The International Islamic Financial Market (IIFM) has been able in this short period of time to highlight some very essential and complicated issues to the Islamic Finance Industry, a senior official at the CBB said.
“The major issues such as Islamic Hedging Products, Islamic collateralization as liquidity management tool, unrestricted Wakalah Master Agreement, Sukuk standardization,” Khalid Hamad, Executive Director Banking Supervision at Central Bank of Bahrain (CBB) told the pre event seminar held on the sidelines of the WIBC 2013 on Tuesday.
The seminar covered key components of Islamic Capital and Money Market and the way forward in bringing unification in the Islamic Financial Services Industry.
“To date, IIFM has launched and published key standard product master agreements,” he added.
The IIFM is a neutral and non-profit organization. It was founded by the efforts of several regulators and IDB in 2002 with the mission of facilitating the international secondary market trading of Islamic financial products and instruments through providing independent Shari‘ah enhancement and guidelines for new products and documentation standardization needs for the industry, especially for the Islamic Capital and Money Market segment of the IFSI. IIFM ultimate objective is to facilitate unification, Shari‘ah harmonization and legal reforms in Islamic financial markets.
For these reasons and others, the IIFM initiatives are very selective and they are based on recommendations by all the stakeholders in the market and practical solutions are developed in consultation with the industry, because the main strength of the IIFM lies in the pooling of expertise from the regulators, financial institutions, legal, accounting and other market participants who work together under the guidance of the IIFM Shari‘ah Advisory Panel for the benefit of the IFSI.
Since the implementation of the revised strategic plan in 2007, IIFM has created a niche in standardization of products and documentation and added very appreciative and well received value to the industry.
It has also published very comprehensive well received three Sukuk reports on international and domestic issuances across the globe which received a very positive reaction from the market.
The appreciative work of the IIFM is not only in publishing master agreements, reports, concept papers, Sukuk researches etc., but it is beyond that. IIFM organizes seminars and workshops in order to raise awareness and sensitize the market of the new developments in the Islamic banking industry. The recent such consultative seminar was jointly organized by IIFM and IRTI of IDB on the 6th November, 2013 in Bahrain, on the lessons learned from Sukuk default and restructuring of the recent past.
IIFM is currently working on several important projects, such as the Master collateralized Murabahah Agreement, Sukuk Standardization and more hedging products, etc. All these ambitious projects require substantial financial support. Hence, the industry’s support is required. Therefore I urge those non-member institutions to initiate the process of joining IIFM. As having more members will help and make IIFM able to harness all its efforts and give its best for the progress, and further sustainable growth of the Islamic finance industry.
“There are vast opportunities to be tapped globally for Islamic finance, not just amongst the Muslim investor community, but all in the global financial market. High standards of disclosure, transparency and governance will ensure sufficient levels of investor confidence that will lead to the development of a market that is robust and credible. No doubt that the major challenge in the development of Islamic finance is the need for it to be integrated within the global architecture. Therefore, the twin approaches of ensuring strict compliance with the principles of Islamic commercial jurisprudence and with internationally acceptable standards of conduct and discipline are critical key to success,” he added.