Moves to plug the gap in Islamic finance carry risks
Moves to plug the gap in Islamic finance carry risks
By Sophia Grene, Financial Times
The Islamic finance world is huge and growing hugely,” says Chris Oulton, chief executive of Prime Rate Capital.
As yet, this upbeat description does not apply to money market funds, largely because the traditional short-dated instruments used in such funds are outlawed due to Islam’s prohibition on interest.
But Prime Rate is endeavouring to help plug this gap by launching a Sharia-compliant money market fund, using Sharia commodity investments to mimic the characteristics of a Western money market fund.
The fact that Prime Rate’s product will be just the second Sharia liquidity fund available in Europe, after last month’s launch from the Bank of London and the Middle East, is testament to how slowly the Islamic asset management industry, as opposed to general Islamic finance, is developing.
Source: http://www.gulfnews.com/business/money/10338260.html