The International Islamic Financial Market (IIFM) today released its Reference Paper on I'aadat Al Shira'a (Repo Alternative) concepts and structuring possibilities. Ijlal Alvi, CEO of IIFM, commenting on the importance of the paper said, "The lack of liquidity management tools, particularly a repo-like product, is a challenge that has been faced by the Islamic finance industry for some time. IIFM initiated the process with the assistance of the working team consisting of leading practitioners from the industry to find a solution or identify the key factors which may eventually lead to the development of a product which Islamic financial institutions can use for their short-term liquidity management requirements".
Ismail Dadabhoy, Executive Director-Head of Islamic Finance at UBS Investment Bank, Dubai and Chairman of the IIFM 'IS' working team said, "Finding a solution for Repo Alternative product that satisfies Shariah while also being acceptable to the general market has been a real challenge. As an ex repo trader, I know how important this product is to the short term & fixed income traders. I am convinced wider use by the market of I'aadat Al Shira'a will add liquidity in the system in terms of cash funding and liquidity float of Sukuk. It will 'oil' the wheels for efficiency and be a boost for Sukuk".
Habib Motani, Partner, Clifford Chance LLP, London and member of the IIFM 'IS' working team said, "Various different approaches have been seen in the market up to now. This paper will, Insh'Allah, serve to assist the market in developing a consensus approach".
The IIFM Reference Paper on I'aadat Al Shira'a provides a basis in terms of finding a widely acceptable and market based solution which will play a major role in liquidity management as well as the creation of a more active Sukuk secondary market.
The paper is available on www.iifm.net
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About IIFM
IIFM is the global standardization body for the Islamic Capital & Money Market (ICMM) segment of the IFSI. Its primary focus lies in the standardization of ICMM products, documentation and related processes. IIFM was founded with the collective efforts of Central Bank of Bahrain, Bank Indonesia, Central Bank of Sudan, Labuan Financial Services Authority (Malaysia), Ministry of Finance (Brunei Darussalam) and Islamic Development Bank (a multilateral institution based in Saudi Arabia). Besides the founding members, IIFM is supported by its permanent members namely State Bank of Pakistan and Dubai International Financial Centre Authority (UAE). IIFM is further supported by a number of regional and international financial institutions as well as other market participants as its members. Information about IIFM is available at www.iifm.net
For More Information, Please Contact:
Usman M. Naseer
IIFM,
Manama,
Kingdom of Bahrain,
Tel: +971 17500161,
Email: usman.naseer@iifm.net
© Press Release 2010
