DIFC Knowledge Series Event Discusses the Islamic Finance Growth OpportunityPress Release 01 Jun 2010 12:00 pm
The DubaiInternational Financial Centre (DIFC) today hosted a seminar to discuss the opportunities and challenges confronting Islamic Finance in the current economic environment and measures that need to be taken to mainstream the industry.
The ninth event in DIFC’s Knowledge Series, the seminar titled ‘The Islamic Finance Growth Opportunity’ discussed the critical regulatory, governance and standardisation gaps that need to be filled to help the sector realise its vast potential.
Delivering the Welcome Note at the event, Abdulla Mohammed Al Awar, CEO of the DIFC Authority urged Islamic Finance institutions, regulators and standardisation bodies to work together to strongly entrench the industry as an integral part of the global economy. “The industry has to forge greater harmonisation, be responsive to market needs and put a premium on innovation in order to provide competitive alternatives to conventional finance. The ability to be competitive will be Islamic Finance’s true test of success,” he said.
Although there are potential aspirations for Islamic Finance, there are also some areas that would require more efforts in order to further grow the industry globally. These areas include encouraging regulatory harmonisation and standardisation across borders; improving insolvency and creditor rights systems; providing training to increase the numbers of qualified and skilled scholars and professionals well versed in Shariah-compliant finance; inspire and nurture large scale innovation of new services and products; increasing levels of liquidity; and facilitating access to reliable information and statistical data.
However, the medium to long-term growth potential for Islamic Finance remains very strong, Al Awar said. Surveys suggest that the 1.4 million Muslims worldwide would opt for Islamic finance if given a competitive alternative to conventional services. There are tremendous growth opportunities in under-penetrated markets with large Muslim populations in the Middle East, the subcontinent and South East Asia, he added.
Speaking about DIFC’s efforts to support the development of Islamic Finance, he said: “From its inception, DIFC has been working to catalyse the industry’s growth by addressing some of these challenges, particularly, crucial regulatory and market infrastructure gaps. DIFC has built a sound legal and institutional infrastructure necessary for Islamic Finance to grow in a secure, productive environment. DIFC works closely with the Dubai Financial Services Authority (DFSA) to ensure that the legal and regulatory framework is constantly updated to support the growth of this sector.”
Other speakers featured in the Knowledge Series event included Peter Casey, Director, Policy, DFSA; Qudeer Lateef, Partner and Head of Islamic Finance, Clifford Chance; Neil Miller, Global Head of Islamic Finance, Norton Rose; Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters; Jahanara Sajjad, Program Manager, Hawkamah; and Qasim Aslam, Senior Associate, Finance, Herbert Smith.
Key topics discussed at the event included Developments in the Sukuk Market; Master Agreement of Islamic Hedging – Tahawwut; Sukuk Restructuring;Stress-Testing and Economic Indicators in Islamic Finance; Corporate Governance; and Interfacing between Governing Law and Islamic Finance.