The Prince’s Trust National Awards 2019
DDCAP had the priviledge of attending the National Prince’s Trust and TK Maxx & Homesense Awards at the London Palladium on Wednesday, 13 March. The annual event celebrates those who have worked with the Prince’s Trust on training programmes, community projects and to establishing businesses.
Many of those who have joined the programme have been in care, struggled with mental health issues, have been in trouble with the law or have faced homelessness. These awards recognise young people who have overcome these odds and improved their chances in life by gaining new skills, while having a positive impact on their local community.
DDCAP would like to extend its congratulations to the achievements of these deserving winners.
Prince’s Trust Enterprise Challenge Regional Final
DDCAP were also delighted to attend the MOSAIC enterprise challenge semi-finals on Friday 22 March. The students who presented their ideas were committed, energetic and inspirational.
While Eden School, the school whose all-female team won last year’s overall challenge didn’t make it past this round, another all-female team from Mulberry School won and will be competing in the finals at Hogan Lovells in the Spring. This initiative is a good example of effective community engagement which has a high level of impact on both individuals and communities.
The IFN World Leaders Summit returned again this year with its one-day event designed to celebrate the latest developments and most significant achievements in the Islamic financial market space. DDCAP Group™ were proud to be partners of this year’s event with our Regional Director, Cassim Docrat, and Head of Sales, Kazi Hussain, in attendance.
The day consisted of many interesting and informative panels with sessions on regulatory frameworks in Islamic finance and Fintech; liquidity, fixed income and Sukuk in global capital markets; building successful Fintech ecosystems; and developments in the global Islamic asset management industry.
Keynote addresses at this year’s event were given by Abdulla Mohammed Al Awar, CEO, Dubai Islamic Economy Development Centre, and Dr Obaid Saif Hamad Al Zaabi, CEO, Securities and Commodities Authority.
Cassim Docrat, Regional Director DIFC, and Roslan Ahmad, Chief Representative Kuala Lumpur, were proud to receive the ‘Best Interbroker for Islamic Transactions 2018’ award on behalf of DDCAP Group™ at the recent IFN Awards Ceremonies in Dubai and Kuala Lumpur, respectively. The well attended events provided great networking platforms for a broad cross section of clients in both cities.
DDCAP Managing Director Stella Cox CBE said “We are delighted to win this award. Given it is an industry vote, we see it as validation of our services and solutions by our clients and peers. We are truly appreciative of everybody who voted for us.”
Sustainable Capitalism in South East Asia: Developments in Responsible Investing and Green Financing
On Friday 22 March, Capital Markets Malaysia hosted the “Sustainable Capitalism in South East Asia: Developments in Responsible Investing and Green Financing” forum at the Institute of Directors HQ in London. The forum focused on the symbiotic relationship between Islamic finance and sustainable finance and the unique position of Malaysia to bring the two together.
The opening address was delivered by the Deputy Chief Executive of Securities Commission Malaysia, Zainal Izlan Zainal Abidin, who set the tone of the morning by showcasing how the alignment of Islamic finance and sustainable and responsible investment and green finance (collectively referred to as “SRI” in Malaysia) was Malaysia’s value-add proposition. He highlighted an impressive list of recent SRI Islamic capital market transactions which directly supported UN Sustainable Development Goals (SDGs): the issuance of green sukuk (SDG 7 “Affordable and Clean Energy”); issuance of the world’s first waqf IPO for the upgrade of Larkin Sentral, the main transportation terminal in Johor Bahru (SDG 10 “reduced inequalities”); the IFFIm sukuk to support Gavi vaccine alliance (SDG 3 “Good Health and Well Being”); and the financing of Trust Schools in Malaysia through Sukuk Ihsan (SDG 4 “quality education”).
The second key note was given by PwC Partner for Sustainability and Climate Change, Jon Williams, who focused on how global trends in sustainable investment might influence the growth of Asian financial markets. Mr Williams suggested that despite certain barriers to entry in Asia (for example, the need for increased investor education), significant opportunity exists for the Asian financial markets, particularly Malaysia. An increased awareness and focus on SRI will require the industry to prepare for governments and regulators to take these factors into account but given the current sentiment in the marketplace, Mr Williams is confident that governments and regulators will likely choose to take action soon and demand corporate disclosure of environmental factors which will impact investments and investors. Encouragingly, when looking at EBITDA, Mr Williams has seen a strong correlation between a company’s climate leadership and profits owing to better operational performance and better cash flows.
The half day event concluded with two impactful panel sessions entitled “The Demand and Supply Conundrum in Sustainable Investment” and “ESG, SRI and Islamic Funds; Will Alignment Further Contribute to this thriving asset class” which included participants from Nomura, KWAP, HSBC, UN PRI, UNDP, Maybank Islamic and Capital Markets Malaysia. Speakers across the two panels agreed that whilst there is significant potential for the convergence of Islamic and SRI finance in Malaysia, a great deal of further work will be required for that full potential to be realised.
Following on from DDCAP’s participation in the 2017 working group established by TheCityUK and Borsa Istanbul to develop FinTech co-operation between the two countries, DDCAP Executive Director David Testa has recently acted as the UK chairman on a further working group focusing on the role that Fintech could play in developing Islamic Finance, and in particular the potential for further co-operation between the UK and Turkey in promoting this area. Dr Recep Bildik, Director of Borsa Istanbul, led the Turkish team whilst the working group was made up of expert practitioners from both countries, with members including academics, lawyers, FinTech entrepreneurs, blockchain entrepreneurs, Turkish Participation Banks and Islamic finance intermediaries.
The group met three times between September 2018 and March 2019, in both Istanbul and London, and focussed on three areas in which the two countries could share helpful expertise and work together to develop the sector, namely regulation, education and training, and finance and funding, in particular the ways in which Islamic FinTech could assist with financial inclusion. This is a particular concern in Turkey itself, where approximately 19% of the population opt out of the financial system for religious reasons whilst – overall – 43% of Turkish adults do not hold a bank account.
The group also considered how Islamic FinTech can help develop ESG investment, given the widely acknowledged and growing crossover of ethical and green investment with Sharia’a compliant investment, with common ground in particular on sustainable financing and responsible risk sharing.
The project resulted in a UK Turkey Fintech Working Group report published by TheCityUK (link: https://www.thecityuk.com/research/uk-turkey-islamic-fintech-working-group-case-studies-and-insights/) with papers reflecting the breadth of experience in the working group. These include discussions on the current state of FinTech regulation in the UK and Turkey; how FinTech is increasingly enabling Islamic investors to structure cross-border Sharia’a compliant transactions quickly and efficiently; the role of accelerators in supporting Sharia’a compliant FinTech; the role of crowdfunding in broadening access to finance; how new technologies are assisting investment in international Sharia’a compliant funds; and the role of stock exchanges and capital markets in supporting the growth of Islamic Finance and FinTech.
Published by RFI Foundation
Stella Cox, CBE, has been involved in Islamic finance for many years, and through it all, she has worked to bridge differences across the industry. In her primary role as Managing Director at DDCAP, Ms.Cox has led the firm’s approach to automating Sharia’a compliant transactions to meet the diverse expectations of the Islamic finance industry.
More recently, through DDCAP’s RFI membership and her personal role as an RFI Trustee, Ms. Cox actively promotes the business and ethical case for responsible finance. DDCAP’s approach originally emerged from stakeholders’ expectations around Shari’ah governance and other compliance and sanctions protocols. As its counterparties became more attuned to environmental and social impact concerns, DDCAP’s approach also evolved and these concerns influenced the commodity used and the protocols surrounding the transactions it facilitates.
For example, in relation to the commodities transactions facilitated through DDCAP’s platform, ETHOS AFPTM, some stakeholders will ask about how the commodities are sourced as well as the environmental and social impact of the mining practices of suppliers. Questions may also arise about the impact of the sourcing firm’s practices on social welfare in the labour force as well as the impact on conflict afflicted or vulnerable areas.
As a relatively small company, DDCAP has been able to incorporate environmental, social and governance concerns into its everyday activities, including those points arising from the input of Sharia’a scholars. DDCAP has its own Sharia’a Supervisory Board to oversee its business and it accommodates the rulings of its customers’ Sharia’a boards which gives DDCAP a deep perspective into how Islamic finance is incorporating ESG and other responsibility concerns into industry practices.
DDCAP encourages other institutions to become involved in responsible finance both through its membership in RFI Foundation and as a signatory to the UN Principles for Responsible Investment (PRI). Ms. Cox highlighted how DDCAP approaches the PRI principles, focusing on incorporating ESG considerations into its own commercial decisions, collaborating with other financial institutions to promote the adoption of these values more widely, and publicly disclosing its own progress in adopting these principles.
She noted one challenge DDCAP has found is with the more standardized reporting approach that PRI requires. When signatory institutions don’t fit the traditional asset manager or asset owner model, they may find the reporting process to be more complex as it doesn’t naturally lend itself to their business activities. For some emerging markets-focused institutions, and those from underrepresented sectors like Islamic finance, they may find it more difficult to report which may lead them to be less likely to engage with the organisation and the process.
As an RFI Foundation member, Ms. Cox explained that there is an opportunity to highlight these concerns and collaborate to promote the adoption of a more flexible approach to reporting and disclosure. An alternative approach recognising the heterogeneity of the responsible finance industry would naturally stem from an Islamic finance-originated organization like RFI which brings experience in bridging the divergences inherent in Islamic finance, driven by Shari’ah or business considerations, or a combination of the two.
The Islamic finance market continues to evolve to address substance and form requirements from Shari’ah but now also seeks to incorporate an additional focus on ‘impact’ as linked to the Maqasid al Sharia’a (higher objectives of Sharia’a). Ms. Cox disagrees with the prevailing view that Islamic finance is primarily an ‘exclusions-driven’ industry and she emphasised the need for Islamic finance to become more vocal in sharing its unique and positive approach to finance to foster changes to how the wider responsible finance market operates, engages and reports on its activities.
Listen to our full interview with Stella Cox in the latest episode of the Responsible Finance Podcast
A Shariah compliant interbroker and technology provider is expanding both its geographical presence and strategic focus as the company adapts to a changing financial landscape.
UK-headquartered DDGI has officially launched a Malaysian representative office in Kuala Lumpur which it will use to serve its growing Malaysian clientele and as a gateway into other ASEAN markets including Brunei, Indonesia and Singapore.
The representative office is DDGI’s parent DDCAP Group’s third, after London and Dubai.
Having served the Malaysian market for over two decades, it was high time the technology service provider established a physical presence in Kuala Lumpur, DDCAP Group Managing Director Stella Cox said. The group, which received an in-principle approval by the Malaysian Investment Development Authority last September for its Malaysian operations, has appointed seasoned Islamic finance practitioner Roslan Ahmad as chief representative.
The physical expansion into Malaysia coincides with the group’s renewed strategic focus: sustainable and impact finance.
“We started to look at how the world was evolving and like most firms, we’ve been engaged with corporate social responsibility for a long time. But like most firms as well, we’ve realized that sustainable and responsible actions and adopting most of the process for investments and financial transactions and policies are a different discipline from corporate social responsibility and so we’ve embarked upon a process of integrating those principles for ourselves,” Cox, who sits on the board of trustees of RFI Foundation (a think tank for responsible finance), explained to IFN Fintech. “Our aspiration is to connect our clients within the global Islamic financial markets responsibly and that means in terms of asset origination, we’ll be following a process to ensure that we have a sustainable and responsible approach toward the commodity we engage with and the other asset classes we are involved.”
As an observer member of the Responsible Finance Institute, DDCAP has also began embracing UN’s Sustainable Development Goals, in particular gender diversity, innovation and partnership.
“As we expand, the whole basis of impact and its integration with Shariah compliant practices has a very firm foundation here in Malaysia and also in Southeast Asia,” Cox shared.- Published by IFN Fintech
DDCAP’s Sharia’s Supervisory Board (SSB) convened in January 2019 in Riyadh, Kingdom of Saudi Arabia to conduct its annual review of DDCAP’s transactional processes and a Fatwa was duly issued.
The SBB also issued a Fatwa in support of the enhanced functionality of DDCAP’s 24/7 web-based platform, ETHOS AFP™.
Stella Cox CBE Appointed a Member of the Astana International Financial Centre (AIFC’s) Advisory Council for Islamic Finance (ACIF)
The Astana International Financial Centre (AIFC) has been established to provide an attractive platform and gateway to the Central Asian region for financial services sector firms.
One of the aims of the AIFC is to promote the growth and development of Islamic financial services in Kazakhstan and the wider region. With that in mind, the AIFC has worked closely with the Islamic Development Bank (IsDB) and Asian Development Bank (ADB) to create a favourable legal and regulatory environment, industry master plan, developing products and tools that will attract Islamic banking and non-banking financial services, as well as investment capital from Central Asia, Middle East and South East Asia.
To promote the AIFC as a regional hub for Islamic finance the Advisory Council for Islamic Finance (ACIF) has been established. DDCAP Group Managing Director, Stella Cox CBE, was honoured to receive an invitation from H.E. Dr. Kairat Kelimbetov, Governor of the AIFC and ISDB Governor for Kazakhstan, to join the ACIF. Her appointment became effective in January 2019.
DDCAP participated in an Islamic Finance Seminar hosted by Debashis Dey, Partner & Global Head of Islamic Finance at White & Case LLP, the City-based international law firm.
The first panel, comprising Harris Irfan from Gateway LLP, Hyder Jumabhoy, Corporate Partner, White & Case, and Julia Smithers Excell, Regulatory Partner, White & Case, discussed the latest developments in FinTech and its impact on the Islamic finance industry. The panel outlined the definition of FinTech within Islamic finance and its current position in comparison to FinTech in the conventional market. The consensus seems to be that FinTech in Islamic Finance remains some way behind the conventional market in both its application and its effectiveness. FinTech regulation in the industry similarly remains limited at this current time. Standardisation of regulation and entry into the market were also discussed.
The second panel discussed trends and developments in Islamic finance, drawing on experience of recent transactions across Bank Finance, Derivatives, Sukuk and Project Finance. This panel, moderated by Xuan Jin, Counsel, White & Case, comprised Debashis Dey, Claire Matheson Kirton, Sherief Rashed and Ingrid York – all Partners at White & Case – and Faris Al Amoudi, an Associate at the same firm. The panel also discussed case studies including the legislative and legal implications of the Dana Gas Sukuk and the application of AAOFI standards and their impact on Islamic finance.