Bahrain based international standard-setting body, the International Islamic Financial Market (IIFM) and the Islamic Research & Training Institute (IRTI-IDB) of Islamic Development Bank Group organized an industry consultative seminar on “Sukuk Restructuring” hosted by Al Baraka Banking Group. The seminar was attended by a diverse group of experts which included a number of regulators, Shari ‘ah scholars, senior representatives from Islamic financial institutions, law firms, accounting firms, researchers and standard setting & infrastructure bodies such as AAOIFI, CIBAFI & the International Monetary Fund.
The consultative seminar was co-chaired by Mr. Khalid Hamad Abdul-Rahman Hamad, Chairman of IIFM & Executive Director-Banking Supervision at the Central Bank of Bahrain. Mr. Khalid had thanked, in his welcoming speech all speakers, participants and the leading industry experts from different jurisdictions including GCC and Far East for their participation and providing valuable input during the deliberations.
Mr. Adnan Yousif, President & Chief Executive of Al Baraka Banking Group, in his keynote address, highlighted the importance of this critical aspect of Islamic Capital Market and commended the role of IIFM towards bringing together a diverse group of experts in one common platform. Mr. Yousif stated that there is a pressing need for the IIFM and the other Islamic Finance infrastructure organizations to consider establishing a dedicated C-suite committee or taskforce to look after the implementation of all Standards and Guiding Principles issued so far, in a way that is strong and close to the Basel resolution in terms of enforceability. He emphasized that the key to Standard setting is its enforceability.
Mr. Adnan Yousif further added, “As we head towards the second decade of growth, I strongly recommend empowering Research and Development abilities at the Industry as well as the Institutions’ level, to tackle issues such as high market risk, moral hazard, and adverse selection. I believe these are the main obstacles that prevent the PLS principle from taking shape”.
Dr. Omar Azmi, Director General, IRTI-IDB said that the discussion in this seminar should be able to address several pertinent issues in Sukuk issuance and hence it will provide the future directions for standard setters to work on the Sukuk standardization. In this perspective, IRTI is willing to cooperate in term of providing the research findings which will help the Islamic industry
Mr. Ijlal Alvi, CEO IIFM, said that the objective of the consultative seminar was to explore possible ways of reducing risk of Sukuk default and making the findings of the seminar as a basis in the IIFM effort to develop a comprehensive standardized documentation on Sukuk issuances across the globe through which we hope to reduce the risk of default in the Sukuk market.
The role of IIFM in organizing this consultation was appreciated by the attendees. The presentations, research papers and discussions/deliberations will assist, not only in bringing improvement in Islamic Capital Market, but will also assist the global unification efforts of IIFM and other infrastructure institutions.