Interview gif


John A. Sandwick, Islamic Wealth & Asset Management Independent Consultant


Irfan Shahid, Lecturer Economics, Finance & Islamic Banking


Raja Teh Maimunah, Global Head, Islamic Markets, Bursa Malaysia


What are the current trends in Is- lamic wealth management?


It is sort of hard to spot a trend in an industry that doesn’t exist, but yes, there are some trends. First, there are some groups of bank- ers who make a fine living off of managing Muslim wealth but who at the same time don’t care about Islamic wealth manage- ment. This is especially true here in Switzer- land, where not one major Swiss bank has anything at all in the Islamic wealth manage- ment space. I personally think most of the Swiss banking industry is missing one of the greatest new business opportunities in half a century or more, but maybe I’m wrong. What is clear is this haven of private wealth, this world capital of wealth management, is not providing leadership of any kind to develop and implement Islamic wealth management. The solid, real steps being taken to develop Islamic wealth management are more at the fringe, than the centre. Although, perhaps we shouldn’t call places like Dubai and Riya- dh the fringe, as they are near the centre of where the money comes from.


There are two major international banks now working in Dubai to develop true, world- standard Islamic wealth management plat- forms. One has been trying to set this up for years, but was sidelined by the global financial crisis and just now is attempting to restart the process. The other was relatively unaffected by the crisis, but has always been somewhat slow to market with new products. However, there is no doubting their serious- ness in achieving major goals in the Islamic wealth management industry. Besides these two global banks, we also see some local ini- tiatives, but not much. The most impressive is a large Saudi bank beginning to use its mainstream advertising and public presence to promote the concept of Islamic wealth management. Another good sign is that the local regulator, the Capital Market Author- ity, has been printing and distributing high- quality material to educate the public on wealth management. The abuses of the past might have been avoided or lessened had there been a wider, deeper and professional system of Islamic wealth management. Now that the worst of the crisis is over, perhaps some wise minds will decide to reorganise their businesses and concentrate now on customer demand, not just what makes the most money for the bank.


What’s needs to be done to improve knowledge on Islamic Finance prod- ucts within the finance and banking industry players?


There are few educational bodies like CISI, AAIOFI and IIBI engaged in providing certifi- cation in Islamic finance but I think it is not enough due to rapid expansion and growth in Islamic Banking and Finance. Still industry is lacking in human capital.


Islamic Banking Finance industry should es- tablish institute at global level for the edu- cation and training in Islamic banking and Finance with balance knowledge and skill in Islamic Studies, Arabic, Banking and Fi- nance like conventional education system where one should be admitted at youngest age after IGSCE (O level).


During the education students should work partially in conventional and Islamic finan- cial institute for the practical experience in banking and financial sectors.


However it will bring better understanding and knowledge about Islamic Banking. Certi- fication and documentation will not bring any improvement in the industry without proper training and education. I have came across to many people who proclaim Shariah Schol- ar and pillar of Islamic finance after study- ing tow and three books on Islamic Banking. Even they do not have fundamental knowl- edge of Islamic Shariah and they are mess- ing up industry. Islamic Banking and Finance is proper system not a joke which could be learnt within a few days.


I do not know why the people do not proclaim themselves Doctor and diagnose their health problems rather than consulting proper GB. Here they do not like to compromise with their health but want to play with people on the name of Islamic Finance. In nutshell In- dustry should establish proper education system like medicine and engineering to safeguard public trust in Islamic Banking.


Shari’ah Advisory Council (SAC) established in Malaysia


The establishment of a dedicated National Level SAC has been instrumental and con- tributed to the growth and development of Malaysian Islamic Finance in Islamic Capital Market, Banking and Takaful.


The Malaysian Sukuk Market is regulated by Securities Commission’s Shari’ah Advisory Council (SAC) which established on May 16, 1996, constituted under Securities Commis- sion Act 1993. The SAC was endorsed by the Finance Minister and was given a mandate to ascertain the implementation of ICM com- plied with Shari’ah principles. The estab- lishment was to strengthen the public con- fidence in the integrity of Malaysian Islamic Capital Market.


In introducing the ICM, SAC implemented two approaches; where the first was to re- vise the validity of conventional instruments used by local capital market from Shari’ah perspectives, which focused on structures, mechanisms, use of instruments to make certain the compliance to Islamic Law; while the second approach entailed developing a new financial instruments framework which are based on Shari’ah principles.


SAC is practicing the dual-financial system or two tiers regulatory system involving both general and Islamic guidelines in prospering the Islamic instruments.


SAC’s role in developing Malaysian ICM is crucial which covers the issuing of a list of Islamic Equities and is constantly updated twice a year. It is aimed at helping Muslim in- vestors to identify Shari’ah-compliant securi- ties and to augment their confidence when making investments.


2011 February Global Islamic Finance 33


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