The International Islamic Financial Market (IIFM) has launched standardised documentation for Ijarah and Murabahah syndicated financing, a move aimed at unifying legal architectures and reducing costs for large-scale Sharia-compliant transactions.

The standard master agreements seek to resolve decades of documentation fragmentation and structural variations among Islamic financial institutions globally.

The new suite comprises 15 standard agreements, including nine core agreements for the Ijarah framework and three for Murabahah. The package also features a standard inter-creditor agreement, two standard mandate letters, an explanatory memorandum, and full Arabic translations to facilitate cross-border and domestic transactions.

“This achievement directly benefits the industry worldwide, particularly IIFM member institutions, by providing unparalleled levels of Sharia and legal certainty,” IIFM’s acting chief executive officer and head of compliance and standards development Dr Ahmed Rufai said in a statement.

“It drastically reduces transaction and operational costs, accelerates execution timelines for joint financing operations, and enhances the competitive reliability of the Islamic finance sector globally,” Dr Rufai added.

The Bahrain-based standard-setting body said the framework will boost liquidity management and capital flows by allowing international market participants to engage in large-scale transactions with greater confidence.

The initiative was executed with financial grant support from the Saudi Arabia-based Islamic Development Bank Institute (IsDBI), led by acting director general Dr Sami Al Suwailem.

International law firm White & Case acted as external legal counsel to draft the documentation, working alongside IIFM’s technical team and the IIFM Sharia Board to align the legal architecture with Islamic jurisprudential requirements.

The IIFM, which is backed by the Central Bank of Bahrain and several regional central banks, develops standardised capital and money market documentation, product confirmations, and structural guidelines for the global Islamic finance industry.

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