International Islamic Financial Market: Admission of new members and MoU with Bahrain Stock Exchange

The meeting was chaired by Mr. Waleed Abdulla Khalifa Rashdan, Vice-Chairman, from the Bahrain Monetary Agency and attended by Madam Rosnah Omar, Director-General - Labuan Offshore Financial Services Authority (LOFSA) Malaysia, Haji Mohd. Rosli Bin Haji Sabtu, Director of Special Duties - Brunei International Financial Center, Brunei Darussalam, Mr. Osman Elsayed Ahmed, Bank of Sudan and Mr. Pervez Said, Director Islamic Banking Department - State Bank of Pakistan.

Other Board members present at the meeting were Dr. Said Al-Martan, Chief Executive Officer - Shamil Bank of Bahrain, YM Raja Dato' Zainal Alam Shah, General Manager Corporate & Institutional Banking - Bank Islam Malaysia Berhad, Malaysia and Mr. Wagie Alla Abdulla Mohamed Elnau, General Manager - El-Nilein Industrial Development Bank Group, Sudan.

The purpose of the meeting was to review the progress and operation of IIFM and to map the future plans for the coming years.

"IIFM is pleased to announce the admission of several new members after it embarked in its membership drive two months ago" said Mr. Waleed A. Rashdan - Vice Chairman, International Islamic Financial Market.

"Bank Muamalat Indonesia, Indonesia was admitted as a Board member. Citi Islamic Investment Bank, Bahrain and Jordan Islamic Bank, Jordan have also been admitted as members while Malaysian Rating Corporation Berhad, Bank Rakyat Malaysia Berhad and Securities and Commodities Authority, United Arab Emirates were admitted as observer members." Mr. Waleed added.

"This brings the total number of IIFM membership to eighteen. This includes six founding members, one full member, eight members and three observers. "

"Several other financial institutions have expressed their intentions to join IIFM and expected to be formalised soon. This included four members and three observers."

Besides its efforts to attract all potential members especially financial institutions involved in Islamic finance, in general, and Islamic capital market, in particular, IIFM has also approached members of the International Organisation of Securities Commission (IOSCO) particularly from member counties of the Organisation of Islamic Conference (OIC) to join IIFM's Membership.

"Expertise and know-how of IOSCO members constitute an important asset to IIFM to achieve its objectives of developing the international Islamic secondary market especially when IOSCO members are involved in promoting high standards of regulation, effective surveillance and rigorous application of standards in order to maintain just, efficient and sound markets" the CEO of IIFM, Mr. Abdul Rais Abdul Majid added.

The Board also ratified the Memorandum of Understanding (MoU) signed on June 29, 2001 between IIFM and Bahrain Stock Exchange (BSE).

"The IIFM and BSE will establish closer relationship and technical cooperation in order to enhance the competitiveness as well as efficiency in various projects undertaken for the mutual benefit of both parties. The Memorandum of Understanding calls for the exchange of expertise, information and technical knowledge, in order to promote the listing and the development of an active secondary market for Islamic financial instruments globally. It also calls for cooperation to improve market liquidity, explore possibilities for strategic alliances, education and training."

Similar MoU was signed with Labuan Financial Exchange (LFX) on 19th January 2004. These MoUs are in line with one of IIFM's main objective of enhancing cooperation among member countries and the various Islamic financial markets.

As part of its objective of promoting the development of the Islamic secondary market IIFM in close collaboration with two of its key members, the State Bank of Pakistan and the Bahrain Monetary Agency organised two briefings sessions on the objectives and progress of IIFM to banks, takaful companies, other financial institutions and fund manager in both counties.

"The briefing session in Pakistan was held on 17 June 2004 at the premises of The State Bank of Pakistan and attended by about fifty industry players while the session in the Kingdom of Bahrain was held on 23 June 2004 at the Bahrain Monetary Agency and attended by about thirty industry players representing different financial institution. " said Mr. Abdul Rais Abdul Majid.

In addition, IIFM officials have also discussed harmonization and standardization issues with key market participants including financial institutions and fund managers in Dubai and Brunei.