ESSENTIAL ELEMENTS FOR EFFECTIVE REGULATORY AND SUPERVISORY FRAMEWORK FOR IFI MALAYSIAN EXPERIENCE & APPROACHES
|
|
- Jocelyn Randall
- 8 years ago
- Views:
Transcription
1 ESSENTIAL ELEMENTS FOR EFFECTIVE REGULATORY AND SUPERVISORY FRAMEWORK FOR IFI MALAYSIAN EXPERIENCE & APPROACHES Mr. Hussein Soyan CEO, Soyan Financial Consultancy ltd. 5 th November 2015
2 PRESENTATION AGENDA Evolution of Islamic Finance The role of Central Banks for putting in place an effective regulatory and supervisory framework to further their understanding and appreciation on unique risks being emitted by the Islamic banking industry The Malaysia s experiences and approaches: an example of well established operating Islamic financial
3 Some facts there are 280 Islamic financial institutions globally with total assets of US$729 billion (IFSL Research, 2009: 2) Promising future for Islamic finance, and southern and eastern African countries will become pivotal service centres North African countries have great untapped potential (with high Muslim population of 190 million people or 91% Muslims) in retail services, financing of SME projects and real estate development projects South Africa is a market with great potential for Islamic banking transactions (Muslims represent 2.3% or 1.3 million of the population) Africa is host to the second largest Muslim population in the world, where 540 million or 52.4% of its population is Muslim The number of middle-class Africans has tripled over the last 30 years to contribute more than 34% of the population
4 The role of central banker for putting in place an effective regulatory and supervisory framework to further their understanding and appreciation on unique risks being emitted by the Islamic banking industry
5 Starting Point: How Different are Operation of Islamic banks? (in theory and practice) Islamic Banks Conventional Banks Source of Funds Use of Funds Investment from Investment Account Holders (IAH) Relationship: Investor Entrepreneur Equity investment and profit-sharing venture (Musharakah and Mudharabah) Relationship: Investor Entrepreneur Financing and Trading of assets Relationship: seller purchaser Deposits from customers Relationship: Creditor - Debtor Loan to Borrower Relationship: Creditor - Debtor Level of funding from IAH is the most significant differentiating factor The investors-entrepreneur relationship changes the way Islamic banks operate: Investors (IAH) bear fully the investment risk (while the bank is only exposed to negligence risk). IAH could therefore determine the investments/assets profile of the banks Islamic banks have greater fiduciary duty to protect IAH s investment
6 Islamic banking has become part of global development Cross border presence of Islamic Financial Conglomerates for e.g. Kuwait Finance House, First Community Bank Corporation, Gulf Africa Lariba American Finance House Increasing complex risk profile of Islamic banks e.g. greater profit-sharing investment risk, risk of trading of physical assets, fiduciary risk in managing customers investment and encroaching into new territories
7 Islamic Financial Institutions becoming more Innovative & dynamic due to several factors...
8 Rapid development of Islamic banking business also contributed to diversity in industry structure Various jurisdictions have their own Islamic banking model to meet local requirement Single Islamic Banking System Full transformation of economic system in accordance with Shariah led to existence of single banking system Dual Banking System Islamic banking system co-exists with conventional system Conventional Banks with Islamic windows Islamic products offered by conventional banks via windows Lack of support infrastructure (e.g. Islamic money market and capital market) may constraint product offering
9 In view of rapid evolution and dynamism of Islamic banking, how can we ensure effectiveness of our supervisory approach?
10 With presence of global Islamic bank, supervisory issues require cross border initiatives In principle, cross border supervisory issues similar to those faced in conventional banking. Specific challenges is in the detailed application of Islamic banking model e.g. how to address different Shariah interpretation Ingredients for effective cross border supervision H O S T 1.Understanding of supervisory philosophy and objective with regards to Islamic banking system within different jurisdiction 2.Common understanding among supervisors especially on specific risks emanating from Islamic banking operations 3.Clarity of responsibilities of home and host supervisory authorities - Harmonisation of Shari'ah view? UNITY IN DIVERSITY H O M E 4.Easy access to relevant information
11 Effective Cross-border Supervision : Ingredient 1 Understanding of Supervisory Philosophy and Objective within Different Jurisdictions
12 Effective Cross-border Supervision : Ingredient 2 Common Understanding of Specific Risks of Islamic Banks
13 Effective Cross-border Supervision : Ingredient 3 Clear Responsibility of Home-host Authorities
14 Effective Cross-border Supervision : Ingredient 4 Easy Access to Relevant Information
15 Rapid developments in Islamic banking also require supervisors to be aware of challenges at industry level
16 Crossing supervisory boundaries requiring greater collaboration between different supervisory authorities
17 The Malaysia s experiences and approaches: an example of well established operating Islamic financial
18 Malaysia has considered possibility of regulatory arbitrage that may arise from co-existence of Islamic windows alongside standalone Islamic banks
19 How does Malaysia address issue of capital arbitrage with respect to Islamic banking windows? Supervisory guidance to ensure level playing field between Islamic banks and Islamic windows: Capital requirement for Islamic windows streamlined with that for standalone Islamic banks: Windows is part of conventional banks and hence should adhere to Basel 2. However, to ensure level playing field between Islamic banks and Islamic windows, regulatory requirement for Islamic windows was crafted in line with CAS (as opposed to Basel 2). Examples: allowance for windows to recognise physical assets as Credit Risk Mitigants even under standardised approach (allowed by CAS but not by Basel 2) allowance for windows to adopt supervisory slotting method in calculation of capital charge for Musharakah and Mudharabah exposure even under standardised approach Separate deposit insurance and specified liquidation processes. Single customer limit of windows now based on Islamic Banking Capital Fund and not on bank s capital Provide level-playing field to both Islamic banks and Islamic windows Minimise risk to Islamic depositors from any loss from potential defaults of large exposures
20 If heavy reliance on market discipline is required, Islamic banking market must be prepared for such approach
21 Specificities of operation of Islamic Banking requires in-depth appreciation of business model and financial statements
22 Normally, Islamic banks would opt for IJARAH and/or Ijarah Muntahia Bittamleek (IMB) for the Auto Financing What are the unique risks which supervisors need to pay attention in these contracts? Customer submits Ijarah contractual application A customer enters into a Promise to Lease (PL) with an Islamic Financial Institution (IFI) requesting the IFI to purchase a specified kind of asset with a promise to lease. The PL may be binding or non binding depending on the applicable shariah interpretations IFI acquires assets from supplier MR If customer opts not to fulfil the non-binding PL, the IFI will be exposed to fluctuation in the value of the asset OR Compliance with Shariah principles in terms of operations. Ijarah Muntahia Bittamleek? Yes Contract Mature Sign direct sale contract No Contract Mature OR The lessor is responsible for defects throughout the Ijarah period in the event that takaful/ insurance is not sufficient Asset return to lessor MR Fluctuation in the carrying value of the asset will expose the IFI to asset price risk
23 Normally, Islamic banks would opt for IJARAH and/or Ijarah Muntahia Bittamleek (IMB) for the Auto Financing What are the unique risks which supervisors need to pay attention in these contracts? Agent identify specific asset 2 from a supplier. CUSTOMER 1 SUPPLIER Cash Payment IFI executes a Promise to Purchase (PP) with customer and appoints customer as an agent to acquire the asset. 5 Customer will settle the sale price on deferred payment over a specific tenor. ASSET 4 IFI sell the asset to Customer through Murabahah contract. (Transfer of title to Customer) OR 3 IFI will purchase the asset from supplier. (Transfer of ownership to IFI) MR IFI IFI may need to sell the goods in the open market if customer cancel the nonbinding PP Shariah Compliance Risk: Sequent of transaction is important i.e.. the IFI should not sell the asset to the customer until it takes possession of the asset
24 ISTISNA A is the preferred choice of contract in project-based financing What are the unique risks which supervisor need to pay attention in this contract? Late Delivery of completed goods by Parallel Istisna a seller GOODS OR 4 9 ISTISNA'A CUSTOMER (Buyer) 1 6 IFI RAW MATERIAL FOR MANUFACTURING 3 MR Price Risk relating to input materials ORDERED GOODS 10 RAW MATERIAL FOR MANUFACTURING PARALLEL ISTISNA'A (Seller) OR PROCESS FLOW 1 Customer approaches IFI to manufacture or build something 2 IFI can ask customer to furnish an urbun (security deposit) 3 IFI has the option to manufacture or build the asset on its own (no. 6) 4 Delivery of an ordered goods 5 Flexibility in term of time of payment and mode e.g.. lump sum/installment. 6 Enter into Parallel Istisna'a to procure an asset from a party other than the original Istisna a customer 7 It is possible that the IFI to give guarantee to the Parallel Istisna'a seller. 8 Parallel Istisna'a seller shall obtain own materials 9 Delivery of an ordered goods 10 Flexibility in term of time of payment and mode e.g.. lump sum/installment. 8 Legal Risk: Claims on the Parallel Istisna a seller for non-completion of works (litigation cost, legal claims etc.)
25 What is Equity Investment Risk? broadly defined as the risk arising from entering into a partnership for the purpose of undertaking or participating in a particular financing or general business activity as described in the contract; in which the provider of finance, shares the business risk e.g. private equity, venture capital Why Equity Investment Risk exist? Partnership (Shirkah) Contract of Sale (Bai ) Equity-based ISLAMIC CONTRACTS Others Leasing (Ijarah) Due to equity based financing under Islamic contract : Musharakah Mudharabah
26 Income smoothing mechanism risk mitigant to minimise displaced commercial risk Profit Equalisation Reserves (PER) and Investment Risk Reserve (IRR) are utilised to ensure rate stability avoid volatility on return to IAH which can lead to lack of competitiveness during the economic downturn However, Malaysia choose PER over IRR approach to minimise moral hazard as PER require the bank to contribute to the reserves as oppose to IRR which contain only investors contribution. A portion of distributable profit is kept-aside during good times and will be released during bad times PER Provision made at gross level i.e. both bank s and investors portion is deducted Used to cover shortfall in profit IRR Provision made at net level i.e. only investors portion is deducted Used to cover shortfall in profit and principal
27 Assessing quality of risk management for Islamic banks
28 Assessing quality of risk management for Islamic banks Malaysian approach
29 Assessing quality of risk management for Islamic banks
30 Supervisory function: Ensure adequate capital for Islamic banks
31 Examples of capital charge on a murabahah contract for financing a residential real estate
32 In essence, to ensure Islamic banking supervision is effective, following elements should be considered
33 At end of the day, supervisors must be mindful of supervisory challenges lying ahead Re-visiting the issues How ready are Islamic banking supervisors to implement effective cross- border supervisory collaboration? Is responsibility of home-host supervisors clearly identified? Is there any formal platform for discussion? How much information is supervisors prepared to share? Are supervisors prepared to face challenge from dynamic of Islamic banking system? More collaboration is required across different authorities Do we have necessary skill-sets and capabilities to deal with uniqueness of Islamic banks? Are we comfortable enough to let market discipline drive system, bearing in mind different level of understanding among industry players, customers and other related parties e.g. rating agency
34 Q & A
Risk Management of Institutions offering Islamic. Market) April 27-30, 2014 Kuwait city, Kuwait
Risk Management of Institutions offering Islamic Financial Services (excluding Takaful and Capital Market) Regulation and Supervision of Islamic Banks April 27-30, 2014 Kuwait city, Kuwait Abdullah Haron
More informationDraft Risk Management Guidelines for Islamic Banking Institutions. State Bank of Pakistan Islamic Banking Department www.sbp.org.
Draft Risk Management Guidelines for Islamic Banking Institutions State Bank of Pakistan Islamic Banking Department www.sbp.org.pk The Team Name Designation Contact Pervez Said Mahmood Shafqat Zahid ur
More informationHBL-ISLAMIC BANKING (HBL-IB) BUSINESS PRODUCTS
HBL-ISLAMIC BANKING (HBL-IB) BUSINESS PRODUCTS 1. HBL Murabaha Definition Murabaha is a sale where the seller (Bank) expressly mentions the cost of the goods it has incurred and sells it to another person
More informationKey Points. Ref.:EBF_007865E. Brussels, 09 May 2014
Ref.:EBF_007865E Brussels, 09 May 2014 Launched in 1960, the European Banking Federation is the voice of the European banking sector from the European Union and European Free Trade Association countries.
More informationApproach to Regulating and Supervising Financial Groups
and Supervising Financial Issued on 21 May 2014 Page 2/26 PART A Overview... 3 1. Introduction... 3 2. Broad approach... 4 3. Scope of application... 7 PART B Prudential Framework for Financial... 16 4.
More informationTreasury Operations of Islamic Banks
CHAPTER 26 Treasury Operations of Islamic Banks Introduction The world s financial markets are now taking serious notice of the tremendous growth of Islamic banking in the international markets. This can
More informationCHAPTER 23 WORKING CAPITAL FINANCING
CHAPTER 23 WORKING CAPITAL FINANCING Uses of Musharakah instrument in working capital financing Where finances are required for the working capital of a running business, the instrument of Musharakah may
More informationINSTRUMENTS AND RISKS IN ISLAMIC FINANCIAL INSTITUTIONS
Malaysian Accounting Review, Special Issue Vol. 9 No. 2, 11-21, 2010 INSTRUMENTS AND RISKS IN ISLAMIC FINANCIAL INSTITUTIONS Rashidah Abdul Rahman Accounting Research Institute & Faculty of Accountancy
More informationAAOIFI World Bank 2011 Potential of using Islamic finance in international trade (products and instruments)
AAOIFI World Bank 2011 Potential of using Islamic finance in international trade (products and instruments) October 2011 By Ghazanfar Naqvi Head of Islamic Origination and Client Coverage Contents 1. International
More informationIssues in Managing Profit Equalization Reserves and Investment Risk Reserves in Islamic Banks
Issues in Managing Profit Equalization Reserves and Investment Risk Reserves in Islamic Banks V.Sundararajan 1 Abstract The use of investment risk reserve (IRR) is key to covering potential losses on assets
More informationGuidelines on Ibra (Rebate) for Sale-Based Financing
Guidelines on Ibra (Rebate) for Sale-Based Last updated: 31 January 2013 (first issuance on 1 November 2011) Takaful Department Table of Contents PART A OVERVIEW... 1 1. Background... 1 2. Purpose... 3
More informationSimple synthetic securitisation
pggm.nl Simple synthetic securitisation Why and how we invest in synthetic balance sheet securitisations Introduction On 30 September 2015 the European Commission (the EC ) presented its Action Plan on
More informationRisk Management in Islamic Financial Instruments
Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC ) Risk Management in Islamic Financial Instruments COMCEC Coordination Office September 2014
More informationSAMPLES OF ISLAMIC FINANCE CONTRACTS
SAMPLES OF ISLAMIC FINANCE CONTRACTS SAMPLES OF ISLAMIC FINANCE CONTRACTS Objectives: The purpose of providing sample contracts of Islamic Financing is to show how these contracts are formulated and how
More informationBasel III Pillar 3 CAPITAL ADEQUACY AND RISK DISCLOSURES AS AT 30 SEPTEMBER 2014
Basel III Pillar 3 CAPITAL ADEQUACY AND RISK DISCLOSURES AS AT 30 SEPTEMBER 2014 COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124 5 NOVEMBER 2014 1 Scope of Application The Commonwealth Bank of Australia
More informationSTANDARDS OF BEST PRACTICE ON COUNTRY AND TRANSFER RISK
STANDARDS OF SOUND BUSINESS PRACTICES COUNTRY AND TRANSFER RISK 2005 The. All rights reserved 1 STANDARDS OF BEST PRACTICE ON COUNTRY AND TRANSFER RISK A. PURPOSE/OBJECTIVE This document sets out the minimum
More informationSMEs Workshop: Leveraging on Islamic Financing Opportunities Working Capital: Practical Case Study for SME Financing
SMEs Workshop: Leveraging on Islamic Financing Opportunities Working Capital: Practical Case Study for SME Financing Presented By: JAMIL RAMLY PRESENTATION OUTLINE 1. Business cycle 2. Definition of SME
More informationMy Islamic Finance. Foreword. pwc CONTENTS. Guide to Islamic Finance. My Tax Companion Series. FOREWORD PART 1 Overview and background
My Companion Series Page 1 Islamic Foreword which forms part of the My Companion Series provides a general overview of Islamic in, i.e. the various Islamic and basic. We hope you will find useful and informative.
More informationIASB Oil & Gas wastewater Conposal of IFRS Con convergence - Trading Community
AOSSG Working Group on Islamic Finance AOSSG Survey Accounting for Islamic Financial Transactions and Entities DECEMBER 2011 AOSSG Survey: Accounting for Islamic Financial Transactions and Entities 2011
More informationProperty Finance - FAQ
Property Finance - FAQ 1. Who can apply for an Ajman Bank mortgage Finance? 1. UAE Nationals 2. UAE Residents - Expatriates 3. Non Residents 2. What is the product definition and Islamic structure followed
More informationIslamic Financial Instruments. Majid Pireh Islamic Finance Expert Securities & Exchange Organization(SEO) Tehran, Iran
Islamic Financial Instruments Majid Pireh Islamic Finance Expert Securities & Exchange Organization(SEO) Tehran, Iran Definition of Islamic Financial Instruments Islamic Financial Instruments are kinds
More informationPILLAR 3 DISCLOSURES 2009
PILLAR 3 DISCLOSURES 2009 Company Registration Number: C 16343 Contents Page Introduction............................................................... 3 Risk Management Objectives and Policies.................................
More informationDisclosure 17 OffV (Credit Risk Mitigation Techniques)
Disclosure 17 OffV (Credit Risk Mitigation Techniques) The Austrian Financial Market Authority (FMA) and the Oesterreichsiche Nationalbank (OeNB) have assessed UniCredit Bank Austria AG for the use of
More informationMUSHARAKAH AS AN ALTERNATIVE ISLAMIC FINANCING: AN EXPLORATORY STUDY FOR SMALL BUSINESS FINANCING IN BANK MUAMALAT MALAYSIA BERHAD
MUSHARAKAH AS AN ALTERNATIVE ISLAMIC FINANCING: AN EXPLORATORY STUDY FOR SMALL BUSINESS FINANCING IN BANK MUAMALAT MALAYSIA BERHAD BY MOHD FODLI BIN HAMZAH Project Paper Submitted in Partial Fulfillment
More informationIssued on: 28 January 2015. Financial Reporting for Islamic Banking Institutions
Financial Reporting for Islamic Takaful Department Banking Institutions Table of Contents PART A OVERVIEW... 1 1. Introduction... 1 2. Applicability... 2 3. Legal provisions... 2 4. Effective date and
More informationMediterranean Guarantees
A newsletter on risk mitigation instruments for infrastructure investment in the Mediterranean Issue 2, October 2013 The Investment Security in the Mediterranean (ISMED) Support Programme seeks to increase
More informationChallenges of Islamic Financial Market Development
Challenges of Islamic Financial Market Development By, Ijlal Alvi Contents Evolution of the Islamic Finance Industry & Islamic Capital Markets Current State of the Islamic Capital Markets Sukuk Issues
More informationStatement of Principles
Statement of Principles Bank Registration and Supervision Prudential Supervision Department Document Issued: 2 TABLE OF CONTENTS Subject Page A. INTRODUCTION... 3 B. PURPOSES OF BANK REGISTRATION AND SUPERVISION...
More informationBASEL III PILLAR 3 CAPITAL ADEQUACY AND RISKS DISCLOSURES AS AT 30 SEPTEMBER 2015
BASEL III PILLAR 3 CAPITAL ADEQUACY AND RISKS DISCLOSURES AS AT 30 SEPTEMBER 2015 COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124 5 NOVEMBER 2015 This page has been intentionally left blank Introduction
More informationEC consultation on FX Financial Instruments. ECO-INV-14-079 Date: 9 May 2014. Contact person: Ecofin department E-mail: mihai@insuranceeurope.
Response to consultation on FX Financial Instruments Position Paper Our reference: Referring to: ECO-INV-14-079 Date: 9 May 2014 EC consultation on FX Financial Instruments Contact person: Ecofin department
More informationCapital Adequacy: Internal Ratings-based Approach to Credit Risk
Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk Objective and key requirements of this Prudential Standard This Prudential Standard is directed at ensuring
More informationSUPERVISORY AND REGULATORY GUIDELINES: PU48-0809 GUIDELINES ON MINIMUM STANDARDS FOR THE OUTSOURCING OF MATERIAL FUNCTIONS
SUPERVISORY AND REGULATORY GUIDELINES: PU48-0809 ISSUED: 4 th May 2004 REVISED: 27 th August 2009 GUIDELINES ON MINIMUM STANDARDS FOR THE OUTSOURCING OF MATERIAL FUNCTIONS I. INTRODUCTION The Central Bank
More informationIslamic Finance Update. Eser ŞAGAR Capital Markets Board of Turkey
Islamic Finance Update Eser ŞAGAR Capital Markets Board of Turkey Developments in Islamic Finance - I Breakdown of Islamic Finance Assets Sukuk 7% Islamic Funds 6% 2003 Takaful 0% Islamic Funds 4% 2012
More informationMusharakah Mutanaqisah Home Financing
Musharakah Mutanaqisah Home Financing This case study was developed by the Asian Institute of Finance (AIF). AIF focuses on developing human capital across the financial services industry in Asia. Established
More informationBusiness Studies - Financial Planning and Management Study Notes. Financial Planning and Management Study Notes:
Business Studies - Financial Planning and Management Study Notes Financial Planning and Management Study Notes: The Role of Financial Planning: The strategic role of financial management: Organisational
More informationEBA discussion paper and call for evidence on SMEs and SME supporting factor (EBA in EBA/DP/2015/02)
POSITION PAPER Our reference: 2015/08/008 Your reference: EBA/DP/2015/02 1 (9) 30/09/2015 European Banking Association EBA discussion paper and call for evidence on SMEs and SME supporting factor (EBA
More informationVASSETI (UK) PLC CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013
CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013 INTERIM MANAGEMENT REPORT (UNAUDITED) FOR THE 6 MONTHS ENDED 30 JUNE 2013 1. Key Risks and uncertainties Risks and uncertainties
More informationfor Analysing Listed Private Equity Companies
8 Steps for Analysing Listed Private Equity Companies Important Notice This document is for information only and does not constitute a recommendation or solicitation to subscribe or purchase any products.
More informationIslamic Banking and the Housing Industry. Abdel Karim Halabi, Monash University Abdul Malik Mirza, Queensland University of Technology
Islamic Banking and the Housing Industry Abdel Karim Halabi, Monash University Abdul Malik Mirza, Queensland University of Technology Introduction Individuals and families today have many forms of finance
More informationKey learning points I
Key learning points I What do banks do? Banks provide three core banking services Deposit collection Payment arrangement Underwrite loans Banks may also offer financial services such as cash, asset, and
More informationISLAMIC BANKING IN MALAYSIA: CURRENT TREND AND WAY FORWARD. YBhg. Dato Sri Zukri Samat May 2013
ISLAMIC BANKING IN MALAYSIA: CURRENT TREND AND WAY FORWARD YBhg. Dato Sri Zukri Samat May 2013 1 2 ISLAMIC BANKING: A GLOBAL PHENOMENON 3 GLOBAL ISLAMIC BANKING LANDSCAPE UK Govt sets an objective to entrench
More informationAPPLIED SHARI`AH IN FINANCIAL TRANSACTIONS
APPLIED SHARI`AH IN FINANCIAL TRANSACTIONS Associate Professor Dr Engku Rabiah Adawiah Ahmad Ibrahim Kulliyyah of Laws International Islamic University Malaysia rabiah@iiu.edu.my eradawiah@yahoo.com INTRODUCTION
More informationRisk Explanation for Exchange-Traded Derivatives
Risk Explanation for Exchange-Traded Derivatives The below risk explanation is provided pursuant to Hong Kong regulatory requirements relating to trading in exchange-traded derivatives by those of our
More informationGUIDELINES ON CORPORATE GOVERNANCE FOR LABUAN BANKS
GUIDELINES ON CORPORATE GOVERNANCE FOR LABUAN BANKS 1.0 Introduction 1.1 Good corporate governance practice improves safety and soundness through effective risk management and creates the ability to execute
More informationI. Introduction. II. Financial Markets (Direct Finance) A. How the Financial Market Works. B. The Debt Market (Bond Market)
University of California, Merced EC 121-Money and Banking Chapter 2 Lecture otes Professor Jason Lee I. Introduction In economics, investment is defined as an increase in the capital stock. This is important
More informationStrength You Can Trust
Strength You Can Trust RBC Wealth Management It All Starts With You Our relationship managers are focused on serving your best interests, and we aim to develop highly effective and customised solutions
More informationPROFIT SHARING INVESTMENT ACCOUNTS-- MEASUREMENT AND CONTROL OF DISPLACED COMMERCIAL RISK (DCR) IN ISLAMIC FINANCE
PROFIT SHARING INVESTMENT ACCOUNTS-- MEASUREMENT AND CONTROL OF DISPLACED COMMERCIAL RISK (DCR) IN ISLAMIC FINANCE V. SUNDARARAJAN Abstract The paper highlights some of the key issues and gaps in the supervision
More informationGuidance Notes on Sell and Buy Back Agreement
Buy Back Agreement Issued on: 28 June 2013 1/14 PART A: OVERVIEW... 2 1. FOREWORD... 2 2. Purpose... 3 3. Coverage... 3 4. Definition... 4 5. Interpretation... 5 PART B: POLICY REQUIREMENTS... 7 6. Mechanics
More informationLiabilities Policyholder liabilities 717 814 Other liabilities 53 54
256 Prudential plc Annual Report 2014 Financial statements Notes to primary statements D: Other notes D1: Corporate transactions a Sale of PruHealth and PruProtect businesses On 10 November 2014, the Prudential
More informationSelling a Small Business. and Succession Planning FOR A SMALL BUSINESS
Selling a Small Business and Succession Planning FOR A SMALL BUSINESS Welcome 1. Agenda 2. Ground Rules 3. Introductions 2 Objectives Change ownership of a business through selling, closing, or handing
More informationROYAL MALAYSIAN CUSTOMS GOODS AND SERVICES TAX GUIDE
ROYAL MALAYSIAN CUSTOMS GOODS AND SERVICES TAX GUIDE ON HIRE PURCHASE AND CREDIT SALE TABLE OF CONTENTS INTRODUCTION... 1 Overview of Goods and Services Tax (GST)... 1 OVERVIEW GENERAL OPERATIONS OF HP
More informationList of provisions for consumer protection
List of provisions for consumer protection Type of provision Lending platforms Equity and/or Debt platforms Maximum amount of investment for 40.000 Euro 20.000 Euro consumers on the platform Maximum frequency
More informationPillar 3 Disclosures. (OCBC Group As at 31 December 2014)
1. INTRODUCTION The purpose of this document is to provide the information in accordance with Pillar 3 directives under Monetary Authority of Singapore ( MAS ) Notice 637 on Risk Based Capital Adequacy
More informationFinancial Architecture and Banking Systems
Financial Architecture and Banking Systems Financial and Private Sector Development Financial Systems Practice The World Bank Group Our Mission The Financial Architecture and Banking Systems Service Line
More informationFINANCING BOOKLET SERIES ON FINANCIAL LITERACY
FINANCING BOOKLET SERIES ON FINANCIAL LITERACY CONTENTS FINANCIAL CHECK LIST... 2 01 Definition of Financing... 4 02 Why Does Public Need Financing Services?... 6 03 When Does Public Need Financing Services?...
More informationSHOPPING FOR A MORTGAGE
SHOPPING FOR A MORTGAGE The Traditional Fixed-Rate Mortgage Key characteristics: Level payments, fixed interest rate, fixed term. This mortgage is the one which most of us know, and it is still the loan
More informationinsurance companies pension funds building societies
1. Depository institutions - BANKS commercial banks credit unions savings and loan associations 2. Contractual savings institutions insurance companies pension funds building societies 3. Investment intermediaries
More informationMALAYSIA, THE FUTURE GLOBAL PRIVATE BANKING HUB: OPPORTUNITIES AND CHALLENGES CONFERENCE ON PRIVATE BANKING
MALAYSIA, THE FUTURE GLOBAL PRIVATE BANKING HUB: OPPORTUNITIES AND CHALLENGES CONFERENCE ON PRIVATE BANKING 2 nd Annual Conference on Islamic Wealth Management BNP-Paribas INCEIF Centre for Islamic Wealth
More informationApplying Core Principles of Risk Management in Islamic Banks Operational Risk Analysis
Afro Eurasian Studies, Vol. 2, Issues 1&2, Spring & Fall 2013, 15-40 Applying Core Principles of Risk Management in Islamic Banks Operational Risk Analysis Hylmun Izhar* Zakaria Salah Ali Hassan** Abstract
More informationBasel Committee on Banking Supervision. Consultative Document. Basel III: The Net Stable Funding Ratio. Issued for comment by 11 April 2014
Basel Committee on Banking Supervision Consultative Document Basel III: The Net Stable Funding Ratio Issued for comment by 11 April 2014 January 2014 This publication is available on the BIS website (www.bis.org).
More informationUnderstanding investment concepts Version 5.0
Understanding investment concepts Version 5.0 This document provides some additional information about the investment concepts discussed in the SOA so that you can understand the benefits of the strategies
More informationUnderstanding a Firm s Different Financing Options. A Closer Look at Equity vs. Debt
Understanding a Firm s Different Financing Options A Closer Look at Equity vs. Debt Financing Options: A Closer Look at Equity vs. Debt Business owners who seek financing face a fundamental choice: should
More informationSukuk and its Growth across Major Islamic Financial Markets
Sukuk and its Growth across Major Islamic Financial Markets www.infosys.com/finacle Universal Banking Solution Systems Integration Consulting Business Process Outsourcing Sukuk and its growth across major
More informationThe following services are being offered and can be sub-categorised as follows:
INTRODUCTION Midlink Financial Services was established in 2002 by Anita Kotze with a view to providing services in the rapidly growing and changing financial and property markets. The business caters
More informationInvestment accounts under IfSa DEVELOPMENT OF THE FINANCIAL SECTOR
Investment accounts under IfSa DEVELOPMENT OF THE FINANCIAL SECTOR FINANCIAL STABILITY AND PAYMENT SYSTEMS REPORT 2014 72 2 Islamic finance, through its diverse spectrum of Shariah contracts, is well positioned
More informationRisk management in Islamic banks
MPRA Munich Personal RePEc Archive Risk management in Islamic banks Mohamed Helmy ESLSCA Business School 20. April 2012 Online at http://mpra.ub.uni-muenchen.de/38706/ MPRA Paper No. 38706, posted 10.
More informationTerms and Conditions for Hong Leong Current Account-i and Savings Account-i (Tawarruq CASA-i)
Last updated on 6 June 2016 Terms and Conditions for Hong Leong Current Account-i and Savings Account-i (Tawarruq CASA-i) These Terms and Conditions of Tawarruq CASA-i are to be read as a whole with the
More informationNATIONAL DEVELOPMENT BANK PLC. KEY FACT DOCUMENTS
NATIONAL DEVELOPMENT BANK PLC. KEY FACT DOCUMENTS Islamic Banking KEY FACT DOCUMENT - Murabahah Facilities Murabahah Ability to receive financing for Imports and Local purchase. Requires no previous account
More informationExcerpt from the ACGR on Enterprise Risk Management
Excerpt from the ACGR on Enterprise Risk Management F. RISK MANAGEMENT SYSTEM 1) Disclose the following: (a) Overall risk management philosophy of the company; Objectives and Policies The Group has significant
More informationBank of Queensland Limited
APRA 30 April 2012 The Basel II Capital Accord principles took effect in Australia on 1 January 2008. The framework for the application of Basel II in Australia is comprised of three pillars: Pillar 1:
More informationUniversity of Cologne Development Research Center Universität zu Köln Arbeitsstelle für Entwicklungsländerforschung
University of Cologne Development Research Center Universität zu Köln Arbeitsstelle für Entwicklungsländerforschung Principles and Products of Islamic Finance By Omar Imady & Hans Dieter Seibel 1 Principles
More information3/22/2010. Chapter 11. Eight Categories of Bank Regulation. Economic Analysis of. Regulation Lecture 1. Asymmetric Information and Bank Regulation
Chapter 11 Economic Analysis of Banking Regulation Lecture 1 Asymmetric Information and Bank Regulation Adverse Selection and Moral Hazard are the two concepts that underlie government regulation of the
More informationIJARA-BASED FINANCING
IJARA-BASED FINANCING Definition of Ijara (Leasing) The term Ijara (Leasing) in Arabic literally means to give something on rent. Ijara contract is an agreement wherein a lessor (mu ajjir) leases physical
More informationReal Estate Investment Funds Regulations
Real Estate Investment Funds Regulations Contents Part 1 : Preliminary Provisions Article 1 : Preliminary... 5 Article 2 : Definitions... 5 Part 2 : Authorization Article 3 : Authorization Requirements...
More informationANNUAL REPORT ON THE TREASURY MANAGEMENT SERVICE AND PRUDENTIAL INDICATORS 2008/09
THE EXECUTIVE AGENDA ITEM 5 28 July 2009 ANNUAL REPORT ON THE TREASURY MANAGEMENT SERVICE AND PRUDENTIAL INDICATORS 2008/09 Report of: Andrew Stokes, Executive Director & Chief Finance Officer Executive
More informationEvery day, the world of Islamic finance is evolving.
Knowledge-exchange among academics, policymakers and practitioners is essential to developing the Islamic finance sector. Knowledge helps deepen financial intermediation, expand financial inclusion and
More informationRISK MANAGEMENT IN NETTING SCHEMES FOR SETTLEMENT OF SECURITIES TRANSACTIONS
RISK MANAGEMENT IN NETTING SCHEMES FOR SETTLEMENT OF SECURITIES TRANSACTIONS A background paper for the 4th OECD/World Bank Bond Market Workshop 7-8 March 02 by Jan Woltjer 1 1 Introduction Settlement
More informationNew on the Horizon: Revenue recognition for real estate investment and development
FEBRUARY 2012 Real Estate New on the Horizon: Revenue recognition for real estate investment and development KPMG s Global Real Estate practice Through our global network of member firms, KPMG has regular
More informationWorkshop Agenda Certified Commodities Analyst OBJECTIVE KEY AREAS FOCUS WHO SHOULD ATTEND. About your trainer UNIQUE MARKETS SPOT COMPLEX
markets are one of the more diverse markets in the capital markets arena and feature in investment portfolios in an increasing manner although traditionally they are traded in physicals taking in the whole
More informationCredit Risk Insurance. We protect Africa s Trade & Investments
Credit Risk Insurance We protect Africa s Trade & Investments About ATI What is Credit Insurance? Benefits of Credit Insurance Export Credit Insurance Our Partners & Credit Rating ATI s Relationship with
More informationPRODUCT DISCLOSURE SHEET
Please read this Product Disclosure Sheet before you decide to apply for this product. HOME FINANCING 1. What is this product about? The purpose of a home financing is for: Home Purchase: for the purchase
More informationIssued on: 14 March 2014. Investment Account
Investment Account Takaful Department Table of Contents PART A OVERVIEW... 1 1. Introduction... 1 2. Applicability... 2 3. Legal provisions... 3 4. Effective date... 3 5. Transition arrangement... 3 6.
More informationTIAA-CREF Individual & Institutional Services, LLC (A wholly-owned subsidiary of Teachers Insurance and Annuity Association of America) Statement of
TIAA-CREF Individual & Institutional Services, LLC (A wholly-owned subsidiary of Teachers Insurance and Annuity Association of America) Statement of Financial Condition (Unaudited) Index Page(s) Financial
More informationRoyalties, The better way of both investing in and financing of companies and projects
Royalties, The better way of both investing in and financing of companies and projects Prepared for UCSD Jacobs School of Engineering s von Liebig Entrepreneurism Center Aligning the interests of those
More informationRoche Capital Market Ltd Financial Statements 2014
Roche Capital Market Ltd Financial Statements 2014 1 Roche Capital Market Ltd - Financial Statements 2014 Roche Capital Market Ltd, Financial Statements Roche Capital Market Ltd, statement of comprehensive
More informationPrinciples for An. Effective Risk Appetite Framework
Principles for An Effective Risk Appetite Framework 18 November 2013 Table of Contents Page I. Introduction... 1 II. Key definitions... 2 III. Principles... 3 1. Risk appetite framework... 3 1.1 An effective
More informationBASEL III PILLAR 3 DISCLOSURES. March 31, 2014
BASEL III PILLAR 3 DISCLOSURES Table of Contents 2 Table 1. Scope of application HomEquity Bank (the Bank) is a federally regulated Schedule I bank, incorporated and domiciled in Canada. The Bank s main
More informationThe Scottish Investment Trust PLC
The Scottish Investment Trust PLC INVESTOR DISCLOSURE DOCUMENT This document is issued by SIT Savings Limited (the Manager ) as alternative investment fund manager for The Scottish Investment Trust PLC
More informationMortgage Terms. Appraisal An estimate of the value of property, made by a qualified professional called an "appraiser".
Mortgage Terms Acceleration The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested
More informationTHE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES
THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES Minaxi Rani Assistant Professor (Extn.), Department of Commerce, Govt. College for women P.G. College, Hisar, Haryana, (India) ABSTRACT
More informationInternational Accounting Standard 39 Financial Instruments: Recognition and Measurement
EC staff consolidated version as of 18 February 2011 FOR INFORMATION PURPOSES ONLY International Accounting Standard 39 Financial Instruments: Recognition and Measurement Objective 1 The objective of this
More informationHow To Write A Bank
Basel Committee Newsletter No. 9 (September 2006) The IRB Use Test: Background and Implementation Basel II Framework paragraph 444 Internal ratings and default and loss estimates must play an essential
More informationSAMA GENERAL DEPARTMENT OF FINANCE COMPANIES CONTROL. Prudential Returns Handbook (Finance Companies)
SAMA GENERAL DEPARTMENT OF FINANCE COMPANIES CONTROL Prudential Returns Handbook (Finance Companies) 1. Introduction Submission schedule All licensed finance companies in Saudi Arabia are required to submit
More informationA Guide to Corporate Governance for QFC Authorised Firms
A Guide to Corporate Governance for QFC Authorised Firms January 2012 Disclaimer The goal of the Qatar Financial Centre Regulatory Authority ( Regulatory Authority ) in producing this document is to provide
More informationInvestments GUIDE TO FUND RISKS
Investments GUIDE TO FUND RISKS CONTENTS Making sense of risk 3 General risks 5 Fund specific risks 6 Useful definitions 9 2 MAKING SENSE OF RISK Understanding all the risks involved when selecting an
More informationClient Acknowledgement. Risk Warning Notice for CFDs
Please read this document fully. IMPORTANT NOTICE Client Acknowledgement Clients (including account applicants) of CMC Markets Singapore Pte. Ltd. ( CMC Markets ) should be aware of the risks involved
More informationAppraisal A written analysis prepared by a qualified appraiser and estimating the value of a property
REAL ESTATE BASICS Affordability Analysis An analysis of a buyer s ability to afford the purchase of a home, reviews income, liabilities, and available funds, and considers the type of mortgage a buyer
More information18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS
APPROVED by Resolution No. 11 of 27 October 2004 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS
More informationCORPORATE MEMBERS OF LIMITED LIABILITY PARTNERSHIPS
1. INTRODUCTION CORPORATE MEMBERS OF LIMITED LIABILITY PARTNERSHIPS 1.1 This note, prepared on behalf of the Company Law Committee of the City of London Law Society ( CLLS ), relates to BIS request for
More informationSri Lanka Accounting Standard-LKAS 7. Statement of Cash Flows
Sri Lanka Accounting Standard-LKAS 7 Statement of Cash Flows CONTENTS SRI LANKA ACCOUNTING STANDARD-LKAS 7 STATEMENT OF CASH FLOWS paragraphs OBJECTIVE SCOPE 1 3 BENEFITS OF CASH FLOW INFORMATION 4 5 DEFINITIONS
More information