Government launches consultation on Islamic finance in the UK
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Released 11 December 2008
A joint Treasury–FSA consultation on proposals for the legislative framework
for the regulation of alternative finance investment bonds, which include sukuk,
was launched today by Ian Pearson MP, Economic Secretary to the Treasury.
Ian Pearson said today:
“This consultation is an important part of the work Government is doing to
support the growth of Islamic finance in the UK and to increase our position as
a leading global centre in this market.
“The Government wants to ensure no one in the UK is denied access to good
financial services on account of their religious beliefs. We value the
contribution Islamic finance makes to London’s position as an international
financial centre and we want to see this sector continue to grow and prosper in
As well as the consultation launched today the Government has also published
a new paper, ‘The development of Islamic finance in the UK’. This paper’s
purpose is to raise awareness of the growing role of Islamic finance in the UK
by providing a stock take of achievements to date, as well examining the
remaining barriers to growth.
- A copy of the Governments consultation:
Consultation on the
legislative framework for the regulation of alternative finance investment
- This consultation sets out the proposed legislative framework for the
regulatory treatment of ‘Alternative Finance Investment Bonds’. AFIBs refer to
a type of financial instrument commonly known as sukuk or Islamic bond, but
can also refer to any financial instrument with similar characteristics. This
consultation paper considers the regulatory policy options for these
- A copy of the Governments paper on Islamic finance:
development of Islamic finance in the UK: the Government's perspective
- 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.
- 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
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Article Published/Sorted/Amended on Scopulus 2008-12-13 13:47:25 in Business Articles