Islamic finance body okays France's sukuk model
A top Islamic finance body has approved France's model to issue local sukuk, or Islamic bonds, which would ease their listing on the Paris financial market, a French official revealed on Wednesday.
The Accounting and Auditing Organisation for Islamic Financial Institutions has approved the model aimed to marry France's tax laws with the Islamic financial instrument, said Thierry Dissaux, the chief executive officer of the French Deposit Guarantee Fund.
"The news is that ... AAOIFI sharia (Islamic law) scholars have approved the issuance model presented to them end of November, with some technical adjustments," he told a forum at the Dubai International Financial Centre.
Bahrain-based AAOIFI reviews and amends accounting and auditing standards for Islamic financial institutions.
Islamic law proscribes the paying of interest for a service as well as speculation, and prohibits investment in sectors such as pornography, gambling, weaponry, alcohol or pork products.
Although Dissaux said there were "no obstacles for the development of Islamic finance in France," he pointed out that several issues came up, notably that of Islamic financial instruments in a secular system.
Arnoud de Bresson, the head of Paris Europlace, which promotes the Paris financial market, told the forum earlier that France has made legal and tax changes to accommodate Islamic financial products.
"We have made a series of legal and tax adjustments to integrate transactions and concepts that comply with Islamic ethical principles in our financial system by ensuring their tax neutrality with respect to conventional finance," he said.
Paris is vying to develop its own market for Islamic finance following the pattern of London, which has become in few years a flourishing centre for Islamic finance.
Britain has a Muslim population that some estimates put at over two million people, while France has roughly six million Muslims, around 10 percent of its population.
© 2010 AFP