Mortgage lender Muslim Community Co-operative Australia (MCCA) has acquired an Australian Financial Services Licence (AFSL), marking its first steps towards building a wealth management practice that offers financial planning services.
MCCA, which until now has been limited to home finance and various forms of investment, is now licensed to deal in “shariah compliant” mortgage funds and property trust schemes — meaning they will be run in accordance with Islamic law.
According to managing director Chaaban Omran, the shariah compliant funds are set to eventually become the key investment mandate for a shariah-compliant Islamic superannuation fund.
In addition, the wealth management practice will in due course apply for a dealer’s licence and offer financial planning services to the Australian community “as an alternative to conventional products”, repackaged to offer a “more sophisticated version of ethical investment”, Omran said.
He added that under the supervision of the Australian Securities and Investments Commission (ASIC), MCCA has a new mix of staff to prepare for a stricter compliance regime.
“We have appointed new staff of different faiths from major financial services companies to enable us to deliver quality customer service and greater levels of professionalism.”
MCCA has also appointed former MLC practice manager Mohamed Elbotaty to head up the division as a financial planner and work across the licensing requirements.
“MCCA has made good progress in the right direction and has been selective about its partners,” said Dr Akhtar Kalam, chairman of MCCA.
“MCCA has faired well given the global financial crisis and has curbed costs and maintained a steady revenue base even in the face of adversity.”
Omran said MCCA’s new structure is expected to come into effect on July 1 this year, subject to regulatory approval.
“We should be ready to roll out the Product Disclosure Statement in mid-June, where we will offer investors applications to apply for units in the MCCA Income Fund,” he said.
Omran noted that when he joined MCCA as managing director 12 months ago, the board of directors made it clear that MCCA had to move towards an Islamic banking path.
“This meant that MCCA had to undergo a transformation from co-operative to corporatisation,” he said, adding that it required a great deal of organisational restructuring and the demutualisation of the co-operative.
“The unlisted public company together with the AFSL is certainly on the right track to corporatisation.”
Omran said the AFSL will not only allow MCCA to embark on a wealth management path, but also assist them in the establishment of Australia’s first Islamic bank.
He noted that local and international banks have approached MCCA as interest in Islamic finance and banking is increasing.
