International Islamic Financial Market holds successful conference

Uniformity and standardization are also critical issues on which the future of the Islamic financial services industry (IFSI) depends, said Mr. Khalid Hamad, Executive Director, Banking Supervision, at the Central Bank of Bahrain (CBB), who is also Vice Chairman of the Bahrain-based IIFM.

He was speaking at the event, which included technical workshops being held in Karachi, Pakistan on 24 & 25 January 2007 under the patronage of State Bank of Pakistan (SBP), the central bank of Pakistan.

It was inaugurated by H.E. Dr Shamshad Akhtar, Governor of the SBP. H.E Siti Fadjrijah, Deputy Governor of Bank Indonesia, also attended, besides over 150 leading officials from central banks of several countries, industry experts and practitioners as well as academics.

The specialized event, which focused on sukuk (Islamic bonds), real estate investment trusts (REITs) and market uniformity and standardization, was held under the theme, 'Setting the foundation of a robust and sustainable Islamic financial market'.

"IFSI in general and Islamic Capital Market in particular is the area of focus and almost on a daily basis we hear new innovation is taking place. The industry is experiencing double digit growth which is expected to continue for a foreseeable future. However, a lot of ground still needs to be covered before we can proudly present the IFSI as a transparent and robust financial system," Mr. Hamad told delegates on the opening day.

'A well developed Capital & Money Market is the backbone of a financial system and IFSI requires concerted efforts by regulatory bodies, market participants, legal, Shari'a and the development institutions. There is a need for Islamic Capital and Money Market to have the necessary regulatory, supervisory as well as self regulatory framework, which is on a par with international best practices,' he said.

"In my view, all of us are partners in the development of IFSI and it is our duty to work and ensure that Islamic business activities take place in an efficient, prudent and sound manner. At the same time, there has to be an adequate financial infrastructure to enable the market participants to conduct their business efficiently," said Mr. Hamad.

He lauded the efforts and role of the IIFM, which has launched several industry building initiatives.

Mr. Ijlal Alvi, Chief Executive Officer of IIFM, said the organization was working on a number of market development initiatives, including the development of an Islamic Derivative Master Agreement in alliance with the International Swaps and Derivatives Association (ISDA) and Master Agreement for Treasury Murabaha Financing.

The IIFM is focused on the advancement and standardization of Islamic financial instruments and contracts, infrastructure development and similar projects like specialized forums.

The IIFM is also developing a trading platform for Islamic capital markets. A feasibility study on the capital market management system is in final stages.

Mr. Alvi underlined the need for specialized, technical events, such as the one organized by the IIFM, in sharing experience and knowledge in the advancement of the IFSI.

"Such events serve to supplement IIFM's core work of promoting transparency through market agreements and in our effort to develop an Islamic capital market trading platform," said Mr. Alvi.