IFSB approves technical note for stress testing Islamic financial service providers

The Council of the Islamic Financial Services Board (IFSB) has approved the adoption of a new technical note for stress testing institutions offering Islamic financial services (IIFS).

The Technical Note on Stress Testing for IIFS (TN-2) aims to provide regulatory and supervisory authorities (RSAs) and market players of the Islamic banking industry with the appropriate technical guidance to develop, conduct and assess stress tests. The document addresses multiple types of risks and their interrelated effects on the overall financial position and performance of the portfolio, institution, group or system. These risks include, but are not limited to, credit risk within financing portfolios, market risk on assets held, foreign exchange risk, liquidity risk, rate of return risk, as well as discussions on aspects of sharīʻah non-compliance risk.

Specifically, TN-2 aims to:

• Facilitate the design and simulation of solvency and liquidity stress tests for IIFS, including providing guidance on establishing macrofinancial links, running scenarios of various assumptions and stress parameters;
• Highlight the specificities of risk exposures in IIFS and how they need to be captured in stress-testing exercises; and
• Provide stylised numerical examples of IIFS stress tests under different shock scenarios.

TN-2 offers five basic stress test templates: one each for conducting credit, market and liquidity risk assessments, as well as for rate of return risk, and a scenario analysis template that combines credit and market risk stress tests. The proposed basic stress test templates provide the flexibility of having stress test results analysed and assessed across three levels: at a portfolio level, at an institutional level and also at the industry-wide level.

The scope of TN-2 is limited to the banking sector and covers both institutional-level (i.e. tests used by institutions to assess their risk tolerance and capital level) and industry-wide stress tests (i.e. those used by regulatory and supervisory authorities (RSAs) as a supervisory tool for financial stability analysis stress testing). RSAs may extend the application of TN-2 to Islamic “window” operations that are self-contained, or modify it for application to other types of IIFS that fall within their jurisdictions.

The application and implementation of TN-2 is subject to the adoption of other applicable IFSB Standards and Guiding Principles – in particular, IFSB-12: Guiding Principles on Liquidity Risk Management for IIFS; IFSB-13: Guiding Principles on Stress Testing for IIFS; and IFSB-16: Revised Guidance on Key Elements in the Supervisory Review Process of IIFS. The TN also complements IFSB-17: Core Principles for Islamic Finance Regulation (Banking Segment), which aims to assist the surveillance and assessment of Islamic banking sector.

Interested?

The soft copies of TN-2 will be available on the IFSB website in both English and Arabic.

Qiagen opens new office in Malaysia

QIAGEN has opened a principal office in Malaysia, QIAGEN Biotechnology Malaysia, to serve its growing base of customers for 'sample to insight' solutions, enabling them to help fight diseases using molecular diagnostics, break new ground in research for the life sciences and pharmaceutical industry, and protect the public through food safety and forensics testing applications.

"Opening this new office marks a milestone for QIAGEN. We have grown rapidly in Malaysia since 2006. Our expansion is gaining momentum as we serve Malaysia's doctors, hospitals and diagnostic laboratories, university researchers, growing biotech and pharma industry, and other labs," said Ian Martin, Vice President Asia Pacific of QIAGEN. "We have many initiatives, such as a partnership with the Malaysian Ministry of Health to enhance cervical cancer screening, work with tuberculosis control authorities to protect high-risk individuals from active TB, and support for reliable food testing such as ensuring halal integrity. QIAGEN's mission is to make improvements in life possible, and we appreciate the welcoming business environment in Malaysia."

QIAGEN's sales in Malaysia are expanding at strong double-digit rates, contributing to the company's growth in emerging markets around the world. Molecular diagnostics solutions, in particular, are gaining widespread acceptance in Malaysian healthcare. QIAGEN entered the country by acquiring Research Biolab Malaysia in 2006 and has since expanded, especially into clinical testing solutions. 

PCR-based food testing to grow at a CAGR of 11% through to 2016

During the past three decades since its invention, the polymerase chain reaction method (PCR) has become a fundamental method for analysis in life sciences. While developed countries still dominate the PCR market, emerging markets are showing strong growth trends. 

A September study from Acubiz Consulting titled The Asia Pacific Markets for PCR Technologies identifies market dynamics in various countries in the Asia Pacific (APAC) region and forecasts the potential of the market related to product segments, technology segments, and end-use segments. 

The global demand for PCR was around US$10.6 billion in 2013. Even though North America had the highest market share in 2013, the Asia Pacific region is forecast to grow at a CAGR of over 11% between 2013 and 2018.

The application segments of this platform are still expanding, driven by the expiry of key PCR patents. The rising investments in the field of companion diagnostics have also been boosting the demand for PCR. Food safety testing is another significant end-use segment of the technology, driven by both consumer demand and regulatory requirements. Identifying the animal origin of meat products is another application.

Companies featured in this report include Abbott Laboratories,
Arachem, Cepheid, Fisher Biotec, KogeneBiotech and Seegene.

New report on halal testing markets from AcuBiz Consulting released in November

Research and Markets has announced the addition of the Halal Testing Markets - Regulatory Trends in Southeast Asia by AcuBiz Consulting to their portfolio.

According to the report, demand for halal testing is on the rise worldwide. Halal certification can open up significant global trade opportunities for companies in the food, cosmetics, and pharmaceutical industry segments. This is being viewed as a means to encourage exports, tourism and research. Middle East and North Africa (MENA) are the most promising regions for halal products even though demand is global and growing. Economic opportunities for halal food exist even in non-Muslim countries, since halal certification is being perceived as an assurance of quality by consumers in general.

Halal standards are applicable not only to the end products but also to the ingredients and processes used in the manufacturing, packaging, labelling, and transportation. The halal economy covers stakeholders such as the butchers involved in ritual slaughtering of meat and poultry, food manufacturers, retailers, restaurant chains, shipping companies, and halal certification agencies.

Southeast Asia is at the forefront of developing halal testing regulations and has established processes for halal certification related to several industry sectors. Malaysia is leading the efforts in the region. Since 2006, Malaysia has been recognised as an international halal-hub for the production and trade of halal products and services.

This report focuses on the regulatory trends related to halal testing and halal certification. Particular emphasis is on the new opportunities being created by this emerging trend for technology companies with diagnostic platforms that can offer accurate and fast detection of non-halal components in various sample matrices in the areas of food, pharmaceuticals and cosmetics.

Companies mentioned in the report include Agilent Technologies, Asia-Pacific Special Nutrients, BIORON, Capital Biotech, Eurofins, Genon Laboratories, Halalysis, InstantLabs, Lynxcells Biosciences (formerly BST Consultancy & Services), Olipro Biotechnology, Profound Kestrel Laboratories (a subsidiary of Revongen Corporation Centre), Progenus, QIAGEN, Revongen Corporation Centre, and XEMA, formerly known as Xema-Medica.                        

Halal testing kits to get faster

The University of Selangor is working on a kit that can determine if tested material is halal within a minute. Nanosensor technology will be deployed to determine if the food, medicine or cosmetics has up to 0.001% of pig content, said Unisel Vice Chancellor, Prof Dr Anuar Ahmad in a 1 July report cited in Selangor Kini.

The kit, which is only to be available in December 2015, could be of use to Muslim consumers, food, medicine and cosmetics manufacturers in addition to certification bodies.

Existing halal testing typically makes use of polymerase chain reaction (PCR) or enzyme-linked immunosorbent assay (ELISA) methods. Profound Kestrel Labs has the PKL PorcineTrace PCR kit, which enables detection of porcine DNA down to 5 pg of porcine DNA traces in food products within approximately 3-4 hours (excluding the DNA extraction process). Its PKL Porcine qPCR Detection kit utilises a slightly different PCR method to come up with results in two hours, excluding DNA extraction.

Perkin Elmer, which already offers a halal testing kit called the Porcine Detection Kit for raw and processed meats, has created a table comparing current methods for determining if material is halal. The company's kit uses immunochromatography, and can complete tests in 20 minutes, with 0.005% accuracy. The company notes that tests were only done on up to 0.005% concentrations and the kit could well detect pork at even lower concentrations.

Source: Perkins Elmer website.

In January this year, analytical technology firm AB SCIEX announced that its scientists, together with scientists from the University of Münster, Germany, had developed a new method for detecting pig and horse contamination of meat, including beef, chicken, lamb and others. The company had previously developed similar methods for protein screening in food, including new techniques for detecting allergens such as eggs, milk, sesame seeds, nuts, and mustard simultaneously in food samples. 

The new mass spectrometry-based method offers a more accurate and reliable approach to identifying meat species than other methods, AB SCIEX said, and can detect markers of multiple animal species in a single run whereas traditional methods such as PCR or ELISA can lead to false negative or false positive* findings. 

"One of our goals was to develop a method that could be widely and routinely used by scientists in food testing labs, many of which have suitable mass spectrometry platforms," said Dr. Jens Brockmeyer, Research Group Leader at the Institut für Lebensmittelchemie, University of Münster in a release from the company in January.

Scientists at AB SCIEX are continuing to look into other similar areas of ethical concern, including detection of gelatin that has come from species such as beef and pork. An experiment conducted by AB SCIEX has shown that a gelatin ingredient can be extracted and analysed in less than 1 hour and a 1% impurity of pork in beef gelatin can be detected. The method can be used to detect the origin of gelatin that is found in sweets or medicine.

*False negatives claim that the test is negative when it is not. In a test checking if a beef sample contains pork, a false negative would say there is no pork when it actually exists in the meat. A false positive claims the test is positive when it is not. In a test checking if a meat sample contains pork, a false positive would show that there is pork in the meat when there is actually no pork.