ALFI On Islamic Funds Best Practices

ALFI has kindly sent a link and short synopsis for this week’s ALFI podcast.

Best practices for setting up Islamic funds aims to establish a standard in the industry, according to Germain Birgen, RBC Investor Services and Chairman of the ALFI Middle Eastern sub-committee

As a result of assets under management in this sector in Luxembourg reaching $5bn, and a number of major fund launches, ALFI’s working group on Islamic Funds decided to produce a collection of best practices for setting up and servicing Islamic funds.  According to Germain Birgen, RBC Investor Services and Chairman of the ALFI Middle Eastern sub-committee, this is not regulation, but an industry standard which has been created in order to achieve a consistency amongst service providers.

ALFI created its dedicated working group focusing on Islamic funds in 2008, as a result of the steady development of Islamic funds in Luxembourg since the first launch in the 1990s.  Mr Birgen explains that, in keeping with Luxembourg’s reputation as a pioneer in introducing international and European legislation into the Luxembourg legal framework, one of the first tasks was to analyse whether its legal framework catered for setting up and servicing Islamic funds in Luxembourg.  It found that all categories of funds and legal structures can comply with Sharia principles in order to set up Islamic funds.

Birgen sees the outlook for Islamic Funds as positive, with an increased focus on this sector globally.  He is confident that Luxembourg will continue to attract major fund managers to domicile their Sharia funds in Luxembourg and hopes to maintain, if not improve, Luxembourg’s position as one of the top five domiciles for Islamic Funds.     

Best Practices for setting up and servicing Islamic Funds is available here: http://www.alfi.lu/sites/alfi.lu/files/files/Publications_Statements/Brochures/ALFI-Islamic-funds.pdf