Agreement aimed to provide framework and mechanism on hedging transactions being under taken by the Islamic finance industry
Abu Dhabi Islamic Bank (ADIB), one of the region's leading Islamic banks, hosted the second Consultative Meeting of the International Islamic Financial Market (IIFM) on ISDA/IIFM TaHawwut (Hedging) Master Agreement on 12th October 2009 in Abu Dhabi. Key scholars and representatives from the UAE Central Bank,regional Islamic banks, international banks, law firms, accounting firm and other market participants across the region also attended the meeting.
This final Consultative Meeting focused on the key features and mechanics of the TaHawwut documentation which IIFM and ISDA is currently finalizing in consultation with market participants and under the guidance of IIFM Shariah Panel. . Other objectives of the meeting included achieving market consensus and harmonization, and encouraging practitioners and scholars to air their views on key issues affecting the Islamic finance industry specifically the role of Hedging or risk management in Islamic Finance.
Commenting on the Consultative Meeting, Tirad Mahmoud, CEO of ADIB said: "We are pleased to have hosted this meeting in Abu Dhabi. ADIB was a founding member of IIFM and we were on its board at its formation stage in 2002. Since then we have contributed a great deal in terms of realigning its focus and initiatives. It is now considered the foremost body responsible for developing and setting global standards in Islamic finance documentation, products and processes."
Ijlal Alvi. IIFM CEO thanked ADIB on behalf of IIFM Board of Directors for its support and hosting this important meeting.
IIFM's primary focus is to standardize broader market products, documentation and processes, and provide elements vital to the sustainable growth of Islamic finance. Most importantly, it works to create a robust and transparent financial system.
IIFM's members include 47 Islamic finance institutions from across the world and its permanent board includes the Central Banks of Bahrain and Malaysia, Bank of Indonesia, Bank of Sudan, Ministry of Finance Brunei, Islamic Development Bank, State Bank of Pakistan and the DIFC. Other financial institutions represented on its board include Bank Islam Malaysia Berhad, Bank Muamalat Indonesia, EIIB, Standard Chartered Bank Saadiq, NBK, KFH, Calyon and ABC Islamic.
IIFM is a link between regulatory bodies and financial institutions and is driven by financial institutions through project specific working groups. It ascertains industry needs through dialogue and surveys, reviews the findings and appoints a project specific working group that develops market standards under the guidance of IIFM Shari'a Panel. It has recently finalised the Master Murabaha and Master Agency Agreements, commonly known as the IIFM MATP, that are now used by a number of institutions globally and is the first universally standardized documentation in Islamic finance. The Tahawwut Master Agreement is in its final stages; moreover, IIFM may soon publish a reference paper on liquidity management tools covering repurchase and collateralization. For more information, please visit www.iifm.net.
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ABOUT ADIB
Abu Dhabi Islamic Bank (ADIB) was established on 20th May 1997 as a Public Joint Stock Company following the Amiri Decree No. 9 of 1997. The Bank commenced commercial operations on 11th November 1998, and was formally inaugurated by His Highness Sheikh Abdullah Bin Zayed Al Nahyan, on 18th April 1999. The Bank carries out all contracts, operations and transactions in accordance with Islamic Shari'a principles. ADIB commenced its operations with a paid-up capital of AED 1 Billion, where the founding shareholders include Members of the Ruling Family, The Abu Dhabi Investment Authority and Prominent UAE.
ADIB prides itself on its values which reflect the Bank's commitment to the Islamic Shari'a, and are thus the guidelines of the Bank's practices to adhere to the principles of Islam. ADIB's value structure consists of Transparency, Quality, Innovation, Professionalism, Social Responsibility and Empowering Its Staff. www.adib.ae
ABOUT ISDA
ISDA, which represents participants in the privately negotiated derivatives industry, is among the world's largest global financial trade associations as measured by number of member firms. ISDA was chartered in 1985, and today has over 830 member institutions from 58 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.
© Press Release 2009
