The UK Islamic Finance Secretariat will incorporate Islamic finance experts currently operating within committees of government organizations such as the UKTI, the government's international business development organization, the Treasury and the Financial Services Authority (FSA), to strengthen the UK's position as an Islamic finance hub.
By the end of last year 25 sukuk, or Islamic bonds, which had raised a combined 9.1 billion pounds ($13.71 billion), were listed on the London Stock Exchange, the largest after Dubai Nasdaq.
Sukuk are certificates of ownership to an asset pledged by the issuer to raise capital. In its simplest form the issuer pays rent on the pledged assets generating returns for investors, giving sukuk a mixture of fixed-income and equity-like characteristics.
Sukuk are tradable but the market remains shallow as investors tend to keep them until maturity London, which is the most sophisticated Islamic market in Europe hosting a number of Islamic stand-alone banks, is aiming to attract further sukuk listings as Gulf countries are expected to issue more of the bonds to help raise up to $1 trillion over the next 10 years for infrastructure investments.
In spite of its early interest in the industry, the UK also faces competition from other European centers as well as the Far and Middle East.
The new body will include experts from banks, law firms, accountants representing the industry to UK authorities in legislative, fiscal, regulatory and political matters, said James Bagshawe, chief operating officer at UK stand-alone Islamic bank Gatehouse.
"We will act as a lobby if we agree on some issue but the primary aim is to get us all together to develop the Islamic financial services sector, a one stop shop for the industry," Bagshawe said.
"Part of our developing business agenda is encouraging the UK government to issue a sukuk," he said.
"We want more players so London can become more important and London can lead others in standardising products and also developing the industry globally," Bagshawe said.
The Secretariat will become operational on April 1 and will be financed by its members.
