest instrument comparable in the conventional financial
system would be a bond issued in relation to a securitisation.
4. Innovation in financial services is what keeps London and the
UK at the forefront of the global financial industry, and this
same drive has seen the City take a proactive role in the growth
of alternative financial services and tailored products. One of
the largest sukuk to date issued by Dubai Ports was written out of
the London office of Barclays Capital in January. In March, the UK
had the first billion dollar sukuk to be listed on the London
Stock Exchange raising £2.5 billion.
5. Increased availability of Islamic Finance products is vital to
ensuring the Muslim community in Britain has equal access to
business opportunities. Banks such as Lloyds TSB, Royal Bank of
Scotland, and HSBC are all offering Shariah compliant products,
and London is also the home to a fully Shariah compliant retail
bank. Since 2003, the Islamic mortgage market has grown to over
half a billion pounds - and has witnessed an increase of about 50
per cent in the last year alone.
6. The Chancellor announced in Budget 2006 a commitment to work
with the financial sector to establish the High-Level Group on
City Competitiveness, with senior representatives from across the
financial sector, to develop and support a new strategy to promote
London as the leading international financial centre.
7. At the first High-Level Group meeting, the Government
announced its intention to continue to work with the FSA and HMRC
to modernise the regulatory and tax framework to ensure that it
keeps pace with opportunities in markets of traditional UK
strength, such as asset management, along with new and innovative
areas such as hedge funds and Islamic Finance. The Islamic Finance
Experts Group reports on progress to the High-Level Group.
8. Membership of the Islamic Finance Experts Group comprises:
Members
Usman Ahmed CEO, Global Islamic Banking, Citigroup
Khursid Ahmed Chairman, British Muslim Forum
Amjid Ali Head of HSBC Amanah
Mohammed Amin PricewaterhouseCoopers LLP
Mulham Alwani Managing Director, Head of Middle East
and Islamic Finance,Financial Markets,
Royal Bank of Scotland
Clive Briault Managing Director, Financial Services
Authority
Peter Burnett Executive Chairman, Middle East, UBS
Andrew Cahn Chief Executive, UK Trade & Investment
Stella Cox Institute of Islamic Banking and
Insurance
Gerry Deegan Managing Director, Islamic Bank of
Britain
Raquel Hughes Head of Product Management, London Stock
Exchange
Arul Kandasamy Head of Islamic Finance Solutions,
Barclays Capital
Afaq Khan Chief Executive, Islamic Finance,
Standard Chartered Bank
Iqbal Khan Muslim Council of Britain
Sadiq Khan Member of Parliament
Kevin Milne Managing Director, International Capital
Markets Association
Keith Leach Head of Alburaq, ABC International Bank
Miyan Mansur Mannan Vice-President, Credit Suisse
Shahid Malik Member of Parliament
Neil Miller Global Head of Islamic Finance, Norton
Rose
Yavar Moini Executive Director, Morgan Stanley
Michael Payne Director, Consumer Banking, Lloyds TSB
Walid Sarieddine Director, West LB
John Stuttard Lord Mayor, City of London
John Weguelin Managing Director, European Islamic
Investment Bank
9. Non-media enquiries should be addressed to the Treasury's
Correspondence and Enquiry Unit on 020 7270 4558, or by e-mail to public.enquiries@hm-treasury.gov.uk.
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