BOOK REVIEW: The Chancellor Guide to the Legal and Shari'a Aspects of Islamic Finance
The Chancellor Guide to the Legal and Shari'a Aspects of Islamic Finance Reviews
By David Stokes
Journal of International Banking Law and Regulations
Volume 25 Issue 6
Whilst the worldwide financial crisis, and recent events in Dubai in particular, may have tempered the enthusiasm of Western finance houses for expansion into Muslim countries, in the longer run the Islamic market is one that cannot be ignored. Indeed, a significant and hitherto poorly-served market of Sharia compliant products often exists within the Western finance houses; own back garden. In order to be successful in producing and promoting products which are acceptable to the Muslim client, it is essential that the professional has a good understanding of what Sharia legal principles are and how they are applied in the financial sector. It is also important to identify and understand the areas of actual and potential conflict with the local legal system in order to find ways to in which conflicts may be removed. This book is one of the first to attempt to provide a comprehensive explanation and analysis of the complexities of Sharia and Islamic finance for non-Muslim legal and financial professionals.
For the uninitiated a helpful introductory chapter written by the editors outlines the three most significant differences which distinguish Islamic finance from the conventional banking finance. It also provides a brief overview of the subject matter of the 15 ensuing chapters. The chapter authors are all legal practitioners and advisers with real life expertise in the development of Islamic finance products. This ensures that the chapters remain grounded in the practicalities of providing a service rather than turning into philosophical exercises. The topics covered in the book are necessarily many and varied since Sharia law guides all aspects of the life of a devout Muslim, due to its five purposes of protecting the religion, life, mind, wealth and progeny of the believer. Thus the reader is offered chapters on, inter alia, the inheritance aspects of wealth management, on project finance, on takaful (Islamic insurance), on trade financing and on the taxation of Islamic financial products. In the light of the recent events the focus of chapter two on the Dubai International Finance Cent er might seem a case of unfortunate timing. nevertheless, the core issues that the chapter raises concerning the need for regulation specific to Islamic funds and securities are both succinctly expressed and informative.
In general the book is very well presented. All chapters are subdivided under numbered headings to aid the professional seeking to reference a specific point. Many also make effective use of real life examples to illustrate the key points being introduced and simple diagrams are included to help the reader understand the unfamiliar and financial and organisational structures which might otherwise seem complex. A slight criticism is that on occasion the proofreading appears to have fallen down, resulting in the use of some rather convoluted English phrasing. However, thankfully, such lapses never go so far as to mask the author's true meaning.
Overall the book provides both a practical and interesting introduction to the key concept of Islamic finance for the professional reader. It will not turn him or her into an expert overnight but it provides an excellent grounding and analyses the issues in sufficient depth to enable the non-specialist to deal with the practicalities of transactions and identify any matters that require specialist, expert advice.
View pdf of original review in the Journal of International Banking Law and Regulation