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Islamic finance

Islamic finance complies with Sharia (Islamic law) to provide financial transactions based on ethical principles. The rapid growth in importance of Islamic finance to the UK has led to changes in the tax system, a new focus on legislative changes to support the development of Islamic financial products and the UK becoming the first country outside the Islamic world to issue sovereign Sukuk.

Through our industry guide you can find out more about Islamic finance and the resources available from the ICAEW Library & Information Service. Use the guide to find key background information, market research, statistics, legislation, trade bodies and trade publications. Our enquiry team can also research other industry-specific information for you. Call us on +44 (0)20 7920 8620 or email library@icaew.com.

The Business & Industry Guides series is produced by the Library & Information Service exclusively for ICAEW members and ACA students.

Understanding Islamic finance

Islamic finance focuses on achieving fairness through the sharing of profit, loss and risk; for example, the charging of interest (riba) is prohibited.

Access our selection of materials, including eBooks, online articles and print publications, that can help you understand the basic principles of Islamic finance: 

Sukuk

Sukuk are financial certificates that provide an investor with proportionate beneficial ownership of an asset and returns based on this ownership. They are commonly referred to as Islamic bonds and have proven popular as an alternative source of funding. In 2014 the UK became the first country outside the Islamic world to issue sovereign Sukuk.

Use our resources to learn more about Sukuk bonds and the Sukuk market:

Takaful

Takaful is a system based on mutual assistance which was approved by the Islamic Fiqh Council in 1985 as a Shari'a compliant alternative to conventional insurance. Commercial insurance is considered unlawful because it involves prohibited elements including maisir (gambling), riba (interest) and gharar (uncertainty). 

Use our resources to learn more about Takaful and the Takaful market:

Useful links

Islamic Finance Sectoral Advisory Group
TheCityUK's Islamic Finance Group aims to provide thought leadership on Islamic finance through engaging with government and international decision makers. The Group also regularly publishes a Islamic finance research report (last published April 2019) which summarises global trends in Islamic finance with particular reference to how the market is developing in the UK.

Islamic Financial Services Industry Stability Report
Annual industry report by the Islamic Financial Services Board (IFSB). Provides updates on trends, growth and developments in the Islamic financial services industry. Requires free registration to access. 

Islamic Finance Outlook 2019
Annual S&P Global Ratings research report predicting trends that will shape the industry's growth in 2019. 

Online articles

The Library provides access to leading business, finance and management journals. These journals are available to logged-in ICAEW members, ACA students and other entitled users subject to suppliers' terms of use.

Articles are available to logged-in ICAEW members, ACA students and other entitled users.

Market research

Islamic finance

Global Islamic Finance Report
Annual report which includes an assessment of the size of the global Islamic financial services industry and the Islamic Finance Country Index, which ranks countries by the size of their Islamic financial assets. The Islamic Finance Country Index was first launched in 2011 and has quickly gained acceptance as a means to compare countries in this sector.

Islamic Finance News: IFN Annual Guide 2019
This annual IFN journal guide looks at overall markets for Islamic finance, with individual country market reports for several countries. Requires an IFN subscription to access.  

Sukuk - Islamic bonds

IIFM Annual Sukuk report 2019
An International Islamic Financial Market (IIFM) research report providing an overview of the global Sukuk market, with major 2018 issuances highlighted. 

Thomson Reuters Islamic Finance Development Report 2018
Annual report examining the top performing markets for Islamic finance services, including sukuk, with an infographic on the top global sukuk markets during 2017. It reports that Malaysia continued to dominate the global sukuk market in terms of sukuk outstanding and issuance during 2017. Requires free registration to download.

Takaful - Shari'a compliant insurance

Islamic Financial Services Industry Stability Report 2019
Annual industry report by the Islamic Financial Services Board (IFSB). Provides updates on trends, market growth and developments in the Islamic financial services industry, including Takaful. Requires free registration to access. 

Industry news

Need to find the latest news on this industry sector? We can carry out industry news searches using a range of trade titles and general business sources through our databases. To discuss your requirements, please contact the enquiry team on +44 (0)20 7920 8620 or at library@icaew.com.

Useful links

Zawya Islamic Finance: MENA edition
Islamic finance gateway from Zawya Thomson Reuters which includes latest news stories, featured research reports and economic indicators. A free Zawya Daily email newsletter alert is available.

Statistics

Islamic Financial Services Board (IFSB)

The IFSB issues global standards for the Islamic finance industry, as well as conducting research and coordinating new industry initiatives. It currently provides quarterly Islamic banking data for 22 countries: Afghanistan, Bahrain, Bangladesh, Brunei, Egypt, Kazakhstan, Indonesia, Iran, Jordan, Kuwait, Lebanon, Malaysia, Nigeria, Oman, Pakistan, Palestine, Qatar, Saudi Arabia, Sudan, Turkey, the United Arab Emirates and the United Kingdom. 

Prudential and Structural Islamic Financial Indicators (PSIFIs) available include: 

  • Capital adequacy
  • Asset quality
  • Earnings
  • Leverage
  • Liquidity
  • Sensitivity to risks
  • Value of Shariah-compliant financing by economic activity
  • Value of returns by major type of Shariah-compliant contract
  • Number of Islamic banks
  • Number of employees

Detailed financial statements are also available for seven countries: Afghanistan, Bangladesh, Malaysia, Pakistan, Palestine, Turkey and the United Arab Emirates. 

Legislation

UK

Chambers Banking & Finance 2019 UK practice guide
The Banking & Finance guide by specialist law publishers Chambers & Partners provides expert legal commentary on key issues for businesses. The Islamic Finance section has been contributed by law firm Winston & Strawn London LLP; it provides an overview of the UK regulatory and tax framework for Islamic finance.

Whiteman & Sherry on Income Tax
P.G.Whiteman (Sweet & Maxwell, 2011-)
A helpful summary of the current provisions in UK tax legislation can be found in chapter 18 of this regularly updated looseleaf, under the heading: Alternative finance arrangements (Sharia compliant finance). This item is in the ICAEW Library & Information Service collection - please contact us if you would like to request an extract via our document supply service. 

Other regions

Chambers Banking & Finance 2019 (2nd ed.) guide
The Islamic Finance section (section 9) of the Banking & Finance guide by specialist law publishers Chambers & Partners provides an overview of the regulatory and tax framework for Islamic finance in each jurisdiction. Countries covered include: Australia, Austria, Botswana, Croatia, Germany, Ireland, Japan, Nigeria, Norway, Philippines, Portugal, Senegal, Singapore, South Africa, Switzerland, UAE, UK and USA.

The Islamic Finance and Markets Review - Edition 4
Publication from The Law Reviews describing the practice of Islamic or shariah-compliant finance in 12 jurisdictions: Bahrain, the Cayman Islands, Egypt, Japan, Luxembourg, Malaysia, the Netherlands, Oman, the Philippines, the UAE, the UK, and the US. Published in October 2019.

Islamic Finance News: IFN Annual Guide 2018
This annual IFN journal guide looks at overall markets for Islamic finance, including individual market reports for 49 countries, some of which refer to tax incentives and the regulatory framework.

Accounting for Islamic finance

The accounting practices adopted by firms in the Islamic finance sector vary across the world, being largely dependent on the regulatory environment of each jurisdiction.

Access our selection of articles, surveys and reports on the application and development of accounting standards for Islamic finance:

Islamic banking

Access our collection of articles, books and online resources providing an overview of the UK and global Islamic banking sector and news of recent developments: 

Taxation of Islamic finance

The differing approaches to Islamic finance around the world has resulted in a lack of consistency between countries in the tax treatment of Islamic products.

Access our selection of articles, books and guides summarising the current position:

Industry bodies

The websites of government, regulatory and trade bodies in this sector are a useful source of industry overviews, contacts and statistics.

UK

Asia

Global

Middle East

Oceania

Trade journals and publications

Trade journals, B2B magazines and specialist consumer magazines are another useful source of news and statistics.

Directories

These online directories can be used to identify specialist Islamic finance firms, financial products and professionals. 

Studies and research

Our selection of academic articles on current research and developments in international Islamic accounting and finance. ICAEW members and ACA students can obtain these articles free-of-charge through our document supply service.

INCEIF Knowledge Repository (IKR)
The International Centre for Education in Islamic Finance (INCEIF) Knowledge Repository can be used to access journal articles, conference papers, research reports, dissertations and other scholarly/research output by INCEIF's faculty, staff and students.

Further reading

Articles and books in the Library collection

The ICAEW Library & Information Service holds a collection of articles and books that cover the taxation of Islamic finance in the UK – click on the links to see our catalogue record and holdings for each item. Please contact us if you would like to borrow a book or request a copy of an article.

Law of Sukuk: shari'a compliant securities
S.Morrison (Sweet and Maxwell, 2017, 515 pages)
An authoritative guide to Sukuk, the Islamic equivalent of bonds. The book offers clear guidance for legal and finance professionals on the sale, purchase, origination and issuance of sukuk, including standard form documents and financial services contracts. 

Understanding Islamic financial services: theory and practice
K.Ullah (Kogan Page, 2017, 212 pages)
This book explains the basic concepts, principles, contracts and financial products of Islamic finance, using case studies and examples to bring the text to life. 

Whiteman & Sherry on Income Tax
P.G.Whiteman (Sweet & Maxwell, 2011-)
A helpful summary of the current provisions in UK tax legislation can be found in chapter 18 of this looseleaf, under the heading: Alternative finance arrangements (Sharia compliant finance). 

To find out how you can borrow books from the Library please see our guide to book loans.

You can obtain copies of articles or extracts of books and reports by post, fax or email through our document supply service.

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