= en & hash = 15d94bd65c2efa6962989d10e21543b7b7013c1c. https : / / www. ifsb. org / download. php? id = 5724 & lang = english & pg = / index. php. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice systemic role in thirteen countries. 3 there ’ s also a nascent islamic insurance industry ( takaful ) – and a much larger capital market, anchored around the growing stock of sukuk4 issued by companies and governments ( chart 1 ), and over 1, 500 shari ’ ah compliant investment funds. chart 1 : global sukuk issuance and stock outstanding source : islamic financial services industry stability report 20202 the role of the uk and the bank of england in supporting islamic finance so far, so impressive. but what, you might ask, does all this have to do with the uk or the bank of england, when the centre of gravity for islamic finance lies in the middle east, north africa, south and south east asia? well, the fact is that, outside those regions, the uk is the pre - eminent centre for islamic finance. and that reflects its significant, well - established domestic muslim population ; its strong relationships with the wider muslim world ; and its deep expertise in financial market origination and distribution, embedded in a mature legal and regulatory framework. 5 indeed, islamic finance in the uk goes back many decades ( table 2 ) : from commodity - based short term liquidity management and trade finance in the 1970s, to the first uk islamic bank, investment funds and takaful in the early 1980s. 6 defined by the islamic financial services board as countries where at least 15 % of banking assets are ( self - declared as ) shari ’ ah compliant. islamic financial instruments conferring direct partial ownership of underlying assets. see for instance ‘ challenges and opportunities for islamic banking and finance in the west : the united kingdom experience ’ by rodney wilson [ 1999, 2000 ] 7 ( 1 & 2 ) islamic economic studies 35 - 59 ; or ‘ islamic finance in the united kingdom : factors behind its development and growth ’ by ahmed belouafi and abdelkader chachi [ 2014 ] 22 ( 1 ) 37 - 78. al barakah international bank, dar al mal al islam

##e _ pressoffice on the expertise of fellow central bankers across the middle east and asia, including those from bahrain, malaysia and the uae. in light of that research, we triaged a number of potential models to gauge which might fit best with the specificities of the uk market, legal and regulatory environment. we consulted publically on those options in 2016, and again in 2017 to fine tune our intended approach. 18 today, after a long and comprehensive process, i ’ m pleased to announce that the alternative liquidity facility will be open for business from the first quarter of 2021. the new facility will provide uk islamic banks ( and indeed any other uk banks with formal restrictions on engaging in interest - based activity ) with greater flexibility in meeting hqla requirements, enabling them to hold a reserves - like asset in a non - interest based environment. the alf will be structured as a wakalah or fund - based facility : a commonly used model in islamic finance ( chart 4 ). in simple terms, that means that participant deposits will be backed by a fund of assets, the return from which, net of hedging and operational costs, will be passed back to depositors in lieu of interest. the strengths of this model include its relative simplicity – conceptually and practically – and its flexibility to accommodate future changes in what is a still fast - developing market. the alf will grow as the uk islamic bank sector grows. and it will be well placed to exploit the growing diversification of available hqla - eligible sukuk assets. over the coming months, we will finalise legal documentation, complete our operational testing and begin the onboarding process for eligible applicants. firms should expect to commence this work from january 2021. once operational, the alf should help put the uk islamic finance sector on a more level footing with the rest of the market, giving firms here greater flexibility in meeting their liquidity requirements, and helping them to compete with conventional peers while staying true to their founding principles. https : / / www. bankofengland. co. uk / - / media / boe / files / paper / 2016 / establishing - shariah - compliant - central - bank - liquidity - facilitiesconsultation. pdf and https : / / www. bankofengland. co. uk / / media / boe / files / paper / 2017 / sclf _ consultationpaper2017. pdf? la = en & hash = e6c1bcee76