Prime Rate Capital Management, a specialist provider of liquidity and fixed income products, is launching an Islamic liquidity fund, the first Shariah-compliant liquidity instrument targeting a triple-A rating for the Islamic wholesale investment markets.
In response to market demand for Shariah-compliant cash management instruments, the Islamic Liquidity Fund will provide Islamic financial institutions with a pooling mechanism that can be used for investment of overnight, call and short-term cash surpluses. It aims to offer investors a secure home for their cash holdings while also seeking to provide competitive profit rates and same day access to cash.
The fund, to be made available in pounds, US dollars and euros, will invest in commodity Murabaha transactions and has been designed for Islamic institutional investors as well as the Islamic clients of financial institutions throughout the Islamic world. It is expected also to appeal to Islamic wholesale market investors including banks, central monetary authorities, development bodies, sovereign wealth funds and family offices.
Chris Oulton, chief executive officer (CEO) of Prime Rate, said: “This is an innovative cash product for the Islamic markets. Investors who currently need to manage overnight cash are limited in the options available. We have recognised the need for a short-term solution in the Islamic money market and are launching a fund which aims to enable capital stability and returns on short term cash, while at the same time remaining consistent with Islamic principles. We believe now is the right time to offer this new fund, in response to a rapidly growing Islamic finance world, and we are confident that we are delivering a solution which meets the strict criteria for Shariah-compliant investments.”
The fund will be domiciled in Ireland and listed on the Irish Stock Exchange. It is being developed in conjunction with Cross-Markets Limited. Yasaar Limited is the Shariah advisor to the fund.
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