London Stock Exchange welcomes first Shari'ah compliant Exchange Traded Funds
The first ever Shari’ah compliant Exchange Traded Funds (ETFs) have today been listed on the London Stock Exchange’s Main Market. The three funds launched by iShares enhance the range of Shari’ah compliant products available in London, underlining the City’s emerging role as an important centre for Islamic finance.
The three funds launched today are the iShares MSCI World Islamic, the iShares MSCI USA Islamic and the iShares MSCI Emerging Markets Islamic. The funds track indices which screen out companies whose business activities involve earning interest, alcohol, arms manufacturing, tobacco, pork-related products, gaming and certain other forms of entertainment prohibited under Islamic law. The funds’ compliance with Shari’ah requirements will be reviewed annually by a Shari’ah Panel.
Commenting on the launch, David Shrimpton Head of Product Management and Development at the London Stock Exchange, said:
“It is great news that iShares have decided to list their first Shari’ah compliant ETFs on the London Stock Exchange’s Main Market: the launch marks another important step in London’s development as a global centre for Islamic finance. For the first time both British Muslims and the growing number of investors from the Middle East accessing our markets can benefit from the low-cost, instant diversification offered by a range of ETFs while investing in a way that is consistent with Shari’ah principles.
“The range of Shari’ah compliant products listed on the London Stock Exchange’s Main Market continues to grow. In the past year and a half we have admitted 14 Islamic finance instruments, or sukuk to trading on our markets, which have raised in excess of £5 billion.”
Rory Tobin, CEO of iShares Europe, said:
“Today marks a milestone in our history as we reveal 3 new Shari’ah compliant iShares using the newly established Barclays Plc Shari’ah panel. We have responded to the demand from Islamic and non-Islamic investors who have been seeking the core benefits of ETFs aligned with Shari’ah principles.”
The London Stock Exchange is playing a key part in the drive by the UK Government and the City to enhance London's position as a global gateway for Islamic finance, and is part of HM Treasury’s Islamic Finance Experts Group, which is currently examining the feasibility of the UK Government becoming an issuer of wholesale sterling Islamic financial instruments.
The UK was the first European country to develop a tax system designed to remove obstacles to the development of Islamic finance and the first in Europe to authorise wholesale and retail Islamic banks.
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London Stock Exchange:
Catherine Mattison / Alastair Fairbrother +44 (0)20 7797 1395 / 1222
Notes to Editors
About the London Stock Exchange:
The London Stock Exchange is the world’s premier international equity exchange and a leading provider of services that facilitate the raising of capital and the trading of shares.
The London Stock Exchange is the most international equities exchange in the world and Europe's largest pool of liquidity. By the end of 2006, the market capitalisation of UK and international companies on the London Stock Exchange’s markets amounted to £4.4 trillion, with £6.7 trillion of equity business transacted over the year.
The London Stock Exchange is a Recognised Investment Exchange (RIE) under the Financial Services and Markets Act 2000 and is supervised by the Financial Services Authority.
iShares is the Exchange Traded Fund (ETF) arm of Barclays Global Investors (BGI),
Barclays Global Investors is one of the world's largest asset managers and a leading global provider of investment management products and services. It had over 2,900 institutional clients and over $2.0 trillion of assets under management as of June 30, 2007. It transformed the investment industry by creating the first index strategy in 1971 and the first quantitative active strategy in 1979. BGI is the global product leader in Exchange Traded Funds (iShares) with over 290 funds for institutions and individuals trading in 19 markets. Globally, it had $359 billion of iShares assets under management as of June 30, 2007.
For further information about Barclays Global Investors, please visit our website www.barclaysglobal.com
ETFs are index tracking funds listed on the London Stock Exchange’s Main Market which provide diversification of unit but can be traded in the same way as shares. Eligible for inclusion in ISAs, attracting no stamp duty and with minimal management fees, they offer a cost-effective and simple way to track global indices.