The Islamic investment industry got a major boost recently when Boston-based State Street Corporation, which lays claim to being one of the largest global financial outfits – servicing nearly 10% of the world’s assets, announced that it had obtained Shariah certification.
The firm’s product management head for Asia Pacific, Jeslyn Tan, told IFN Investor this certification – issued by Malaysia’s Amanie Advisors – is for State Street’s asset servicing business of custody and fund administration. “It is not related to our asset management business State Street Global Advisors.”
With US$44.3 trillion in assets under custody and/or administration as of the 30th June 2024, the State Street group operates globally in more than 100 geographic markets.
As the firm earlier announced the move was in response to growing interest in services for Islamic assets that adhere to Shariah principles, especially in Malaysia and Brunei, Jeslyn clarified this certificate allows State Street to have a global outreach which includes non-Muslim jurisdictions.
“We have seen increasing demands from institutions seeking to get service providers to offer Shariah compliant services for Islamic funds.”
To obtain this certification, Amanie Advisors was tasked by business and product teams at State Street to conduct a review of custody and fund accounting operating processes and service documentation, with advisory support to adopt best practices and ensure these services adhere to Shariah principles.
Stating that the US firm has already received queries from clients in the MENA region, Jeslyn said: “The addition of the Shariah compliant certification gives us an excellent platform from which to expand our service offerings into the growing Islamic finance ecosystem.”
Asked how the certification could impact existing operations at the outfit, which traces its origins back to 1792, Jeslyn explained “State Street’s offering of Shariah compliant services is part of an overall value proposition that is tailored for clients based on their needs”.
Jeslyn added that clients are expecting more innovation for their investment administration needs related to public and private market assets – which means the group often has to expand its services to the provision of a full front-to-back solutions, inclusive of managing diverse arrays of client data.
