Islamic Finance

Sukuk

London Stock Exchange is a key global venue for the issuance of sukuk. To date over US$34 billion has been raised through 49 issues of these alternative finance investment bonds on London Stock Exchange. The Exchange offers the choice of two routes to market – the Main Market or the Professional Securities Market. The Main Market is the Exchange’s flagship international market for established companies and offers access to deep pools of capital and the benefit of a high profile launch to market. The Professional Securities Market, which is Exchange-regulated, offers the benefits of listing with more flexible regulatory requirements.  It allows the admission of debt securities and sukuk without the requirement for a full prospectus as only listing particulars are required and the disclosure requirements are tailored to wholesale needs as they can be governed by domestic GAAP rather than IFRS. In addition to the prestige of admitting securities to trading on a truly international and globally respected exchange, allowing companies to raise their profile with investors worldwide and access a deep pool of capital, London offers the benefit of competitive admission and listing costs as London is the only major listing venue which does not charge an annual fee to issuers.

Shariah-compliant Companies on AIM

AIM has listed the company shares of four Shariah-compliant institutions: Islamic Bank of Britain plc, European Islamic Investment Bank plc, The Family Shariah Fund Ltd. and Shariah Capital Inc.  The AIM market offers smaller growing companies all the benefits of being traded on a world-class public market within a regulatory environment that has been designed to meet their specific needs.  The flexible approach to regulation and the streamlined admission process have made it an attractive market for smaller institutions, including growing Islamic companies, to develop their business.

Exchange Traded Funds on Islamic Indices

London Stock Exchange also has a vibrant market in Exchange Traded Funds (ETFs) including seven Shariah-compliant ETFs based on Islamic indices.  ETFs are open-ended index tracking funds listed and traded on exchanges like shares.  They allow investors to gain exposure to a diverse range of assets and offer simple and efficient access to developed and emerging markets, broad and sector indices.  By trading a single share, users can effectively gain access to an entire index without the burden of investing in each of the constituent stocks making ETFs a highly efficient and cost effective investment tool.