Ethis Global has officially adopted the AAOIFI Code of Ethics for Islamic Finance Professionals ahead of the standard-setting body’s 2021 implementation date as the Islamic fintech group prepares to launch Malaysia’s first regulated Islamic equity crowdfunding platform in the coming months, IFN Fintech has learned.
Already a signatory of the UN Global Compact — the UN’s corporate sustainability initiative — Ethis Global is now working on implementing the Islamic finance ethics code released by AAOIFI early this year across its operations in Kuala Lumpur, Jakarta and Dubai.
Designed, among others, to reduce operational risks of Islamic financial institutions, by mitigating Shariah non-compliance and reputational risks in particular, the AAOIFI Code of Ethics for Islamic Finance Professionals is one of four major projects under the Bahraini institution’s overall ethics initiative launched in January 2017.
While adoption by other organizations is largely voluntary, the code applies to AAOIFI-affiliated members (including fellows and trainers) effective next January and non-compliance could result in an official reprimand, mandatory passing of an ethics exam or revocation of fellowship.
As one of the earliest Islamic fintech start-ups to embrace this code, Ethis will work closely with AAOIFI and intends to provide reports and exchange knowledge on the implementation of the guidance; its head of Shariah, Mufti Yousuf Sultan, also an AAOIFI Master Trainer, is tasked with implementing the code across the firm’s global operations which now employ 30 staff. Several other Islamic fintech start-ups are also looking to adopt AAOIFI’s ethical code, Ethis Global Managing Director Umar Munshi told IFN Fintech.
This extra layer of compliance comes as Ethis is on the cusp of launching an Islamic equity crowdfunding (ECF) platform in Malaysia. The group’s Malaysian arm — Ethis Ventures — was the first Shariah fintech start-up to be awarded an ECF license by Securities Commission Malaysia in May 2019.
Currently at the final stages before it begins facilitating retail investments into Shariah compliant opportunities, Ethis Ventures is waiting for the final greenlight by the regulator which it expects to be forthcoming in the next two months, according to Umar. The group is already regulated and operating in neighboring Indonesia and has received a provisional license to begin its property crowdfunding business in Dubai as well.GlobalSadaqah, another Ethis subsidiary, is currently working with the Singapore Islamic Scholars and Religious Teachers Association to set up a cash Waqf fund. Last month, GlobalSadaqah enabled cryptocurrency donations via its platform.