Manama: The Board of Directors of the International Islamic Financial Market (IIFM) held its forty-second meeting “virtually” and was chaired by the Khalid Hamad Al-Hamad, Chairman of IIFM to discuss issues related to emerging developments in the Islamic finance industry and the role that IIFM may further play in adding more sustainable development and advancement of the industry.
The IIFM Board consists of senior officials representing the Central Bank of Bahrain, Labuan Financial Services Authority, Bank Indonesia, Islamic Development Bank, Central Bank of Sudan, Autoriti Monetari Brunei Darussalam, Kuwait Finance House (Bahrain), Dubai Islamic Bank, Standard Chartered Saadiq, Bank ABC Islamic, Credit Agricole CIB, The National Commercial Bank, GFH Financial Group and National Bank of Kuwait (Bahrain).
The Board of Directors discussed the unified and harmonized approach of IIFM in standardizing Shari’ah-compliant financial documentation and product confirmations to support the systemic and robust expansion of the Islamic finance industry. The Directors also discussed the impact of the COVID 19 pandemic and valued IIFM’s continued collaboration with other global industry bodies to remain at the forefront of market developments.
Earlier this year, IIFM joined the International Swaps and Derivatives Association (ISDA), International Capital Market Association (ICMA), International Securities Lending Association (ISLA), London Bullion Market Association (LBMA), UK Finance, Association of German Banks and the Australian Financial Markets Association (AFMA) to jointly assert their commitment to defining and promoting a digital future for financial markets. The collaboration proposes a series of principles and objectives across three core areas of standardization, digitization and distribution to global regulatory authorities.
“IIFM is not only setting the standard for the industry but also raising awareness on important developments and finding common solutions for inclusive progress of the Islamic finance industry. The significant strain placed on existing infrastructure due to market volatility witnessed at the beginning of the pandemic is now challenging established consensus on functioning of operations. The development of innovative new technology as well as increasing demand for digital services has pushed many firms seeking to speed up plans for more automation and digitization,” Khalid Hamad Al Hamad, IIFM Chairman said.
The Directors also decided to proceed with the publication of IIFM Sukuk Al Ijarah Standard Documentation which was postponed earlier this year due to COVID 19. The suite of documentation will cater to the capital market and will be launched by end of this month, September 2020 through a webinar. In the future, IIFM also intends to develop Sukuk Al Ijarah standard documentation for the securitization market.
The IIFM Sukuk Al Mudarabah Standard Documentation for Perpetual Tier 1 is also advancing with IIFM Shari’ah Board guidance and is expected to be finalized before the end of this year 2020.
Also, during the meeting, it was agreed that in order to create a better understanding on the practical aspects of IIFM’s published Standards as well as to support the professional development of financial institutions human resource; IIFM will jointly develop training material with a leading training provider to offer technical workshops to the market by Q1 2021.
In addition, IIFM will be having couple of workshops in Q3 2020, starting with the ‘IIFM-BAFT Virtual Workshop on Master Participation Agreements’ and the ‘IIFM Webinar’ at Indonesia Shari’ah Economic Festival (ISEF 2020). Two other important elements that IIFM will be highlighting to the Islamic Finance industry by way of virtual industry consultation meetings and awareness events on ‘Global Benchmark Rate Reform & Its Impact on Islamic Finance Transactions’, and Consultation on ‘Islamic Syndication Documentation Standardization’.
“Next year IIFM will be embarking on its 2021-2023 Strategic Plan which will take into account the shift required due to COVID 19 pandemic. Besides the core focus on its Standards, the value addition of IIFM will also involve joint initiatives involving digital future of financial markets; professional development, and creating awareness and finding common solutions to global financial developments which impact the Islamic finance industry,” Ijlal Ahmed Alvi, Chief Executive of IIFM, said.
IIFM and ISDA, from time to time, issue TMA legal opinions for jurisdictions having close-out netting legislation for the enforceability of financial contracts and currently the legal opinion for UAE Federal close-out netting law is under finalization and will be published for the benefit of members in the near future.
In July, IIFM released French language versions of six of its Standards to support the expansion of Islamic finance in new jurisdictions and territories.
The annual IIFM Sukuk Report (9th Edition) was published end of July through a webinar witnessed by worldwide participants.
The IIFM 2019 audited accounts prepared by the auditor, Deloitte & Touche – Middle East, were approved at the meeting.
