DIFC Lends Support to Islamic Finance Industry's Unification initiativePress Release 04 Nov 2008 06:13 pm
The Dubai International Financial Centre (DIFC), in association with the International Islamic Finance Market (IIFM), organised a project briefing session today to reaffirm support for the Master Agreements for Treasury Placement (MATP), a major initiative that facilitates the unification and growth of the Islamic financial services industry.
Key representatives of the Islamic Finance industry hailed the MATP as a landmark initiative for standardising the Commodity Murabaha, a tool customarily used by Islamic institutions for Shari'ah compliant liquidity management. Officials who spoke at the briefing session included Mr. Nasser Al Shaali, Chief Executive Officer, DIFC Authority; Mr. Ijlal Ahmed Alvi, Chief Executive Officer; IIFM and senior representatives of Clifford Chance, Dubai Financial Services Authority, Standard Chartered Saadiq, JP Morgan and Calyon Bahrain.
The MATP is a benchmark document and a global first for the Islamic finance industry. The adoption of the MATP will enhance cost, time and operational efficiencies of Shari'ah compliant deposit arrangements. The initiative caters to the Shari'ah compliant commodities market, which represents, in some cases, 90% of commodity Murabaha transactions. The agreements cover principal to principal as well as agency arrangements. The global Commodity Murabaha market is currently worth over $100 billion.
Nasser Al Shaali, CEO of the DIFC Authority said: "The MATP represents a significant milestone in the development of the global Islamic Finance industry. As part of DIFC's mission to catalyse the growth of the regional capital market, we will be seeking to raise awareness and understanding of the MATP not just within the financial district but across the region. The agreement will facilitate more harmonious practices, lower costs and greater clarity for institutions involved in commodity Murabaha transactions. It will give a significant boost to the growth of the Islamic financial services industry and the development of Islamic capital markets across the world."
The agreement is the culmination of consultation with over 40 regional and international market participants. The project was driven by IIFM's Shari'ah Panel consisting of several leading scholars while the Dubai International Financial Centre (DIFC) and the Central Bank of Bahrain played key roles in facilitating the complex agreement. DIFC hosted the final review of the MATP by the scholars of the IIFM Shari'ah Panel on 14 August, 2008
The agreement was finalised when a pronouncement approving the MATP, was signed by the IIFM Shari'ah Panel at a meeting in Jeddah on 7 September, 2008.