Manama, Kingdom of Bahrain – The Board of Directors of the International Islamic Financial Market (IIFM) held its forty-third (43rd) meeting virtually to deliberate upon the standard-setting body’s various industry development initiatives as well as chart out its next 3 Years Strategic Plan for 2021-2023.
The Chairman of IIFM, Mr. Khalid Hamad Al-Hamad led the meeting proceedings which was attended by Directors on IIFM Board namely Datuk Danial Mah Abdullah (Labuan FSA, Malaysia), Dr. Mansur Noibi (Islamic Development Bank), Mr. Shukri Ahmad (Autoriti Monetari Brunei Darussalam), Mr. Irfan Sukarna (Bank Indonesia), Mr. Hassan Tibin (Central Bank of Sudan), Mr. Lilian Le Falher (Kuwait Finance House-Bahrain), Dr. Adnan Chilwan (Dubai Islamic Bank), Mr. Khurram Hilal (Standard Chartered Saadiq), Mr. Hammad Hassan (Bank ABC Islamic), Mr. Mohamed Omarah (Credit Agricole CIB), Mr. Hamza Bawazir (The National Commercial Bank) and Mr. Salah Sharif (GFH Financial Group).
The Board of Directors reiterated the value of IIFM’s advocacy efforts in raising awareness in the Islamic finance industry on global benchmark rate reforms and transition from Inter-Bank Offered Rates (IBOR’s) to Risk Free Rates (RFR’s). A virtual industry consultative meeting on ‘Implications of IBOR Transition for Islamic Finance’ was organized by IIFM in November last year where major institutions and stakeholders discussed IBOR transition related issues and provided feedback on recommendations to be undertaken by IIFM to overcome these challenges.
IIFM will publish a ‘White Paper on Transition from IBOR’s to RFR’s and its impact on Islamic finance’ for the benefit of the industry and also commence work on priority basis to develop unified guidelines on Shari’ah solutions to tackle transition related issues as well as standard benchmark fallback language etc., relating to hedging, Sukuk and financing arrangements and documentation. Currently, IIFM is in the process of forming separate work streams for each of these segments consisting of leading institutions.
Mr. Khalid Hamad Al-Hamad, Chairman of IIFM said, “In conventional financial services industry, there are standard-setting bodies for each segment whereas in Islamic finance IIFM is the only organization providing standard solutions covering numerous segments which is evident from IIFM’s collaboration and cooperation with most the relevant international standard-setting organizations. However, the level of support to IIFM particularly from Islamic financial institutions is still not at the desired levels which IIFM merits”.
Despite the unparalleled situation which existed during 2020 due to the COVID-19 pandemic, IIFM quickly adjusted its workflow and held several industry awareness webinars and virtual consultative meetings such as the virtual launch events for IIFM Sukuk Al Ijarah Standard Documentation Templates, IIFM Sukuk Report, BAFT-IIFM Virtual Workshop on Master Participation Agreements for Unfunded and Funded Trade Finance business, IIFM-IFSB High Level International Seminar (Webinar) supported by Bank Indonesia in conjunction with Indonesia Sharia Economic Festival and the IIFM Industry Consultative Meeting on IBOR Transition and Implications for Islamic Finance.
IIFM also published the legal opinion on UAE Federal Law for the enforceability of ISDA/IIFM Tahawwut Master Agreement jointly with its Islamic hedging partner the International Swaps & Derivatives Association (ISDA) for the benefit of their respective members. Both organizations will continue to jointly assess requirements for issuance of legal opinions for new jurisdictions with netting and close-out legislation as well as monitor market developments in relation to review of existing jurisdictional legal opinions such as Malaysia.
Mr. Ijlal Ahmed Alvi, Chief Executive of IIFM said, “Disseminating knowledge of published standards and their application is seen as a key requirement by the Board of IIFM to ensure capacity building across the industry in understanding the practical aspects of the standards by the end users in particular financial institutions. IIFM will commence practically oriented workshops in collaboration with Dar Al Sharia during H1 2021 on virtual basis initially and when the situation allows, in-person workshops on all its published standards will also be scheduled”.
In terms of value addition through issuance of additional standards, IIFM is looking to develop a standard Allocated Gold Agreement in collaboration with London Bullion Market Association (LBMA) and the World Gold Council. IIFM will also be looking to develop standard documentation for Combination Sukuk as well as additional liquidity management standards in consultation with industry stakeholders.
About International Islamic Financial Market (IIFM)
IIFM is a global standard-setting body of the Islamic Financial Services Industry (IFSI) focusing on standardization of Shari’ah-compliant financial contracts and product templates.
IIFM is hosted by the Central Bank of Bahrain (CBB) and was established under Royal Decree No (23) Year 2002 of the Kingdom of Bahrain as a neutral and non-profit international Islamic infrastructure development institution, by the collective efforts of the CBB (formerly Bahrain Monetary Agency), Islamic Development Bank, Bank Indonesia, Bank Negara Malaysia (delegated to Labuan Financial Services Authority), Central Bank of Sudan and Autoriti Monetari Brunei Darussalam (formerly Ministry of Finance Brunei Darussalam).
Besides the Founding and Permanent Members, IIFM Board of Directors consist of Islamic and international banks namely Kuwait Finance House, Dubai Islamic Bank, National Commercial Bank, Bank ABC Islamic, Gulf Finance House, Standard Chartered, Credit Agricole CIB and National Bank of Kuwait.
IIFM is also supported by certain regulatory and government bodies such as State Bank of Pakistan, National Bank of Kazakhstan and DIFC Authority as well as by a number of international and regional financial institutions and other market players active in Islamic finance.
Information on IIFM and its activities is available on www.iifm.net
Mr. Usman M. Naseer, Senior Officer, Business Development, IIFM
Office No: +973 17 500161; Email: [email protected]
© Press Release 2021