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WCOA 2006 Istanbul Islamic Finance. 16 th November 2006. Ruth Martin Managing Director. www.sii.org.uk. SII Involvement in Islamic Finance. Who we are Setting professional standards The IFQ Educational standards as benchmarks for industry Standards first or Qualifications first?.

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WCOA 2006 Istanbul

Islamic Finance

16th November 2006

Ruth Martin

Managing Director

www.sii.org.uk


Sii involvement in islamic finance
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
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
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
Who Takes our Qualifications?

  • Aviva

  • Barclays

  • Citigroup

  • Credit Suisse

  • Deutsche Bank

  • Goldman Sachs

  • HSBC

  • J PMorgan

  • Lloyds TSB

  • Merrill Lynch

  • Morgan Stanley

  • Nomura International

  • UBS


Alliances
Alliances

  • Alliances & Partnerships vital

  • Firms

  • Training Deliverers

  • Professional bodies

  • Exam delivery partners

  • Islamic experts


Securities investment institute
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


Skills

and

experience

Knowledge

and

understanding

Continuing personal

and professional

development

Setting Professional Standards

Competence


Why a uk professional body for the islamic finance qualification
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 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 specialistsand authors from many countries


What is unique about ifq
What is unique about IFQ Qualification?

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

IFQ

Islamic Expertise

Training and

Education expertise

+

=


IFQ Qualification?

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…….. Qualification?

  • 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) Qualification?

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? Qualification?

  • 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
IFQ – Highlighting new standard setters Qualification?(1)

  • Regulatory and prudential Standards:

  • The Islamic Financial Services Board (IFSB):

    • Corporate governance,

    • Risk Management,

    • Capital adequacy etc..


Ifq highlighting new standard setters 2
IFQ – Highlighting new standard setters Qualification?(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
Potential accounting challenges Qualification?

  • 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
Why potential resistance for new standards? Qualification?

  • 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 & Qualification?

Sharia’a

standards

(AAOIFI)

Standards

Harmonisation

Regulatory &

Prudential

standards

(IFSB)

Promoting

Global Growth

In Islamic

Finance

Product

Innovation

An International

Benchmark

Qualification

IFQ

Meeting

Customer

Needs


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