The International Islamic Financial Market (IIFM), an international market development institution focused on the development of the global Islamic capital and money markets.
The event, which is being held with the support of the Central Bank of Bahrain (CBB), will be held on 26 April 2007 at the CBB premises. It will be attended by top executives of more than 25 Islamic financial institutions (IFIs), who are active members of the Islamic financial services industry.
The upcoming, high-level deliberations are intended to gauge industry opinion on the need for a risk management and regulatory reporting system for (IFIs) and sukuk-related secondary market product, such as an Islamic repurchase agreement (Repo).
“As an organization focused on the promotion and development of the global Islamic capital and money markets, the IIFM is taking a number of initiatives, in the area of primary and secondary market, which will facilitate the sound development of such markets, across borders,” said Mr. Ijlal Alvi, Chief Executive Officer of the IIFM.
The upcoming workshop is the first in a series of three high-level deliberations planned to be held in Bahrain and London. At the final workshop, to be held in Bahrain again, on 18 June 2007, a total of five primary and secondary market, as well as infrastructure development projects are expected to be finalized for implementation.
The upcoming workshop is aimed at assessing the need for a Shari’a-compliant version of a trade matching, operational risk matching and regulatory reporting tool, TRAX2. The system was first developed in 1989 by Europe-based International Capital Market Association (ICMA) through input and support of conventional industry players, mainly based in Europe.
Senior ICMA representatives will give a detailed presentation to workshop participants on TRAX2, which provides real time trade matching and reporting of bonds, derivatives and equities; real time exchange of standing settlement instructions between counterparties; and rapid identification of problem trades and failed trades.
ICMA representatives will also provide detailed information for reference and discussion purposes about the conventional Repo standardized agreement.
IIFM officials will lead discussions with the assistance of key industry experts on the possible development of an Islamic Master Repo Agreement.
“Both projects would be undertaken jointly by the IIFM and ICMA, if a need is established,” said Mr. Alvi.
Such market development initiatives are critical for activating sound, effective and truly global Islamic capital and money markets, both primary and secondary markets, he said.
The IIFM is currently advancing a number of other projects, aimed at developing the overall infrastructure for Islamic capital and money markets, as well as specific components of such markets.
These include the development of a framework agreement for Islamic hedging, which will be the basis of further research and eventual development of a hedging product, in alliance with the New York-based International Swaps and Derivatives Association, a Treasury Murabaha Master Agreement and several other projects relating to Islamic capital and money market.
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