Quadrant extends Basel II tool for Shariah-compliant firms

Source: Quadrant

Quadrant today announced its intention to extend the functionality of SAB2, their Basel II Standardised Approaches capital adequacy calculation and reporting solution, to meet the capital adequacy reporting requirements for IIFS (Institutions offering only Islamic Financial Services) in financial jurisdictions where Shari’ah rules and procedures apply.

The extensions are based on the standards for the Guiding Principles of Risk Management for Institutions and Capital Adequacy published by the IFSB (Islamic Financial Services Board) in December 2005. In addition to providing support for international and domestic financial products and services covered by the Basel II Capital Adequacy Regime SAB2 will include support for Islamic Finance products based on risk sharing and Shari'ah rules and principles including Murabahah, Salam, Istisna, Mudarabah, Musharakah, Sukuk and Ijahah. The capital adequacy reporting will provide the MCR (Minimum Capital Requirement) calculation for credit, market and operational risk based on the Standardised Approaches, catering for variances across different regulatory jurisdictions.

Paul Lockyear, COO of Quadrant said, "In extending SAB2 to meet the IIFS requirements we are responding to growing demand for capital adequacy reporting from Financial Services Providers operating under Islamic financial regulations around the world. With the opening of our new office in Dubai, UAE, we can also provide local support for the Islamic financial requirements across Asia and the Middle East."

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