Dutch Islamic - Holland Financial Centre

Dutch Islamic
Financial Services
Working together
Matching Ernst & Young
capabilities to clients’
needs
EY’s Dutch Islamic Financial Services
Islamic finance is one of the fastest growing sectors within the
financial services arena. Shari’a compliant assets are today
estimated at $400bn and have been growing steadily at over 10%
a year throughout the past decade. With a global population of
1.5 billion Muslims, an inherent appeal to some non-Muslim
customers and with Shari’a financing developing as a source of
alternative corporate finance, the market is set to develop
considerably.
The global market has seen rapid change
The global market has seen significant change over the last five to
ten years. Middle Eastern and Asian banks and governments have
entered the capital markets through the issuance of sukuk.
The sukuk market has been particularly successful as an
alternative form of debt financing, with over $70 billion issued
worldwide and forecast to grow to $4 trillion in the near term.
Indeed, some of the largest recent issues are being used to fund
acquisition of European assets.
Boosted by the petrodollar and the increasing demand for Shari’a compliant financing, the industry is evolving to provide a wider array of
products and services. Islamic finance now offers a credible alternative proposition for those financial institutions searching for alternative
forms of funding or looking to invest and carry out banking activities in line with ethical principles.
The Dutch market is taking off
The Dutch supervisory authorities De Nederlandsche Bank and the Autoriteit Financiële Markten performed a combined exploratory study
with respect to Islamic finance. The conclusion of this study was positive. A substantive demand of Islamic finance exists in the Netherlands
as a result of the substantial number of Muslims in the Netherlands. Several financial institutions offer Islamic financial investments and a
number of financial institutions have shown interest in the possibilities of Islamic finance.
Why Ernst & Young
Our ability to harness the award winning Bahrain based Islamic Financial Services Group uniquely distinguishes us in the market place as a
leading provider of Islamic Financial Services, with a credible breadth and depth of expertise. In the Netherlands, our Islamic Financial
Services team includes specialists who are transaction advisors, accountants, tax specialists, regulatory specialists, compliance experts, IT
specialists, program managers and industry specialists. We offer an unrivalled understanding Islamic finance challenges and opportunities
in the Netherlands.
Our service offering
Ernst & Young is distinguished by an ability to assemble and integrate multi-disciplinary teams of experts across our service lines to address
the needs of our clients. These services include:
Audit and Assurance Services - We provide extensive Audit and Accounting advice for numerous Islamic Financial Services companies.
Using Ernst & Young’s rigorous audit methodology we have worked with our clients to provide independent audit opinions as well as audit
committee reports for Islamic providers and stand alone institutions.

Key principles
Underpinning Islamic finance
Riba
Prohibition of interest
الربى
الغرار
Gharar
Contracts must be clear with no link to
uncertain future events
المیس ر
Maisir
Pure speculation and gambling are prohibited
المحرمات
Muharamat
Ethical screen blocking prohibited activities
المشارك ة
Musharaka
Equitable sharing of profit and loss is
encouraged and favoured
Transaction Advisory Services - Ernst & Young has extensive
analytic and modelling services that offer breadth and depth of
capability, robust infrastructure and industrial strength. We have
worked with many institutions to deliver Business Modelling
capability and Quantitative Risk modelling assignments, in
particular providing extensive advice during the establishment of
a stand alone Investment bank and a UK Takaful start up.
Regulatory Services - We have assisted new stand alone Islamic
banks and insurance companies through the UK FSA
Authorisation process providing advice around regulatory
business planning, IT control requirements, prudential
requirements, liquidity management and stress scenario testing.
We also provide assistance in ensuring compliance in other UK
regulation, such as Capital Adequacy and Solvency II.
Tax Services - We provide key Tax advice focusing specifically on
the tax implications of UK set up and the tax consequences of
Shari’a compliant products, supported by advice and planning
around suitable VAT methodologies for the various transactions.
Technology Security and Risk Services - We have worked
alongside key stand alone Islamic institutions to review the design
of their IT security infrastructure, ensuring its effectiveness
around the identification of key risks and the mechanism
implemented to manage these risks. We have provided advice and
assurance for a Shari’a compliant investment bank on the
selection and implementation planning of a core banking platform
to support front, middle and back office functions.
Our Global Capability - Drawing upon the market expertise of our award winning Bahrain based Islamic Finance Services Group, we are
able to provide a host of additional services including:
- Strategic business plans
- Market & feasibility plans
- Operational advice including business restructuring, policies and procedures, chart of accounts, corporate governance and training
services
Recent projects
Audit and accounting
External auditors for the UK’s first
stand alone Islamic investment bank
providing an independent opinion
and recommendations for
improvements to the financial and IT
control environment.
Assisted large European banks in
understanding the fundamental
economics and IFRS accounting for
Shari’a compliant products.
Dutch Islamic Financial Services Team Contacts
Mohamed Bouker(Advisory) +31 88 407 1602 mohamed.bouker@nl.ey.com
Hans Moison (Audit & Compliancy)+31 88 407 1216 hans.moison@nl.ey.com
Zaina Ahmed-Karim (Audit) +31 88 407 1051 zaina.karim@nl.ey.com
Najib Aheztan (Tax) +31 88 407 1643 najib.aheztan@nl.ey.com
Marc Menon (Law) +31 88 407 0457 marc.menon@nl.ey.com
Islamic Financial Services Group (IFSG) Contact
Sameer Abdi +973 1753 5455 IFSG.bh@bh.ey.com
The Ernst & Young Islamic Financial Services Group (IFSG) is headquartered in Bahrain and serves clients throughout the whole of the
Middle East region. The IFSG team has won numerous awards for its services within Islamic finance and boasts a strong track record with
leading institutions around the world.
Other Contacts
Ken Eglinton, UK +44 207 951 2061 keglinton@uk.ey.com
Sabah Khan, USA +1 212 773 8329 sabah.khan@ey.com
Abdul Rauf Rashid, Malaysia +60 3 7495 8000 abdul-rauf.rashid@my.ey.com
About Ernst & Young’s Global Banking & Capital Markets Center
In today’s globally competitive and highly regulated environment, managing risk effectively while satisfying an array of divergent stakeholders is a key goal of banks and securities firms.
Ernst & Young’s Global Banking & Capital Markets Center brings together a worldwide team of professionals to help you achieve your potential — a team with deep technical experience in
providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry
issues. Ultimately it enables us to help you meet your goals and compete more effectively. It’s how Ernst & Young makes a difference.
Disclaimer
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional
judgment. Neither Ernst & Young nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as
a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.
www.ey.com
Taxation
Provided specific tax advice for an
Islamic investment bank on obtaining
tax relief for operating expenses
prior to FSA authorization.
Advisors to the HMRC in developing
their fiscal policies for Islamic
products.
Regulatory
Advised several Shari’a compliant
financial institutions on regulatory,
compliance and governance matters.
Provided assistance in the successful
authorization for newly established
banks and insurance companies.
tk/nl/2008-06