The City’s top lobby group is urging the Government to make sure any laws introduced post-Brexit do not dent demand for Islamic finance as enquiries from banks to set up Shariah-compliant services soar.
TheCityUK, which represents Britain’s banks and financial institutions, has sent a 32-page report to the UK Government highlighting that assets of UK firms offering Islamic finance services surpassed $5bn (£3.8bn) in 2016, up 11pc in two years.
Eager to safeguard the sector’s growth at a time when London is fighting to retain its status as Europe’s financial hub, the group is calling on the Government to « make sure legislation is in place so that corporate Sukuk’s [Islamic bonds] can thrive, » said Wayne Evans, the group’s adviser in international strategy.
« We’re looking to keep lobbying, talking to HMG [Her Majesty’s Government], to make sure they are aware of the demand, » Mr Evans told The Telegraph. « Enquiries are certainly going up [but we] need to make sure new legislation being introduced [post-Brexit] doesn’t have an implication on Islamic finance. »
Britain was the first non-Muslim country to sell a bond that can be bought by Islamic investors, drawing over £2bn in bids when it issued the sovereign Sukuk in 2014. At the time, former chancellor George Osborne said promoting the industry, now worth over $2tr, could make Britain « the undisputed centre of the global financial system. »
While the UK’s status as a global financial hub is at risk due to Brexit – London’s lucrative euro-clearing market is under threat and the City is expected to lose as many as 40,000 sales, trading and investment banking jobs – Mr Evan’s said the move could encourage Islamic-compliant investment into the UK, provided new rules don’t end up limiting growth.
« If we see more trade with non-EU countries, and encourage more trade with them, then obviously having expertise and a Sharia-compliant string to your bow has got to be an advantage, » he said. « If the UK financial system is going to be more interested in Malaysia, say, then we have been in the past, then there will be more interest in Islamic finance. »
Stephen Barclay, the economic secretary to the treasury and a former Barclays anti-money laundering director, will be among a string of senior executives discussing the Islamic finance industry in London this week.
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