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This edition first published 2018
© 2018 Simon Archer and Rifaat Ahmed Abdel Karim
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Library of Congress Cataloging‐in‐Publication Data
Names: Archer, Simon, editor. | Abdel Karim, Rifaat Ahmed, editor.
Title: Islamic capital markets and products : managing capital and liquidity requirements under Basel III / [edited] by Simon Archer, Rifaat Ahmed Abdel Karim.
Description: Chichester, United Kingdom : John Wiley & Sons, 2017. | Series: Wiley finance | Includes bibliographical references and index. | Identifiers: LCCN 2017026729 (print) | LCCN 2017038796 (ebook) | ISBN 9781119218838 (pdf) | ISBN 9781119218814 (epub) | ISBN 9781119218807 (cloth)
Subjects: LCSH: Finance—Islamic countries. | Finance—Religious aspects—Islam. | Capital market—Islamic countries. | Financial institutions—Islamic countries. | Financial institutions—Religious aspects—Islam.
Classification: LCC HG3368.A6 (ebook) | LCC HG3368.A6 I854 2017 (print) | DDC 332/.0415091767—dc23
LC record available at https://lccn.loc.gov/2017026729
Cover Design: Wiley
Cover Image: © Anna Poguliaeva/Shutterstock
To our wives, Eveline and Iglal, and the children of the second author, Alameen, Tassneem, Asma and Al‐Sideeq.
Professor Simon Archer and Professor Datuk Rifaat Ahmed Abdel Karim are very well known in the field of Islamic finance, to which they have made great contributions over the years. In this new book, they lead a team of expert contributors who write on the subject of Islamic Capital Markets and Products, with a particular emphasis on that important aspect of it which concerns managing capital and liquidity requirements under Basel III. They are uniquely qualified to do this, Prof. Rifaat having been CEO of the International Islamic Liquidity Management Corporation (the IILM), which is headquartered in Malaysia, between 2012 and 2016, and Prof. Archer having consulted for the major bodies in Islamic finance over a range topics.
These are technical requirements under Basel III that benefit from clear expositions by a number of practising professionals, but the book valuably traverses a wider terrain. In particular, there are numerous case studies particularly on sukuk issues which bring together practical information on particular issues. Although the focus is on sukuk, there are contributions on Islamic equities, collective investment schemes, and collateralisation, the latter being an important prerequisite of liquidity. The focus is also on Malaysia, the authors pointing to the consistent support from the authorities as explaining why, for example, Malaysia continues to dominate the global sukuk market, though other important players are not neglected, there being a chapter on Bahrain and much material from elsewhere in the Islamic world.
Amidst the detail there are wider remarks, for example as to the roots of sukuk in the Middle Ages as papers denoting obligations arising from commercial transactions, and a contribution by a leading scholar which emphasises the role of the Shari'ah in Islamic finance as a live body of jurisprudence that can be understood in the light of contemporary circumstances.
The authors' primary concern in this work, however, is with liquidity, and the management of risk, recognising the challenges which Islamic finance faces in this respect, challenges which in one form or another are faced by all financial institutions. The value of the work lies in the solutions that are to be found in its pages. Prof. Rifaat and Prof. Archer are to be congratulated for bringing together a group of authors who share their commitment to the continuing growth of Islamic Capital Markets, in which they themselves are such leading participants. Everyone who works in this growing field will be glad to have this book on their shelves.
Sir William Blair
Judge in Charge of the Commercial Court
Royal Courts of Justice in London
September 2017
The authors would like to acknowledge the helpful support of Farrah Mohamed Aris and Noor Erni Surya Hj Noordin of the International Islamic Liquidity Management Corporation.
Professor Simon Archer is a Visiting Professor at the ICMA Centre, Henley Business School, University of Reading, UK. He qualified as a Chartered Accountant with Arthur Andersen in London and then moved to Price Waterhouse in Paris, where he became Partner in charge of Management Consultancy Services. Since the beginning of his academic career, Professor Archer has undertaken numerous consultancy assignments, including acting as consultant to the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the Islamic Financial Services Board (IFSB) and the International Islamic Liquidity Corporation (IILM). He is the author or co-author of a considerable number of academic papers on Islamic finance and a co-editor of and contributor to several books on the subject, including three published by Wiley. In 2010, he received an award from the Central Bank of Bahrain and Kuwait Finance House for his ‘outstanding contribution to the Islamic financial services industry’.
Professor Rifaat Ahmed Abdel Karim has an international reputation as a leader and authority in the Islamic financial services industry (IFSI) at both the professional and academic levels.
Professor Rifaat was the CEO of the International Islamic Liquidity Management Corporation during the period October 2012–December 2016. He has served as the inaugural Secretary-General at both the AAOIFI and the IFSB. Professor Rifaat is an Adjunct Research Professor at INCEIF, Malaysia, and Visiting Professor at the ICMA Centre, Henley Business School, University of Reading, UK. He is the author or co-author of a considerable number of academic papers on Islamic finance and a co-editor of and contributor to several books on the subject, including three published by Wiley.
Professor Rifaat's contribution to the IFSI has been recognised by the many prestigious international awards that he has received during his career over three decades, which has been dedicated to high achievement in professional activities, as well as in research and academic work. These awards notably include the (inaugural) 2004 Euromoney Outstanding Contribution in the Development of Islamic Finance, the 2010 Islamic Development Bank Prize in Islamic Banking and Finance and the Malaysian Royal Award in Islamic Finance 2016.
In 2010, the King of Malaysia awarded Professor Rifaat the Royal Malaysian Honorary Award of Darjah Kebesaran Panglima Jasa Negara (PJN), which carries the title ‘Datuk’.