Could you provide a brief journey of how you arrived where you are today?
After completing my degree in business studies, I returned to Jersey to train as a chartered accountant and qualified in 1983. I moved to Volaw in 1988 to manage their client accounting department but soon transferred to take charge of their corporate structuring and administration team, which included funds. Volaw has had a business relationship with the Dar Al-Maal Al-Islami group for over 25 years. In 1995 their Swiss subsidiary, Faisal Finance Switzerland (now Faisal Private Bank), approached us to assist with the establishment of a real estate fund. At that time I had very little knowledge about Shariah compliant investing and the principles of Islamic finance, but this first fund led to several other Shariah compliant funds and other structures such that I started reading extensively on the topic, and took every opportunity to increase my knowledge, particularly in meetings with other practitioners and scholars.
What does your role involve?
My primary role is to manage the administration of various Shariah compliant funds and other structures that we have established on behalf of various Islamic financial institutions. In particular, I am responsible for the development of structures to ensure compliance with both Shariah requirements and those derived from local legal and regulatory matters. Historically, Volaw’s core business is the administration of trusts and companies established by high net worth individuals. I oversee the GCC where a trust has been established for residents.
What is your greatest achievement to date?
The first Shariah real estate fund we established in 1996, was not only a first for Volaw, but a first in Jersey. The model was replicated in other jurisdictions. In 2004 we established the award-winning Caravan Sukuk, often quoted as being the first commercial securitization Sukuk, and one of my responsibilities was ensuring the Shariah compliance of the structure. I am regularly invited to speak at Islamic finance conferences and seminars, and from a personal perspective my greatest achievement to date was to be told by two delegates at a seminar on Islamic wealth management that they could not believe I wasn’t a Muslim because of my knowledge and understanding of the principles of Islamic finance; I felt humbled by this.
Which of your products/services deliver the best results?
We don’t have products as such; we establish and administer products on behalf of other institutions. The wide range of fund structures available under Jersey law, with varying levels of regulatory requirements to match the risk profile of different target investor groups, together with the robust international standing that the Island enjoys, means that the Jersey fund offering is second to none.
What are the strengths of your business?
Being a privately owned and relatively small business (we have about 70 staff) together with our direct access to legal services from our associated Jersey law practice, Voisin, we can be very flexible in the nature of the business we undertake. We do not believe in the concept of a single operating practice fitting the requirements for each customer. As we have been in business for almost 30 years and have been actively administering Shariah compliant structures for at least half that time, there are very few requirements that we have not come across and can’t offer a turnkey solution to a client’s requirements. However, where those requirements are new or innovative, we are happy to embrace these concepts and will ensure that a structure can be developed that complies with the principles of both Shariah and Jersey law.
What are the obstacles faced in running your business today?
Uncertainty over the EU directive on the alternative fund sector has caused several promoters to put their plans for new funds on hold, but recent developments seem to point to Jersey being allowed to compete with other EU jurisdictions. This is subject to meeting the requirements of a “system of equivalence” which has yet to be agreed.
Where do you see the Islamic finance industry in, say, the next five years or so?
It seems that Islamic finance is at a crossroad, having gained acceptance within international finance circles at both corporate and government levels. We need to capitalize on this acceptance and ensure that products are developed to meet the demands of investors.
Name one thing you would like to see change in the world of Islamic finance.
Having been working within the sector for almost 15 years, I find the lack of true innovation a great frustration. It seems to be impossible to develop any new products that are truly Shariah-based, while there is an underlying requirement for any such product to fit within the constraints of a traditional form of financial contract under Shariah.
For example, Sukuk should be the ideal means for a company to raise finance in a Shariah compliant manner, but unless the financing can be made to fit within one of the 14 forms of Sukuk defined by AAOIFI, the financing cannot be called Sukuk and has to be defined differently.