Deutsche Bank starts Shari'a compliant platform

Deutsche Bank has launched al mi’yar, a first of its kind platform aimed at facilitating the issuance of Shari’a compliant securities.

Al mi’yar, from the arabic ‘the Standard’, is a Luxembourg domiciled platform, developed by Deutsche Bank, with Luxembourg Financial Group A.G. as the Shari’a investment manager and Deutsche Banks Trust & Securities Services group providing the settlement framework.

Deutsche Bank’s Structuring for the Middle East and North Africa head Geert Bossuyt said the development demonstrated its ability to adapt all types of investment products and strategies to the Shari’a compliant world.

“Al mi’yar will revolutionize the issuance of securities in an Islamic manner. The platform meets all of the latest standards issued by the Accounting and Auditing Organization of Islamic Finance Institutions (AAOIFI) and hence should be globally acceptable,” Bossuyt said.

It will enable Islamic investors to meet their specific investment objectives by giving them exposure to different asset classes without compromising their Islamic beliefs. By comparison to other Islamic platforms, the new platform maximizes efficiency and protection of investors’ interests, while generating liquidity and returns.

It shows the way forward for securitized products issuance with its standardization, fiduciary control and open architecture for deal originators.

Al mi’yar sets a new standard as it delivers better protection of clients’ interests by moving the issuance of securities into a fiduciary framework.

Until now, issuance platforms have always been closely controlled by the deal originating banks. The new platfomr revolutionizes the approach to securities issuance as it puts a fiduciary instead of a bank in control.

The certificates issued on the platform will be tradable Islamic securities, as they represent ownership in tangible Islamic assets.

Luxembourg Financial Group, the independent Islamic investment manager, will manager the assets. Luxembourg Financial Group generates returns (payable to the security holders) by selling those assets for a benchmarked sales price to an unrelated party. The benchmark method facilitates exposure to a wide variety of asset classes or indices.

In addition, the platform allows for the issuance of tradable Islamic money market products settling with short settlement cycles (T+0) enabling the issuance of overnight products or other short dated money market instruments and hence enhancing the liquidity of the Islamic money markets.