When Stella Cox first applied for a job on the Middle East desk of Kleinwort Benson’s corporate banking team, she was rejected. Subsequent applications were unsuccessful too. It was the mid-1980s and it was politely suggested to her that, for cultural reasons, it wouldn’t be appropriate for a British woman to work with the desk’s conservative client base.

But she persisted until she persuaded the desk to give her a six-month trial. That was 32 years ago and, today, Stella is one of the leading lights in the Islamic finance world. In February 2017, Islamic Finance Review ranked her number one in a top ten list of Women in Islamic Finance and Banking, and in June 2016 she was awarded a CBE for services to the economy and for championing the development of Islamic finance in the UK. 
The attraction of Islamic financeHer career in the sector has been, excuse the pun, stellar, but joining financial services in the first place wasn’t a conscious decision. In the mid-1980s, jobs in the City were aplenty and, with two sisters already working for international banks, following in their footsteps seemed like a natural move. She found herself working as a junior administrator on the Japan desk of Kleinwort’s corporate banking team. The Middle East desk was next to her.

At the time, it was unusual for a British merchant bank to be offering Islamic finance services but Kleinwort, first established in 1852, had a long history of working with Middle Eastern merchant families and private groups. During the mid-1970s, those clients began to realign themselves with Islamic finance principles and, in order to continue working with them, Kleinwort was far-sighted enough to create specific products and services for them that did the same.  

“It was quite interesting to see people working with something as specific as a faith-based finance and investment strategy,” Stella says. She also liked the sound of some of the exotic Middle Eastern locations her colleagues were travelling to. A combination of these two factors prompted her to apply for a job on the desk. Her multiple rejections didn’t offend her, because she knew that bureaucracy made it very difficult to travel to certain areas of the core marketplace.
Launching DDCAP
Contemporary Islamic finance has only really emerged over the past 40 years or so, and Stella says she feels privileged to have played a part in this process. “To enter the development of the market at a fairly early stage of its growth and to have been involved in seeing the footprint of the industry grow geographically, to see it spread across financial disciplines, across asset classes, across different sectors, has been an extraordinary opportunity.” 

In her 14 years at Kleinwort, she, along with her Islamic finance team, worked across every division of the bank, apart from the Private Client division. In 1998, she left Kleinwort to co-found DDCAP Group, a pioneer of Islamic finance intermediation services.
"It was quite interesting to see people working with something as specific as a faith-based finance and investment strategy"What attracted her to the DDCAP proposition was having a firm that would make connections, look at new structuring solutions, introduce fund managers and other best-of-breed financial sector firms to Islamic institutional clients and, conversely, to introduce those clients to the international marketplace and help them to grow awareness of what they were doing. 

“The best way to do that was to establish an intermediary model and in 1998, that didn’t exist within Islamic financial practice,” says Stella. Under her stewardship, DDCAP has grown to a team of 45 people, serving clients and counterparties not just in Muslim majority countries, but across the world.
Evolving the Islamic finance sectorThe sector’s emergence has not been without its challenges and Stella has played an active role in helping to tackle them.

Stella was a part of the group of practitioners convened in Beirut in 2006 by Professor Rifaat Ahmed Abdel Karim, a globally-renowned Islamic finance expert, to write the first Islamic finance qualification for new entrants to the market. Stella authored the asset management module for the exam, which was later picked up and expanded by the CISI. Over the past ten years, the CISI has updated the modules, brought in new tutors and developed its dissemination to a broader marketplace. Recent Reuters research suggests the CISI qualification now has more uptake than any other in the Islamic finance market globally.

“The work that the CISI has done has been invaluable because it has increased the programme's point of connection to the wider financial markets, and one thing that we all believe is very important is that Islamic finance is connected to global financial practice and that new entrants understand how the markets can link and work together appropriately,” says Stella.
Islamic finance in the UKCloser to home, Stella has played an important part in the development of the UK’s Islamic finance sector.

Stella was involved in a task force that the Bank of England set up to address concerns that British Muslims did not have access to financial services comparable to those available on the secular market. Its work resulted in the UK financial regulator authorising the first UK Islamic bank – the Islamic Bank of Britain, which has now rebranded as Al Rayan Bank – and working to ensure a regulatory level playing field for Islamic financial practice in the UK. So, for example, the structuring process that was required to render a mortgage Sharia-compliant initially resulted in borrowers paying double stamp duty. But a revision of stamp duty rules eliminated the cost differential of the product while it still remained Sharia-compliant.

At the time, then Prime Minister David Cameron said he wanted London to stand alongside Dubai as one the great capitals of Islamic finance in the world. Stella was invited to sit on the UK Government’s first Islamic Finance Task Force, which was set up to revive the UK proposition for Islamic finance.
"The work that the CISI has done has been invaluable"The work of the task force, on which Stella was the practitioner lead for the regulatory work stream, resulted in several new Islamic finance products listed on the London Stock Exchange, the most notable of which was the UK’s first sovereign sukuk. 

The development she is most proud of is the fact that the UK financial regulator has authorised a series of Islamic banks in the UK, making it the first non-Muslim majority country in the world to do so.
The role of TheCityUKThe UK Government’s Islamic Finance Task Force was convened to see what could be delivered ahead of London hosting the World Islamic Economic Forum at the end of 2013. Once the task force was dismantled, TheCityUK picked up the baton as the champion of Islamic finance in the UK. As the government’s private sector partner in all matters relating to the City, it made sense for the organisation to convene a working group for the UK’s Islamic finance sector – a group that Stella has chaired since 2014. Practitioners from all corners of the sector are represented on the Islamic Finance Market Advisory Group, which is tasked with maintaining an open dialogue with government and acting as a centre for thought leadership on Islamic finance in the UK.

Stella believes TheCityUK group has achieved a fair amount to date. As well as supporting the UK Government through the process of issuing its first sukuk, it has ensured Islamic finance remains on ministers’ agendas by raising concerns when legislation or regulation makes it challenging for the sector to develop. Student loans and real estate finance are just two areas where TheCityUK has lobbied the UK Government. 

There are still many exciting developments in the pipeline. For example, the Islamic finance sector is only just starting to explore how it can expand its offering into the asset management space. One driver behind this is a move among sovereign wealth funds to apportion a significant part of their allocation to Sharia-compliant assets. 

The potential for development across other areas of finance is endless, Stella says. “I’m just sorry that, as the years advance, I’m not going to see quite as much of that as I might want to do.”

The full version of this article was originally published in the Q4 2017 print edition of The Review. The print edition is available to all members who opt in to receive it, except student members. All eligible members who would like to receive future editions in the post should log in to MyCISI, click on My Account/Communications and set their preference to 'Yes'.
Seen a blog, news story or discussion online that you think might interest CISI members? Email jake.matthews@wardour.co.uk.