Note: Access and Usage of IIFM Agreements is available exclusively to IIFM Members only
What are the IIFM MATP Agreements?
Published in 2008, the IIFM Master Agreements for Treasury Placement (MATP) represent the industry’s first-ever standardized treasury documentation for Murabahah transactions. These Shari’ah-compliant agreements were developed to facilitate efficient liquidity management within the global Islamic interbank market. They provide Islamic Financial Institutions with a streamlined framework for managing short-term cash flows, deposits, and funding needs, and are widely adopted across global Islamic financial markets for cross-border transactions.
Adopted Structure
The MATP framework consists of two standalone primary agreements based on Commodity Murabahah structures, as detailed in the structure memorandum:
1. The Master Murabahah Agreement (Principal-to-Principal): Governs transactions conducted directly between a Placing Institution and a Taking Institution without an agency arrangement.
2. The Master Agency Agreement: Used for Commodity Murabahah under an agency arrangement.
In the agency arrangement, the Placing Institution appoints the Taking Institution as its agent to purchase a Shari’ah-compliant commodity on its behalf. Once the purchase is completed and proper Qabd (physical or constructive possession) is established by the Placing Institution, it then sells that commodity to the Taking Institution on an immediate-delivery, deferred-payment basis.
Through these two specific structures, IIFM intends to provide the market with a transaction framework that remains free from prohibited organized Tawarruq.
Objective
The primary objective of these standard agreements is to enhance operational efficiency by providing robust, pre-approved legal framework documents for the industry.
Benefit
This standardization offers significant benefits by ensuring cost and time efficiency. It eliminates time-consuming and lengthy negotiation periods for every transaction, allowing institutions to execute transactions with greater speed and certainty.
N.B.
These Master Agreements for Treasury Placement (MATP) were drafted by Clifford Chance
Note: Access and Usage of IIFM Agreements is available exclusively to IIFM Members only