EFICA: UK Islamic Finance Council wins Islamic Finance Industry Development Award 2015
UK Islamic Finance Council has won the 2015 Islamic Finance Industry Development Award, beating Khazanah Nasional and the International Shari’ah Research Academy for Islamic Finance.
The Islamic Finance Industry Award is part of the Ethical Finance Innovation Challenge and Awards (EFICA) organized by Thomson Reuters and Abu Dhabi Islamic Bank.
The three finalists made their formal presentations of their initiatives at a dinner and award ceremony event in Dubai on October 4th where audience voting determined the winner.
This is the third consecutive EFICA.
Nobel Peace Prize winner Muhammad Yunus, former CEO of Grameen Bank, was the keynote speaker at this year’s EFICA.
ABOUT THIS YEAR’S AWARD
The Islamic Finance Industry Development Award is a single prize of $100,000. This year, the Award sought the best practice business model initiated by an institution or an individual that have successfully implemented initiatives that have made a significant impact on promoting Islamic finance to the global community.
ABOUT THE WINNER - ISLAMIC FINANCE COUNCIL UK
The IFC is a UK-based not-for-profit specialist advisory and development body established to promote and enhance the global Islamic and ethical finance industry. It was established in 2005.
UKIFC promotes shared values in ethical finance and Islamic finance. Its more notable activities include:
1. House of Lords interfaith roundtable - the first time the Archbishop of Canterbury, Justin Welby, addressed a forum on Islamic and ethical finance.
2. Global Ethical Finance Forum - an inaugural global forum that attracted over 200 industry professionals and senior industry stakeholders from Islamic and ethical finance.
3. The first-ever joint venture between Islamic finance and the Church, working to create an ethical finance solution to be based on the shared values between the faith traditions and open to every member of society regardless of faith or ethnicity.
4. The establishment of a government-backed steering group to facilitate the establishment of a pioneering Ethical Finance Hub, which will facilitate commercial investment, R&D and thought leadership for developing and testing ethics-based models of finance (banking, investment, etc.) and enhance international engagement.
ABOUT THE OTHER FINALISTS
KHAZANAH NASIONAL
Khazanah is Malaysia’s sovereign wealth fund. On 18 June 2015, Khazanah successfully issued Malaysia’s first SRI Sukuk, a 7-year 100 million ringgit sale with a periodic distribution rate of 4.30 percent per annum. The proceeds are to be used to fund a minimum of 20 Trust Schools.
The Sukuk structure incorporates repayment dependent on the eligible SRI project’s ability to meet identified Key Performance Indicators (KPIs).
It incorporates a “Pay for Success” structure measured using a set of predetermined KPIs assessed over a 5-year observation period. The sukukholders will forgo 6.22 percent of the nominal value at maturity if these KPIs are met. If these KPIs are not met, sukukholders will be entitled to the nominal value in full at maturity.
The sukuk also allows investors to convert/waive their investment in the sukuk into a contribution at any point during the tenure with corresponding entitlement to tax exemption.
Sukukholders are also entitled to receive tax vouchers from for an amount equal to the amount waived or reduction in the nominal value of their respective sukuk holdings.
(Read about the SRI Sukuk here, written by Khazanah’s Chief Financial Officer Mohd Izani Ghani.)
INTERNATIONAL SHARI’AH RESEARCH ACADEMY FOR ISLAMIC FINANCE (ISRA)
ISRA was established in 2008 by Bank Negara Malaysia, the country’s central bank, to promote applied research in Shariah and Islamic finance. ISRA’s aim is to disseminate and promote knowledge of Islamic finance to Islamic finance stakeholders and the public at large.
ISRA’s submission for this year’s Islamic Finance Industry Development Award includes four main initiatives.
1. Publications, which include textbooks and research papers: A textbook produced by ISRA, “Islamic Finance System – Principles and Operations” stands out as one of ISRA’s biggest contributions to the Islamic finance education. The book is currently used as a textbook in almost all institutions of higher learning in Malaysia that offer Islamic finance as a subject. The textbook has also been translated into Arabic by King Saud University and into Bahasa Indonesia.
2. Education programmes
3. Talent development programmes
4. Islamic Finance Knowledge Repository (I-FIKR) portal: The online platform holds materials produced by ISRA and partners. It is a repository of fatawa and bulletins
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