INCEIF and UK’s ICMA Centre jointly offers MSc in Investment Banking and Islamic Finance.

28 May 2008

INCEIF and ICMA Centre have formalised the collaboration to jointly offer MSc in Investment Banking and Islamic Finance with a simple yet significant signing ceremony at ICMA Centre at University of Reading in UK. The degree aims to respond to the growing interest in Islamic Finance, and also the increase in Islamic Banking services, Islamic Investment and other financial services that are based on Islamic principles.

The partnership brings together two institutions with great reputations for education focused on the financial markets.

In a statement, ICMA Centre said the the MSc is the first in the UK to use Islamic material taught by Islamic specialists and aims to capture the increasing demand for the subject with an academic base and practical orientated views on issues such as Islamic Finance, Economics and Law. Students will benefit from having the opportunity to spend three months studying in Kuala Lumpur and study alongside Islamic Finance professionals. The MSc will not require any previous knowledge of Islamic Law or concepts but will explain the current issues within their overall Islamic economic and legal context.

Overall, graduates will benefit from a thorough understanding of Western banking practices that are allied to the principles of Islamic Finance. They will be well qualified to join specialist Islamic financial institutions, investment managers and finance divisions of multinational companies. In addition, participants of the course will also cover the materials necessary to qualify for INCEIF?s Chartered Islamic Finance Professional (CIFP). This professional qualification certification aims to give participants a better insight on worldviews and also cross-cultural perspectives for a robust Islamic Finance industry.

INCEIF President & CEO Mr Agil Natt, in his speech at the signing, said “We are indeed honoured to be chosen by the ICMA Centre at the University of Reading to develop its Masters Programme.”

The ICMA Centre has an international reputation for providing quality undergraduate, postgraduate and professional programmes tailored to the capital markets industry. The Centre is the result of Europe’s first active collaboration between industry and academia. Its success is based not only on the integration of applied finance theory and industry specific training but also its considerable professional and academic expertise, and strong links with companies and trade associations in the global finance industry. Established in 1991 with funding provided by the International Capital Market Association (ICMA) in Zurich, the Centre houses state-of-the-art facilities including two dealing rooms using software similar to those found in major investment banks.

In this joint effort, the first of the three parts of CIFP, the candidates will have the opportunity to spend three months in Kuala Lumpur, studying alongside with Islamic finance professionals. While they are in Kuala Lumpur, they will go through the learning process that includes case studies, problems solving, restructuring exercise, simulation and management games, product conversion exercise as well as Shariah and audit compliance testing.

INCEIF’s relationship with Reading started since last year when both parties jointly organised a continuous professional development programme in Kuala Lumpur that conferred participants the Certificate in Comparative Capital Market.

Mr Agil said Islamic finance is an area where Malaysia and the UK are pre-eminently well placed to work together as both countries have built up significant experience and industry practice.

“The British Government is also doing its bit to strengthen London?s position as a gateway for Islamic finance. The Chancellor, who is now the Prime Minister announced a series of measures aimed at facilitating and encouraging Islamic finance, including taxing Sukuk on the same basis as conventional securities. In April last year, the Economic Secretary announced that the Treasury and Debt Management Office would undertake a feasibility study into the opportunities for the UK Government to issue Sukuk. The legal fraternity is indeed well trained to handle the documentations in Islamic finance. This clear support from the British government, together with the City of London’s deep and liquid capital markets, expertise and innovation, will enhance Britain’s position as Europe’s leading centre for Islamic financial services,” he added.

The UK has also considerable strengths in training, qualifications and standards, in international financial services in general as well as Islamic finance in particular. Other institutions have also started offering courses in Islamic finance. The Securities and Investment Institute in London has developed an Islamic finance qualification that is being offered around the world. The Cass Business School in the City of London has developed an Islamic finance MBA.

Durham, Reading and Surrey Universities meanwhile have highly respected academics working in this area.

Professor John Board, Director of the ICMA Centre said: “We are delighted to launch this programme in partnership with INCEIF. We are already receiving a great amount of interest in this degree and our other new Masters degrees such as Financial Engineering and Corporate Finance.”

Source: INCEIF’s website (http://www.inceif.org)

INCEIF holds a Students Day

By Iqbal Jusoh

Kuala Lumpur (19 January 2008)

International Centre for Education in Islamic Finance (INCEIF) will hold a Students Day today comprising registration, briefing and dialog sessions for the students of its flagship programme, Chartered Islamic Finance Professional (CIFP) and of the newly-introduced PhD in Islamic Finance programme.

This is considered as an important event for everyone as more and more INCEIF’s CIFP students will now proceed with studying the Part 2 of the programme which mostly focusing on preparing the students with essential financial skills so as to enable them to serve as competent Islamic finance professionals to the industry.

There will be 5 core modules under the Part 2 of the CIFP programme which are:

1) Structuring Financing Requirements

2) Issuing and Managing Islamic Securities

3) Shariah Compliance and Audit

4) Customer Relationship Management

5) Issues in Islamic Financial Institutions and Markets.

Apart from the above modules, Part 2 CIFP students will be given the option to specialise in either the Banking Modules or the Takaful Modules.

Graduation of the first batch CIFP students are much-awaited as the global Islamic finance industry nowadays suffers a huge shortage of skilled professionals. In this regard, INCEIF’s great effort in nurturing human talents for Islamic finance industry should be highly complimented.

INCEIF devises 3 new Islamic instruments

By Sharon Tan 

KUALA LUMPUR (8 January 2008) 

The International Centre for Education In Islamic Finance (INCEIF), which was established by Bank Negara, has devised three new Islamic financial instruments and is also working on a new set of wakaf laws, which will enable Malaysia to stay ahead in the Islamic financial world.

According to Professor Dr Murat Cizakca, who is a member of INCEIF’s professional development panel and joint director of research, the sukuk and cash wakaf products are 100% syariah compliant, coupled with the dynamics of Western financial instruments.

I don’t know if it can actually be implemented. Bank Negara is studying them and they will have to decide if it can be used,” Cizakca said after delivering a lecture on the Maqasid Al-Shariat, Rule of Law, Democracy and Capitalism at INCEIF yesterday.

He said Malaysia needed to introduce a new wakaf law, which is 100% syariah compliant and efficient.

“Wakaf is a powerful instrument but the system here is in shambles. It is operating in a system that has been introduced by the British. The Western-inspired system is impeding the wakaf,” he said, adding that the issue was not confined only to Malaysia but also in Turkey.

He added that a new wakaf law was introduced in Turkey in 1967 which gave a boost to the system.

Malaysia, he said, was the forerunner in Islamic finance. “You are competing with the Gulf but because of the better democracy you have here, I have no doubt Malaysia will proceed faster and further,” he said adding that the country also had a healthier and more diversified economy.

Cizakca said although plentiful, existing Islamic financial instruments were not yet “perfect.” He cited the case of sukuk, which obeyed the letter but not the spirit of the law. “The transaction was designed to hide the interests,” he added.

The new proposed products were devised based on comparative financial history, Western financial practices and syariah law, said Cizakca who lectures economic history at the Bahcesehir University in Turkey.

“The challenge is to develop future new financial instruments that are both 100% syariah compliant and as efficient as anything you have in the West,” he said, adding that if such instruments could be developed, Western countries could also be expected to make use of them.

Cizakca said the venture capital instrument, which is based on the mudarabah contract, was widely used in the West especially in the Silicon Valley in the United States. He said the venture capital was an evolution of the mudarabah, based on profit sharing.

He said the West thought they were inventing something new but it was actually a modern version of mudarabah, which had been widely used in India and Europe of late.

Cizakca said if highly efficient Islamic financial instruments could be developed, such products may take precedence over Western ones. (Source: The Edge Daily)

A global demand for Islamic Finance Professionals

An excerpt from the speech of the Governor, Bank Negara Malaysia, 23 March 2006, Kuala Lumpur

The Islamic banking and financial services industry has experienced profound growth in this recent decade. This growth is expected to accelerate further global expansion in demand for Shariah-compliant financial products and services intensify. To sustain and support the future growth of the industry, an important prerequisite is the development of the talent and expertise that is needed to drive innovation and to raise the performance of the industry to greater heights.

The establishment of the International Centre for Education in Islamic Finance (INCEIF) represents an investment in human capital to support the global development of the Islamic financial services industry. Human intellectual capital plays a pivotal role in driving the performance and market competitiveness of the industry. Going forward, it will be the defining factor. The fast pace of innovation in global financial services in general and in the Islamic financial services sector in particular, will demand new expertise and skills. Indeed, there will be an increase in demand for adequately qualified professionals. In this environment, the creation of a substantial pool of talent and expertise is thus indispensable for the future growth of Islamic finance. Strengthening research and development capabilities is also important for enhancing the capacity for innovation to meet the diverse requirements of the rapidly changing global economy.

The establishment of the International Centre for Education in Islamic Finance thus comes from the recognition of this need to invest in human capital to advance the industry forward to greater heights. Bank Negara Malaysia has allocated an endowment fund of RM500 million for this purpose. The income from the endowment fund will be utilised to finance the operations of INCEIF. The objective of INCEIF is to produce high-calibre practitioners and professionals in Islamic finance as well as specialists and researchers in the disciplines of Islamic finance. INCEIF will leverage on the wealth of experience of the Islamic finance industry, both in Malaysia and abroad, to provide its graduates with value added insights and perspectives, in particular for their research programmes. Malaysia’s experience in Islamic finance for over more than two decades will also provide a training environment, including for internships for developing Islamic finance professionals.

The required skill set in Islamic finance is unique. It needs to have the right blend of knowledge of finance with the understanding of the Shariah as being central. The Shariah principles must be embedded in every operational aspect of the Islamic financial institution, including in the design of financial products and financing structures, financial contracts and their execution, liquidity and balance sheet management, risk management as well as asset and wealth management. The upholding of the Shariah principles must permeate from the highest level, including at the broad and senior management levels. Sound policies and practices premised on Shariah principles will evolve the Islamic financial system into a financial system that is distinctively ethical and that which promotes economic justice.