Azzad joins interfaith coalition asking SEC to reassess pay ratio rule

(Falls Church, Virginia, 3/22/17) — Azzad Asset Management has joined other faith-based organizations in signing a letter to the United States Securities and Exchange Commission (SEC) calling for the continuation of a rule requiring companies to disclose how much CEOs make compared to their employees. The pay ratio provision is part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act; it requires publicly traded companies to disclose median employee compensation along with a ratio of how that compares to the chief executive’s pay–information that was previously inaccessible to shareholders. In February, acting SEC Chair Michael Piwowar announced that the SEC would reconsider implementation of the rule and requested public comment. Organized by Praxis and Christian Brothers Investment Services, the letter was signed by nine faith-based investment firms and delivered to the SEC on March 21. It states, in part: “We are aware that income inequality may be an inevitable outcome of the freedom of opportunity for which the United States is deservedly renowned. Our argument, however, is that in a democratic society, there should be full disclosure, awareness and discussion about what our existing levels of inequality are, whether this state of affairs is acceptable, and if it is

March 22, 2017 No Comments

What Dodd-Frank can learn from Islamic finance

Five years ago last month, Congress took a step toward reining in elements of a troubled financial system when it passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The move was touted as an end to the laissez-faire principles embodied in the repeal of Glass-Steagall, which had previously protected against many of the excesses the banking industry is now notorious for. A Pew poll from earlier this year found that 63 percent of Americans said the US economic system is no more secure today than it was before the 2008 economic crisis. One explanation for this may have to do with inadequacies in the legislation. How can we continue to make things better? One answer can be found in the principles of Islamic finance. Almost everyone remembers that high-risk loans, speculation, and leverage fueled the run-up to the Financial Crisis. As the financial sector began to collapse in mid-September 2008, the aggregate default and the trading of mortgage-backed securities (MBS) was a major liability. Banks bought and sold MBS products of all types, keeping some on their books but shifting most of the credit risk to bank trading partners. Although Dodd-Frank provides for securitizing banks to retain an

August 11, 2015 No Comments