Islamic finance in Europe (156)

Continuation

In addition, significantly more capital is required to start a fully-fledged IIFS (Institutions Offering Islamic Financial Services) than an Islamic window.

However, as the activities of an Islamic window expand, its parent company may consider opening up a new Islamic subsidiary which is then spun off.

A spin-off may benefit from being a separate legal entity in terms of its:

-      assets

-      and liabilities.

This could also unlock its potential to:

-      offer

-      and manage

a wide range of specialised Islamic products and services, of which:

-      Islamic wealth management

-      Shari’ah-compliant investments

-      underwriting of sukuk issuances

which would otherwise not be possible under a window operation.

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)