Mixed signals are coming out of the U.K. regarding the potential issue of the first sovereign sukuk from a G8 country. The last year has seen a number of moves to make the U.K.'s regulatory environment more conducive to Islamic finance as the country sees great potential in the industry. However, recent news about the sukuk issue suggest that the government believes there are further regulatory changes needed to make the idea a reality. Although the sukuk issue may be delayed, Shari'ah-compliant home finance is growing rapidly. Other areas of Islamic finance are also growing rapidly in the U.K., which is seen as a gateway into Europe for many Islamic banks.
The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the standards-setting body based in Bahrain released its much anticipated clarification of guidelines on sukuk (available as a PDF from AAOIFI). Sheikh Taqi Usmani, the chairman of the Shari'ah board at AAOIFI made headlines in November 2007 when he made comments that up to 85% of GCC-based ijara sukuk might not be Shari'ah-compliant because they contained repurchase agreements that set a fixed repurchase price for the assets on which the sukuk were based. The AAOIFI release as expected said that the use of repurchase agreements with fixed repurchase price were not permissible except when the fixed price is set for a lessee who is not an investment partner. Instead of using a fixed price repurchase agreement, the AAOIFI Shari'ah board allowed repurchase agreements where the price was determined by the fair market value of the underlying asset at the time of repurchase. This was largely expected and should not cause too much disruption because most of the ijara structure was upheld. The article on the AAOIFI release from Bloomberg contains reactions from Islamic financial industry participants.
DePaul University, a university in Chicago, Illinois has begun offering classes on Islamic finance making it one of few in the United States where classes are taught on the subject. The NY Times also highlights University Islamic Finance Corporation as one of the banking companies catering to minority needs in the U.S.
Kenya changed its regulations of the banking industry to allow Islamic finance and began granting license to retail and commercial Islamic banks in early 2007, the growth has not yet been realized as the banks are just beginning to open.
Lawyers with experience in Islamic finance are added to the list of professionals in short supply as the Islamic finance industry sees growth in demand outstrip the supply of capable professionals.
The Guardian profiles 'sharia technician', Humayon Dar, currently with BMB Islamic, a Shari'ah advisory firm owned by the BMB Group. There are few details about the BMB Group, although it is thought to be based in Brunei. Another Shari'ah-compliant consulting organization, Yasaar Ltd, based in the U.K., is focusing some of its attention on achieving standardization of Shari'ah standards across the different schools of fiqh.