The meeting was part of the IIFM efforts to further strengthen Islamic liquidity management, develop alternate tools, and increase liquidity in Sukuk and other Islamic financial instruments.
Since the publication of IIFM white paper on “Alternative to Repo and Collateralization”, the IIFM recommendation on introducing collateralized instrument for Islamic liquidity management is now gaining momentum with several IIFM member institutions offering collateralized product in the Islamic inter-bank market such as Abu Dhabi Islamic Bank. Also on the jurisdiction level Bank Negara Malaysia has announced introduction of collateralized murabaha product for monetary management.
The purpose of the meeting was to have deliberation and obtain input from industry experts on the issues concerning collateralized products and its related documentation. The global financial crisis has highlighted the importance of credit enhancement in the financial system and Islamic Industry is in urgent need to have credit enhanced standard products and documentation which is one of the key areas of IIFM.
The participants deliberated on technical aspects of collateral management, product structuring and documentation, legal & regulatory requirements, Shari’ah implications and other related issues. IIFM will continue to brief the Islamic Industry on the subject and address the related issues in the coming months.
Afaq Khan, CEO Standard Chartered Saadiq, appreciated IIFM’s endeavours to explore solutions to the pressing needs of the industry and to achieve standardization by bringing in all stakeholders together.
He mentioned that as a leading player in the global Islamic industry Standard Chartered Saadiq is fully committed to support and contribute to such industry building initiatives.
The meeting was attended by shari’ah scholars, regulator, industry experts from banks, law firms, accounting firms, International custodian & collateral management service providers and other market participants from various jurisdictions.
Ijlal Ahmed Alvi, CEO IIFM, thanked Standard Chartered Saadiq for its support.
He also thanked the participating institutions namely ABC Islamic Bank, Al Hilal Bank, Bank Indonesia, Credit Agricole, Clifford Chance, Clearstream, Deloitte, DDCap, Euroclear, Islamic Development Bank, Ithmaar Bank, Kuwait Finance House-Bahrain and National Bank of Abu Dhabi for their valuable contribution during the meeting.
Alvi also expressed his deepest thanks, appreciation and gratitude to the IIFM Board of Directors and IIFM Shari’ah Scholars for their continued support and guidance in the development of International standards for Islamic Capital and Money Market segment.