Islamic finance industry trends to be studied

MANAMA: Trends, opportunities and the future direction of the global Islamic finance industry will be highlighted at a strategic briefing being organised by the International Islamic Financial Market (IIFM).

The exclusive session, for senior executives of Islamic financial institutions, will also feature IIFM's Master Agreement for Treasury Placement (MATP), a benchmark document, which will be the world's first standardised Islamic finance contract when it comes to market in the near future.

Industry leaders attending the session, at Sheraton Hotel on May 8, will also be briefed about progress on two other benchmark initiatives being developed by the IIFM.

The event will be held under the patronage of the Central Bank of Bahrain (CBB).

"The CBB is delighted to support IIFM's ground-breaking initiatives, which will serve the Islamic banking and finance industry worldwide," said CBB executive director banking supervision and IIFM chairman Khalid Hamad.

Uniformity of documentation and products as well as harmonisation of market practices across geographic borders is a critical challenge, which the IIFM is addressing in partnership with market players from around the world, he said.

"The upcoming session is aimed at the industry's key market participants, who are either involved in IIFM projects through its working groups or those institutions with business activities relating to IIFM initiatives," said IIFM chief executive officer Ijlal Alvi.

The briefing session will open with a presentation on the prospects of the global industry for Islamic finance, as well as trends and opportunities by Kuwait Finance House (Malaysia) chief economist and head of research Baljeet Grewal.

The other panelists include senior executives from UBS, Linklaters, Clifford Chance, Standard Chartered, Al Salam Bank, Al Baraka Banking Group, United International Bank, Ernst & Young, JP Morgan, ABC Islamic Bank and prominent Sharia scholars, who are actively involved in driving IIFM's various initiatives.

A key highlight of the briefing session will be the MATP, which is in the final stages of review and which the IIFM expects to unveil in due course.

The MATP will significantly help the Islamic banking industry's commodity Murabaha transactions, which form the bulk of Islamic money market transactions.

Leading international legal firm Clifford Chance is the legal counsel for the project.

"We are delighted to be working with the IIFM on this important and exciting initiative. Together with the market participants the objective is to work towards standardised documents that can be adopted by all financial institutions, both Islamic and conventional, thereby enhancing the cost, time and operational efficiencies of Shari'a compliant deposit arrangements being effected," said Clifford Chance Islamic finance head Qudeer Latif.

Bahrain's IIFM to host review of landmark contract

Bahrain-based financial regulator the International Islamic Financial Market (IIFM) will host a strategic review of the world's first standardised Islamic finance contract on May 8, the Bahrain News Agency (BNA) said late on Monday.

The IIFM, which focuses on developing global Islamic capital and money markets, has developed the Master Agreement for Treasury Placement (MATP) to significantly facilitate worldwide commodity murabaha transactions - a market worth around $100 billion - and will be reviewed by leading industry figures at the session in Bahrain.

"We are delighted to be working with the IIFM on this important and exciting initiative," said Qudeer Latif, head of Islamic finance at lawyers Clifford Chance, who are legal counsel for the project.

"Together with the market participants the objective is to work towards standardised documents that can be adopted by all financial institutions, both Islamic and conventional, thereby enhancing the cost, time and operational efficiencies of sharia compliant deposit arrangements being effected."

The IIFM said on April 7 the MATP was currently awaiting final review by prominent sharia scholars, and is expected to gain wide acceptability because commodity murabaha transactions are the most commonly used Islamic money market product.

The review of MATP will be the highlight of the IIFM's strategic review of the sector, which will be attended by senior executives of Islamic financial institutions in Manama.

"The upcoming session is aimed at the industry's key market participants, who are either involved in IIFM projects through its working groups or those institutions with business activities relating to IIFM initiatives," said IIFM Chief Executive Ijlal Alvi.

Institutions represented at the session, patronised by the Central Bank of Bahrain, include Kuwait Finance House (Malaysia), UBS, Linklaters, Clifford Chance, Standard Chartered, Al Salam Bank, Al Baraka Banking Group, United International Bank, Ernst & Young, JP Morgan and the ABC Islamic Bank.

The IIFM, founded in 2002, was set up by the central banks and monetary agencies of Bahrain, Malaysia, Brunei, Indonesia and Sudan, as well as the Islamic Development Bank to facilitate the development of international Islamic capital and money markets.

The IIFM also said it was working on several other market development initiatives, which are aimed at the development of a globalised Islamic finance industry and Islamic capital markets.

IIFM to step up sukuk market research

Bahrain Tribune-Bahrain based International Islamic Financial Market (IIFM) was mulling the possibility of initiating couple of additional research projects during 2008 to further enhance the development of sukuk market.

The 18th Board of Directors meeting of IIFM was held yesterday in London, where the board members reviewed the progress of development initiatives spearheaded by IIFM, be it the Master Agreement for Islamic Treasury Placements or the Master Agreement for Islamic Hedging and Shariah-compliant repurchase agreement (Repo).

The International Islamic Financial Market (IIFM) was founded with the collective efforts of the central banks of Bahrain, Indonesia, Malaysia, Pakistan, Sudan, the Brunei Finance Ministry and Saudi Arabian based Islamic Development Bank as an infrastructure institution with the mandate to take part in the establishment, development, self-regulation and promotion of Islamic capital and money market.

IIFM's primary focus lies in the advancement and standardization of Islamic financial instrument structures, contracts, product development and infrastructure; and the issuance of guidelines and recommendations for the enhancement of Islamic capital and money market globally.

"IIFM is gratified by the support and guidance provided by all board members to its several initiatives undertaken in order to advance the growth of the Islamic Finance Industry.

Such initiatives are critical for activating sound, effective and truly global Islamic capital and money markets, both primary and secondary," said Ijlal Alvi, CEO of IIFM.

"We are extremely pleased with the support extended by the UK financial services industry in developing market standards which will be acceptable across borders," he said. He also appreciated the efforts of UK Government in developing Islamic banking and finance industry in UK and making London as an Islamic financial centre.

Over 150 international and UK based financial experts representing HM Treasury, Debt Management Office, City of London, Financial Services Authority, financial institutions, regulatory bodies, law firms and other related institutions participated.