Earlier this month, the CEO of the DIFC Authority, Nasser Al Shaali called on financial centres worldwide to work together to promote innovation in Islamic Finance products.
As part of the CeMAP syllabus, delegates learn about Sharia-compliant mortgages and finance products, as it is an area they need to be aware of whether or not the newly qualified mortgage advisors are likely to be dealing with Islamic mortgages or not.
Al Shaali, on the first day of the London Sukuk Summit 2008, said there were weaknesses in the institutional and legal frameworks that are preventing product innovation in the area of Islamic finance.
Al Shaali said:
“There are still many countries where the legal and institutional framework is not explicit and transparent about Islamic finance, and the framework developed for conventional finance is being applied to Islamic institutions. It is unclear whether such an approach is sufficiently flexible to address and supervise the unique mix of risks and special operational features of Islamic finance. Significant weaknesses in the legal, governance and systemic liquidity infrastructure are impeding the spread of product innovations in Islamic finance and preventing effective supervision and risk management. There needs to be more done in terms of setting supervisory and regulatory standards tailored to Islamic banks. This is necessary to support industry development.”
Al Shaali requested greater standardisation in Islamic finance to assist in reducing both costs and the speed of issuing Sharia-compliant products. He added that the Dubai International Financial Exchange (DIFX) had launched several initiative to increase the growth of the Islamic Finance sector including industry benchmarks, for example, the Sukuk Index developed with HSBC.
The London Sukuk Summit, which is being held under the theme, ‘Gearing up for UK Sukuk Originations’, is supported by the UK Treasury, the Financial Services Authority (FSA), the City of London Corporation and the Islamic Financial Services Board (IFSB). It is also endorsed by UK Trade & Investment (UKTI), the trade promotion arm of the UK Department of Trade & Industry.
The CeMAP syllabus covers the two main Islamic mortgage products.