International Islamic Financial Market (IIFM) forges ahead with critical projects to develop capital, money market

The International Islamic Financial Market (IIFM) is forging ahead with a number of critical projects aimed at furthering its mission of developing Islamic capital and money markets, a top official said yesterday. Re-energised by an ambitious business plan and a re-launch in fourth quarter of last year, the organisation is making noticeable progress in advancing a number of industry-building initiatives, which will ensure the establishment of vibrant, transparent and robust international Islamic financial markets.

"We are implementing a multi-pronged programme of action that seeks to develop the overall infrastructure for Islamic capital and money markets, as well as specific components of such markets," said IIFM chief executive officer Ijlal Alvi.

He was speaking at a Press conference held in Kuala Lumpur, Malaysia, on the sidelines of the four-day Global Islamic Finance Forum, which ends today.

"The overall mission of the IIFM is to enhance cross-border trading in Islamic financial instruments by promoting transparency and efficiency, which can only be achieved through uniformity and infrastructure development," said Mr Alvi.

The centre piece of the IIFM action plan is the development of a Master Agreement for Islamic Derivatives, for which it has established an alliance with the International Swaps & Derivatives Association (ISDA).

The two organisations are carrying out joint work on the development of a Master Agreement for documenting privately negotiated Sharia compliant hedging/derivatives transactions.

The current stage is the development of a frame work which will be the basis of further work on the possible structure or products for hedging purposes.

The IIFM is also currently assessing, in consultation with industry market participants, the development requirements for Islamic instruments, especially sukuk at primary as well as secondary market level.

The development work will commence in next few months, the IIFM said in a statement.

It is expected that a major portion of the work will be carried out in alliance with the International Capital Market Association.

The IIFM is also developing a Master Agreement for Islamic Treasury Murabaha Contracts.

The research and development project on Islamic inter-bank market and products has an initial emphasis on short-term sukuk and global Islamic liquidity management and related issues.

The IIFM Secretariat will soon be launching the project, which is expected to be led by several major institutions.

Another key initiative is the development of an Islamic capital market platform, for which a feasibility study is currently under way.

A fourth highly focused forum is scheduled to be held in Bahrain on June 18 and 19.

The event will consist of sessions on Islamic REITS, Liquidity Management and guidance and case study workshops on IIFM industry building initiatives.

The event is being co-organised by the Islamic Research and Training Institute (IRTI) of the Islamic Development Bank, while UK-based European International Islamic Bank (EIIB) is the platinum sponsor and Kuwait Finance House (Bahrain) and Calyon Bank (Bahrain) are gold sponsors.

The IIFM was established by the collective efforts of its founding and permanent members Islamic Development Bank, the central banks of Bahrain, Malaysia, Sudan Indonesia, Pakistan and the Brunei Finance Ministry.

Islamic Capital &
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Unification
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